Cis management class CH12 – Flashcards
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enhance the value of a product or service to consumers, creating value for the company. Advanced IT, reliability, and brand reputation are examples
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What are value drivers?
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1.) Operational (shorter-term factors that impact cash flow and the cash generation ability through increased efficiency or growth), 2.) Financial (medium-term factors that minimize the cost of capital incurred by the company to finance operations), and 3.) Sustainability (long-term survival factors; factors that enable a business to continue functioning consistently and optimally for a long time.)
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What are the three categories of value drivers?
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Two of the biggest risks and concerns of top management are (1) failing to align IT to real business needs and, as a result, (2) failing to deliver value to the business. Reactive IT investments tend to be patches that rarely align with the business strategy
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Why do reactive approaches to IT investments fail?
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Work or development outsourced to consulting companies or vendors that are within the same country is referred to as onshore sourcing
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What is onshore sourcing?
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A systematic process for determining what a business should become and how it can best achieve that goal
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IT Strategic Planning
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1.) Improve management's understanding of IT opportunities and limitations 2.) Assess current performance 3.) Identify capacity and human resource requirements 4.) Clarify the level of investment required
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Four IT Strategic Plan Objectives
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-Set the direction(link corp. strategy) -Allocate scarce resources(include outsourcing policy) -Make staffing decisions -Communicate and provide feedback(IT activities flow freely) -Set and evaluate performance metrics(performance measure)
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What are the functions of a steering committee?
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Formally established statements that direct the policies regarding IT alignment with organizational goals and allocation of resources
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Governance
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What IT should do to achieve the goals, objectives, and strategic position of the firm and how this will be achieved. The overall direction, requirements, and sourcing of resources. Time frames are set for three to five years into the future.
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Long-range IT plan (Strategic IT plan)
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Identifies general project plans in terms of the specific requirements and sourcing of resources as well as the project portfolio
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Medium-range IT plan
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Details budgets and schedules for current-year projects and activities
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Tactical Plan (Short-range)
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Lists major resource projects that are consistent with the long-range plan
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Project Portfolio
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A list of major, approved information system projects that are also consistent with the long-range plan
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Applications Portfolio
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1.) Commitment to IT planning by senior management. 2.) CIO is a member of senior management. 3.) Understanding IT and corporate planning. 4.) Shared culture and good communication. 5.) Multilevel links
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IT Business Alignment Improvement Activities
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1.) Achieve better results. 2.) Adapt quickly. 3.) Think together. 4.) Act together. 5.) More aligned on strategy
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Strength of CIO & C-Suite Relationship Influences Performance
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-Financial (Revenue, earnings, asset utilization) -Customer (Market share, Brand image, price-value relationship) -Business processes (Cycle times, cost per process/transaction) -Innovation, learning and growth (Employee skills, IT capabilities, R&D)
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Balanced Approach Metrics
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The BSC method is "balanced" because it does not rely solely on traditional financial measures. Instead, it balances financial measures with three forward-looking nonfinancial measures
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How does the BSC approach "balance" performance measurements?
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Short for cloud computing IT strategy
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Cloud Strategy
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Term that refers to a cloud service
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Edge Service
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Incremental deployment resulting in apps and services, patched to create end-to-end business processes
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Tactical Adoption Approach
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The ability to get data into and out of the cloud service
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Extensibility
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Cybersecurity, privacy, data availability, and service accessibility
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Migration Issues
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Cloud integration with on-premises resources, extensibility, and reliability.
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Newer Challenges
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-Generate revenue -Increase efficiency -Agile enough to respond to market changes -Focus on core competency -Cut operational costs -More accepted IT strategy -Cloud and SaaS have been proven -Move IT from capital to recurring operating expenditure
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Sourcing Driving Factors
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-Shrinking -Poaching -Opportunistic repricing
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Outsourcing Risks consist of
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The vendor deliberately underperforms while claiming full payment.
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Shirking
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The vendor develops a strategic application for a client and then uses it for other clients
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Poaching
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Client enters into a long-term contract with a vendor, the vendor changes financial terms at some point or overcharges for unanticipated enhancements and contract extensions
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Opportunistic repricing
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-Work that has not been routinized -Work that if offshored would result in the client company losing too much control over critical operations -Situations in which offshoring would place the client company at too great a risk to its data security, data privacy, or intellectual property and proprietary information -Business activities that rely on an uncommon combination of specific application-domain knowledge and IT knowledge in order to do the work properly
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Work Not Readily Offshored
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-Costs undermine goals. -Close relationships are mutually beneficial. -Both sides are best served viewing relationship over simple transaction.
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Focus On Value Not Costs
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Tactical adoption is a short-sighted approach, deploying cloud services incrementally, resulting in apps and services that are patched together to create end-to-end business processes
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How does tactical adoption of cloud services differ from a coordinated cloud strategy?
