Description
The PPT explaining topics like outsourcing,what drives outsourcing,IT markets,strategic grid for information resource management,structuring and managing outsourcing.
Managing IT Outsourcing
Outsourcing in Retrospect
?
Major drivers for outsourcing in the 1990s
? Cost effective access to specialized skills or occasionally needed computing power or skills ? Avoidance of building in-house IT skills. ? Access to special functional capabilities.
Outsourcing in the Century
?
st 21
Acceptance of Strategic Alliances ? IT’s Changing Environment
IT Markets
Location Internal Physical Aspects
Automating : Computerizing physical and clerical processes. DP era (1960 - 1980)
Information
Informating : Leveraging knowledge workers with computers.
External
• Dominant use of mainframe and minicomputers. • Operational level systems automated primarily with COBOL. • Process controls automate primarily with machine language. • Standard packages for payroll and general ledger. • Applications portfolio consists of millions of lines of code with 50% typically purchased from outside. Embedding : Integrating computers into products and services.
Micro era (1980 - 1995) • Specialized code embedded in products and services to enhance function. • Microcomputers in physical products such as automobiles and “smart cards” in services. • Thousands of lines of code developed by both specialized internal programmers and outside contract programmers.
• User tasks leveraged through direct use of micro -computers enabled by graphical use interfaces (GU) and purchased software such as word processing, spreadsheet, graphics, and CAD/CAM. • Local area networks (LANs) -- user -oriented software for e - mail, database sharing, file transfer, and groupware for work teams. • Microcomputer software consists of millions of lines of code -- almost 100% purchased from other companies.
Networking : “The Information Highway”
Network era (1990 - ?) • Wide area networks (WANs) networking workers, suppliers, and customers. • Internet for commercial use. • Millions of lines of code, almost 100% purchased and maintained from outside software firms.
Source: Applegate, Lynda M., Robert D. Austin, and F. Warren
McFarlan , Corporate Information Strategy and Management . Burr Ridge, IL: McGraw -Hill/Irwin, 2002.
What Drives Outsourcing?
? ? ? ? ? ? ?
?
General Managers’ concerns about costs and quality. Breakdown in IT performance. Intense vendor pressures Simplified general management agenda Financial factors Corporate culture Eliminating an internal irritant Other factors
Strategic Grid for Information Resource Management
High Factory-uninterrupted service -oriented information resource management Strategic information resource management : Outsourcing Presumption Mixed
: Outsourcing Presumption Yes, unless company is huge and well managed
Reasons to consider outsourcing: • Possibilities of economies of scale for small and midsize firms. • Higher quality service and backup. • Management focus facilitated. • Fiber op tic and extended channel technologies facilitate international IT solutions. Current Dependence on Information Support-oriented information resource management Outsourcing Presumption: Yes Reasons to consider outsourcing: • Rescue an out -of-control internal IT unit. • Tap source of cash. • Facilitate cost flexibility. • Facilitate management of divestiture.
Turnaround information resource management : Outsourcing Presumption Mixed
Low
Reasons to consider outsourcing: Reasons to consider outsourcing: • Access to higher IT professionalism • Interna l IT unit not capable in required • Possibility of laying off is of low priority technologies. and problematic. • Internal IT unit not capable in required • Access to current IT technologies. project management skills. • Risk of inappropriate IT architecture reduced. Importance of Sustained, Innovative High Information Resource Development
Source: Applegate, Lynda M., Robert D. Austin, and F. Warren
McFarlan , Corporate Information Strategy and Management . Burr Ridge, IL: McGraw -Hill/Irwin, 2002.
When to Outsource
Position on the strategic grid ? Development portfolio ? Organizational learning ? A firm’s position in the market ? Current IT organization
?
Structuring the Alliance
Contract flexibility ? Standards and control ? Areas to outsource ? Cost savings ? Supplier stability and quality ? Management fit ? Conversions problems
?
Managing the Alliance
?
The CIO function
? ? ? ? Partnership/contract management Architecture planning Emerging technologies Continuous learning
Performance measurement ? Mix and coordination of tasks ? Customer-vendor interface
?
doc_879762891.ppt
The PPT explaining topics like outsourcing,what drives outsourcing,IT markets,strategic grid for information resource management,structuring and managing outsourcing.
