LECTURE 4

1. LECTURE 4 Managing Hardware, Software Assets, Data Resources, and Telecommunication & Networks Managing Hardware and Software Assets

2. Lecture 7a Managing Hardware Assets Managing Hardware and Software Assets

3. Introduction • The use of computer hardware technology can have a profound impact on business performance. • Therefore, computer hardware technology is an important organizational asset that must be properly managed. • Managers need to balance the cost of acquiring hardware resources wit the need to provide a responsive and reliable platform for delivering IS applications. Managing Hardware and Software Assets

4. Most Important Issues in Managing Hardware Technology Assets • Understanding the new technology requirements for e-commerce and the digital firm • Determining the total cost of ownership (TCO) of technology assets • Identifying technology trends impacting the organization’s IT infrastructure Managing Hardware and Software Assets

5. Hardware Technology Requirements for E-commerce and Digital Firm • E-commerce and e-business are placing heavy demands on hardware technology because organizations are replacing so many manual and paper-based processes with electronic ones. • Companies are processing and storing vast quantities of data for data-intensive applications. • Therefore, much larger processing and storage resources are required; organizations must also planned for capacity and scalability. Managing Hardware and Software Assets

6. The Strategic Role of Storage Technology in a Digital Firm • With e-commerce and e-business, altho’ the role of papers may be reduced, data of all types must be stored electronically and have to be made available whenever they are needed. • For business to occur 24 hours a day, all relevant data must be stored for on-line access, and all these data must be backed up. Managing Hardware and Software Assets

7. Capacity Planning and Scalability • As firms’ e-commerce/e-business activities expand, managers and IS specialists must carefully review their servers and other infrastructure components to make sure they can handle increasing numbers of transactions and users while maintaining a high level of performance and availability. • In this case, attention should be given to hardware capacity planning and scalability. • Capacity planning: the process of predicting when a computer hardware system becomes saturated to ensure that adequate computing resources are available for work of different priorities, and that the firm has enough computing power for its current and future needs. Managing Hardware and Software Assets

8. Scalability • E-commerce/e-business calls for scalable IT infrastructures that have the capacity to grow with the business. • Servers need to provide the processing power to keep electronic commerce up and running as Web site visitors and customers grow in number. • Scalability: the ability of a computer, product or system to expand to serve a larger number of users without breaking down. • Approaches to achieving scalability: • scale up: e.g. replacing a small server with a larger multiprocessor server or even a mainframe • Scale out: e.g. adding a large number of smaller servers • The choice of approach depends on the nature of the application/set of applications requiring upgraded hardware capacity. Managing Hardware and Software Assets

9. Hardware Acquisition and TCO of Technology Assets • The actual cost of owning a technology resources includes both direct and indirect costs: original purchase costs of computers and software, hardware and software upgrades, and maintenance, technical support, and training. • Total Cost of Ownership (TCO) model can be used to analyze direct and indirect costs to help firms determine the actual costs of specific technology implementations. When all costs are considered, the TCO for a PC might run up to three times the original purchase price of the equipment. • A key to reducing TCO is to create a comprehensive asset management plan. Many organizations cannot measure the TCO of their technology assets because these have never been inventoried. • Organizations need to catalog and manage their hardware and software assets. Software tools are now available to help identify and track these technology assets. Managing Hardware and Software Assets

10. Monitoring Technology Trends • Computing technology continues to change, requiring managers to constantly monitor technology trends and make decisions about upgrading the firm’s IT infrastructure. • Microminiaturization and Information appliances • Social interfaces Managing Hardware and Software Assets

11. Lecture 7b Managing Software Assets Managing Hardware and Software Assets

12. Introduction • Software costs represent one of the largest IT expenditures in most firms, amounting to more than double the expenditures for computer hardware, and thus software represents another major technology asset. • Managers are required to make decisions concerning the selection, purchase and utilization of their organization’s software assets. • Important issues: rent or build decisions and software maintenance. Managing Hardware and Software Assets

13. Rent or Build Decisions: Using ASP • Technology expenditures will increasingly focus on ways to use software to cut down on “people” costs as opposed to computer hardware costs by increasing the ease with which users can interact with the hardware and software. • More organizations are using software packages, fourth-generation languages, and OO tools because such software lowers “people” costs by reducing the need for IT-skilled people to develop programs. Renting software and software services from other companies can further lower these costs. Managing Hardware and Software Assets

14. Application Service Providers (ASPs) • ASP: company providing software that can be rented by other companies over the Web or a private network. • Instead of buying and installing software programs, subscribing companies can rent the same functions from these companies. • Companies must carefully assess ASP costs and benefits, weighing all management, organizational, and technological issues because in some cases the cost of renting software can be more than purchasing and maintaining the application in-house. However, there may be benefits of paying more for software through ASP if the decision allows the company to focus on core business issues instead of technology challenges. Managing Hardware and Software Assets

15. Software Maintenance • After software has been created, it usually has to be modified over time to incorporate new information requirements. • Because of the way software is currently designed, this maintenance process is very costly, time consuming, and challenging to manage. • In most IS dept., more than 50% of staff time is spent on maintaining the software for existing systems. Managing Hardware and Software Assets

16. Selecting Software for the Organization • Although managers need not become programming specialists, they should be able to use clear criteria in selecting application and system software for the organization. Important criteria include: appropriateness, efficiency, compatibility, and support. Managing Hardware and Software Assets