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The Right Mind-set for Managing IT

The Right Mind-set for Managing IT. M. Bensaou and Michael Earl HBR Sept-Oct 1998. North American and European Executives and IT. IT investments are unrelated to business strategy Payoff from IT investments is inadequate There’s too much technology for technology’s sake

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The Right Mind-set for Managing IT

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  1. The Right Mind-set for Managing IT M. Bensaou and Michael Earl HBR Sept-Oct 1998

  2. North American and European Executives and IT • IT investments are unrelated to business strategy • Payoff from IT investments is inadequate • There’s too much technology for technology’s sake • Relations between IT users and IT specialists are poor • System designers do not consider users’ preferences and work habits

  3. As A Result • Outsource IT • Hope Power Users Will Come to the Rescue • Blow Up IT

  4. Why? • IT is Both Exalted and Feared--IT should support/be strategy--Integrating IT with Business Goals Is Extremely Difficult

  5. Authors Conclusions: • Too many executives in the “West” are intimidated by the task of managing technology • IT should be managed--controlled even-- like any other competitive weapon in a manager’s arsenal • Thinking “revamped” by a a study of Japanese IT management

  6. And: • A Western executive might spend time to develop and IT strategy related to a firm’s strategy • A Japanese executive would base IT investment decisions on simple and easily quantified performance-improvement goals

  7. A Western manager might go for a leading-edge application in the the belief that it would deliver competitive advantage • A Japanese manager would look at performance goals and choose the technology-whether old or new-that would help him achieve those goals

  8. How Do We Decide What Information Systems Our Business Needs? • West:We develop an IT strategy that aligns with our business strategy • East:We let the basic way we compete, especially our operational goals, drive IT investments

  9. How Will We Know Whether IT Investments Are Worthwhile? • West:We adapt capital-budgeting processes to manage and evaluate IT investments • East:We judge investments based on operational performance improvements

  10. When We’ve Trying To Improve A Business Process, How Does Technology Fit Into Our Thinking? • West:We assume that technology offers the smartest, cheapest way to improve performance • East:We identify a performance goal and then select a technology that helps us achieve it in a way that supports the people doing the work

  11. How Should IT Users And IT Specialists Connect In Our Organizations? • West:We teach specialists about business goals and develop technically adept, business-savvy CIOs • East:We encourage integration by rotating managers through the IT function, collocating specialists and users, and giving IT oversight to executives who also oversee other functions

  12. How Can We Design Systems That Improve Organizational Performance? • West:We design the most technically elegant system possible and ask employees to adapt to it • East:We design the system to make use of tacit and explicit knowledge that employees already possess

  13. In Japan: • Investment in IT follows a logic of strategic instinct rather than strategic alignment • Issues are:-Customer satisfaction-Product quality-Customer service • IT investments are made in support of these business goals

  14. In the West: • The value-for-money mindset can be destructive • It can bias IT investments toward cost-saving projects rather than revenue generating ones-Recall Venkatramen and the issue of efficiency vs. effectiveness

  15. The “Five” IT Management Principles: West East Strategic Alignment Strategic Instinct Value for Money Performance Improvement Technology Solutions Appropriate Technology IS-User Relations Organizational Bonding Systems Design Human Design

  16. In Conclusion: • The authors imply that Western managers should adopt the Japanese model in order to achieve better IT results. • Do you agree? Why or why not?

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