TIM158 Business Informa3on Strategy

Transcription

1 TIM158 Business Informa3on Strategy Instructor: Safwan Shah Teaching Assistant: Paul Vroomen To maintain consistency. Lectures throughout TIM158 adapted or borrowed from Kevin Ross. Addi3onal material added as needed.

2 Lecture 13 Chapter 7 Managing IT Service Delivery

3 Managing IT Service Delivery 1. Understand how internetworking enables new IT service models and recognize typical features and advantages of these new models 2. Understand the opportuni3es and challenges of incremental outsourcing 3. Understand the value of large- scale outsourcing and how these complex alliances can best be managed

4 Old Business Model Each company develops own infrastructure for communica3on with customers and partners Duplica3on Lack of interoperability Required separate sotware simply to convert between incompa3ble systems Proprietary systems locked in rela3onships over a long term, removing bargaining power 4

5 Business Model with Internet Open standards of communica3on Leverage work done by others Shared infrastructure with partners Bridging sotware simple, cheap Less locking of partnerships Services can come from separate providers instead of IT departments Incremental services instead of large commitments Virtual integra3on of partners Service Level Agreements 5

6 New Service Models Client- server compu3ng Locally stored documents, sotware High capacity networks allow sotware, servers, storage to be distant from users Not every company needs every specializa3on of IT capability Develop new capabili3es quickly, reducing 3me to market ShiT to 24-7 opera3ons Smoother cash- flow (see fig) 6

7 Fig 7.1 Purchase vs subscribe cashflow 7

8 New Service Models ctd. Cost reduc3on Centraliza3on of updates Eliminated need for specialized support Less vulnerable points of security breach Economies of scale Global accessibility Physical loca3on Device 8

9 Web Services Model Online, automated nego3a3on for service Currency conversion example 9

10 RESTful API ( 6 constraints) Client server Stateless Cacheable Layered system Code on demand (op>onal) Uniform interface Representa3onal state transfer

11 Grid/On Demand/U3lity Compu3ng Reconfigura3on online of resources Web- enabled contracts Sharing of resources Requires Short term, simple contracts Restructuring of exis3ng applica3ons Advanced infrastructure Middleware to manage Provisioning Resource virtualiza3on Change Management Performance Monitoring See fig

12 Fig 7.2(a) On Demand Compu3ng Environment 12

13 Fig 7.2(b) On- Demand Compu3ng 13

14 Risk Management Which services should we outsource? Generic processes that others can do beeer Commodi3es Not core capability or compe33ve advantages Incremental service outsourcing is smaller scale and more reversible than produc3on outsourcing 14

15 Fig 7.3 Outsourcing Decisions 15

16 Incremental Outsourcing: Hos3ng House computers for net services Service levels Colloca3on hos3ng Shared hos3ng Dedicated hos3ng Different level of services available See table

17 Table 7.1 Levels of Service from Hos3ng Providers 17

18 Rela3onship Management Trust is extremely important OTen put out a RFP (Request for Proposal) Look for Descrip3ve Informa3on Financial Informa3on Proposed plan for mee3ng requirements Mi3ga3on of cri3cal risks Service guarantees Pricing 18

19 Exercise Look at tables 7.2, 7.3 and make a recommenda3on of selec3on for one service provider out of the three offered 19

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22 Service Level Agreements (SLAs) SLA informa3on Align incen3ves in rela3onships Careful defini3ons Penal3es large or small for failure to provide Trus3ng with data Clear who owns it See table

23 Table 7.4 Sample SLA 23

24 Large Scale Outsourcing E.g. 10 year contract to manage majority of IT OTen mo3vated by Cost savings Dissa3sfac3on with exis3ng IT capabili3es Desire to focus firm strategy elsewhere Major organiza3onal change Access to skill and talent Financial arrangements 24

25 Designing Large- scale outsourcing alliances Contract flexibility Standards and control Scope Cost savings Rate of technology renewal and improvement Management issues CIO Performance Management Rela3onship interface 25

26 Legacy Management Typical challenges Technology Residual Process complexity Local Adapta3on Nonstandard data defini3ons Adding interfaces called enterprise applica3on integra3on (EAI) Work- around solu3ons tend to grow in complexity See table

27 Table 7.5 Managing Legacies 27

28 Managing infrastructure Assets Difficulty to recognize who is using what machine etc. Need to know if assets are used efficiently, if they are being used across business lines, etc. Total Cost Ownership (TCO) IT services measured in terms of measured costs and benefits Per use or 3me dedicated Theore3cally efficient, but can be cumbersome and lead to wrong valua3on and incen3ves 28

29 MIT Study on Infrastructure 180 business ini3a3ves 118 businesses in 89 enterprises 4.2% of revenue spent on IT 50% of capital budget 55% of IT budget goes toward fusion of technology, processes and human assets 29

30 Findings Leading companies used incremental modular steps rather than a few large investments Service level agreements become more stable in beeer companies Variety of classes of service that make up infrastructure 30

31 Findings: Clusters of IT- infrastructure services Channel- management Security and Risk- management Communica3on Data- management Applica3on- infrastructure IT- facili3es- management IT- management IT- architecture- and- standards IT- educa3on IT R&D 31

32 Findings: Matching Capabili3es to Strategic Direc3on Found significant correla3on between strategic agility and IT- infrastructure capability Three major categories of ini3a3ves: Internally focused (51%) Demand side: Links to Customers (55%) Supply side: links to suppliers (76%) 56% of ini3a3ves covered at least two, and 26% covered all three 32

33 Classifying Ini3a3ves Posi3on on value net (suppliers/buyers/internal) Technology enables communica3on and drops transac3on costs Type of exchange (B2B or B2C) B2B involves small, focused customer set with large transac3on volume per customer B2C large no. of individual customers with less transac3ons per customer Both require significant data Type of innova3on: products or markets? 33

34 Cri3cal Capabili3es Supply- side Business- unit level decisions required different systems Internally- focused Broadly enforced standards, but business- unit specific IT Demand- side Rely heavily on enterprise- wide architecture (note conflict with above data best at enterprise level) Cri3cal to Exchange Type B2B at business- unit level B2C centrally managed Innova3on Type New products have local management New market require centralized 34

35 Inves3ng in IT for strategic agility Requires 3me, money and focus Under- inves3ng reduces agility, slows 3me to market Over- inves3ng wastes resources Like buying an op3on Cri3cal for senior execu3ves to understand which IT- infrastructure is required for what ini3a3ves 35