Managing IT Outsourcing
Outsourcing in Retrospect
?
Major drivers for outsourcing in the 1990s
? Cost effective access to specialized skills or occasionally needed computing power or skills ? Avoidance of building in-house IT skills. ? Access to special functional capabilities.
Outsourcing in the Century
?
st 21
Acceptance of Strategic Alliances ? IT’s Changing Environment
IT Markets
Location Internal Physical Aspects
Automating : Computerizing physical and clerical processes. DP era (1960 - 1980)
Information
Informating : Leveraging knowledge workers with computers.
External
• Dominant use of mainframe and minicomputers. • Operational level systems automated primarily with COBOL. • Process controls automate primarily with machine language. • Standard packages for payroll and general ledger. • Applications portfolio consists of millions of lines of code with 50% typically purchased from outside. Embedding : Integrating computers into products and services.
Micro era (1980 - 1995) • Specialized code embedded in products and services to enhance function. • Microcomputers in physical products such as automobiles and “smart cards” in services. • Thousands of lines of code developed by both specialized internal programmers and outside contract programmers.
• User tasks leveraged through direct use of micro -computers enabled by graphical use interfaces (GU) and purchased software such as word processing, spreadsheet, graphics, and CAD/CAM. • Local area networks (LANs) -- user -oriented software for e - mail, database sharing, file transfer, and groupware for work teams. • Microcomputer software consists of millions of lines of code -- almost 100% purchased from other companies.
Networking : “The Information Highway”
Network era (1990 - ?) • Wide area networks (WANs) networking workers, suppliers, and customers. • Internet for commercial use. • Millions of lines of code, almost 100% purchased and maintained from outside software firms.
Source: Applegate, Lynda M., Robert D. Austin, and F. Warren
McFarlan , Corporate Information Strategy and Management . Burr Ridge, IL: McGraw -Hill/Irwin, 2002.
What Drives Outsourcing?
? ? ? ? ? ? ?
?
General Managers’ concerns about costs and quality. Breakdown in IT performance. Intense vendor pressures Simplified general management agenda Financial factors Corporate culture Eliminating an internal irritant Other factors
Strategic Grid for Information Resource Management
High Factory-uninterrupted service -oriented information resource management Strategic information resource management : Outsourcing Presumption Mixed
: Outsourcing Presumption Yes, unless company is huge and well managed
Reasons to consider outsourcing: • Possibilities of economies of scale for small and midsize firms. • Higher quality service and backup. • Management focus facilitated. • Fiber op tic and extended channel technologies facilitate international IT solutions. Current Dependence on Information Support-oriented information resource management Outsourcing Presumption: Yes Reasons to consider outsourcing: • Rescue an out -of-control internal IT unit. • Tap source of cash. • Facilitate cost flexibility. • Facilitate management of divestiture.
Turnaround information resource management : Outsourcing Presumption Mixed
Low
Reasons to consider outsourcing: Reasons to consider outsourcing: • Access to higher IT professionalism • Interna l IT unit not capable in required • Possibility of laying off is of low priority technologies. and problematic. • Internal IT unit not capable in required • Access to current IT technologies. project management skills. • Risk of inappropriate IT architecture reduced. Importance of Sustained, Innovative High Information Resource Development
Source: Applegate, Lynda M., Robert D. Austin, and F. Warren
McFarlan , Corporate Information Strategy and Management . Burr Ridge, IL: McGraw -Hill/Irwin, 2002.
When to Outsource
Position on the strategic grid ? Development portfolio ? Organizational learning ? A firm’s position in the market ? Current IT organization
?
Structuring the Alliance
Contract flexibility ? Standards and control ? Areas to outsource ? Cost savings ? Supplier stability and quality ? Management fit ? Conversions problems
?
Managing the Alliance
?
The CIO function
? ? ? ? Partnership/contract management Architecture planning Emerging technologies Continuous learning
Performance measurement ? Mix and coordination of tasks ? Customer-vendor interface
?
doc_879762891.ppt