Managing
     the Th
     th Three Types of IT
              T      f

                Allen Lin
Department of Information...
Three tasks for managing the three
            types of IT

                    If the IT capabilities organization
     I...
1           2          3
                   IT          IT        IT
                selection   adoption exploitation

F
...
1           2          3
                   IT          IT        IT
                selection   adoption exploitation

Fu...
Problems in IT selection
• Many companies buying IT don’t make
  any sense.
    y
• Because of           Between 1999 and
...
We should use an inside-out
  approach to think in IT selection
• What do we need IT to do for us?
  – Do our company’s en...
More questions to think
             in IT selection
• I it more important to have a single source of
  Is        i     t ...
Case of IT selection - Cisco
• How Cisco used the inside-out approach to
  refocus the IT selection process
  – Cisco real...
Case of IT selection – Cisco (cont )
                             (cont.)
 – Th
   There were similar problems i th sales
...
1           2          3
                   IT          IT        IT
                selection   adoption exploitation

Fu...
IT adoption
• Because:
  – Putting the technologies company have
          g             g       py
    invested in to pro...
IT adoption for FIT
• FIT doesn’t bring its complements with
  it, so managers must find ways of
    ,          g         ...
IT adoption for NIT
• Voluntary rather than mandatory, they
  make users feel more, rather than less, in
                 ...
EIT hard to adopt
• Alth
  Although
         h
  – The benefit look great to people at the top.
• But
  – Employees usuall...
Method to cope with the hard
         adoption of EIT
• Executives must intervene forcefully
  (
  (complements) throughou...
Method to cope with the hard
       adoption of EIT (cont.)
• The most important participants in this
  task are not IT sp...
1           2          3
                   IT          IT        IT
                selection   adoption exploitation

Fu...
IT exploitation
• Extract the maximum benefit from
  technologies once they are in place.
           g           y        ...
IT exploitation for FIT
• Companies can best exploit FIT by fine-
  tuning organizational complements.
       gg          ...
IT exploitation for NIT
• Employees exploit older NITs: e-mail and
  instant messaging.
                gg
• Business lead...
Example for NIT exploitation

• Dresdner Kleinwort company,
                           p y,
  Darren Leonard recalls how
 ...
IT exploitation for EIT
• EIT’s exploitation is often easier than its
  adoption.
       p
• Since the work of imposing ne...
EIT sometimes requires adding FIT
        to help get better

    Food services giant Sysco
implemented an ERP system and
...
Conclusion
• For a resource to have an impact on
  company’s competitive p
       py          p       position, it must be...
Conclusion (cont )
                    (cont.)
• However, software itself might not be any
  of those things, a successful...
Thanks
for
f your attention..
        tt ti


                     26
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Managing The Three Types of IT

  1. 1. Managing the Th th Three Types of IT T f Allen Lin Department of Information Management, NCU at Taiwan
  2. 2. Three tasks for managing the three types of IT If the IT capabilities organization IT selection 1 desire di IT adoption The creation of complements 2 Technologies g IT exploitation Capabilities Stay aligned 3 complements p 2
  3. 3. 1 2 3 IT IT IT selection adoption exploitation F Function IT ti (FIT) Network IT (NIT) ( ) Enterprise IT (EIT) 3
  4. 4. 1 2 3 IT IT IT selection adoption exploitation Function IT F ti ● (FIT) Network IT ● ( (NIT)) Enterprise IT ● (EIT) 4
  5. 5. Problems in IT selection • Many companies buying IT don’t make any sense. y • Because of Between 1999 and 2001, 2001 American – E dl Endless supply l companies spent – Outside-in approach $130 billion on IT they never used 5
  6. 6. We should use an inside-out approach to think in IT selection • What do we need IT to do for us? – Do our company’s engineers need to increase py g their experimentation capacity? (FIT) – Do our sales and marketing departments need to collaborate more often? (NIT) – Do we need to standardize fulfillment processes throughout the world ? (EIT) 6
  7. 7. More questions to think in IT selection • I it more important to have a single source of Is i t tt h il f employee data or to get weekly reports from the sales force about client contacts? • Would the R&D department be better off if it could conduct more simulations or if it had an online space for brainstorming? • Would it be more valuable to enhance the enterprise system by adding a layer of analysis software or by extending it to suppliers through a private data exchange ? Inside-out approach, focus the need of organization 7
  8. 8. Case of IT selection - Cisco • How Cisco used the inside-out approach to refocus the IT selection process – Cisco realized that there were drawbacks in its IT decision-making process as it was trying to recover in late l t 2001 from a fall i revenues. f f ll in – CIO of Cisco found that Cisco had nine order status tools. tools Each of them used data from different sources, which used different definitions for key terms. – As a result, the systems couldn’t give the company a clear picture of its orders. p 8
  9. 9. Case of IT selection – Cisco (cont ) (cont.) – Th There were similar problems i th sales i il bl in the l organization. – B t and his colleagues realized th t Ci Boston d hi ll li d that Cisco needed to improve its standardization and monitoring capabilities, so they selected an capabilities upgraded ERP system and a customer database. database – Since Cisco couldn’t gain the capabilities it wanted without those technologies however technologies, however, it chose to invest in them. 9
  10. 10. 1 2 3 IT IT IT selection adoption exploitation Function IT F ti ● (FIT) Network IT ● ( (NIT)) Enterprise IT ● (EIT) 10
  11. 11. IT adoption • Because: – Putting the technologies company have g g py invested in to productive use was a hard work. • So: – At this stage, managers’ main responsibility i thi t ’ i ibilit is to help create the complements that will maximize IT’ value. i i IT’s l 11
  12. 12. IT adoption for FIT • FIT doesn’t bring its complements with it, so managers must find ways of , g y identifying them. BMW’s chief designer, Chris Bangle, g, g, want employee use computer-aided styling software. But, employee don’t want to use. Then chief designer pressured (complements) them, at last they do it it. 12
  13. 13. IT adoption for NIT • Voluntary rather than mandatory, they make users feel more, rather than less, in , , control of their work. Their adoption isn’t difficult difficult. • However, new technologies, such as groupware, wikis, and blogs, still have to intervene (complements). ( p ) 13
  14. 14. EIT hard to adopt • Alth Although h – The benefit look great to people at the top. • But – Employees usually dislike EIT technologies. technologies • Because – EIT define new cross-function business d fi f ti bi processes. –IImpose the processes on employees without th l ith t allowing employees to modify them. 14
  15. 15. Method to cope with the hard adoption of EIT • Executives must intervene forcefully ( (complements) throughout EIT adoption p ) g p efforts. 15
  16. 16. Method to cope with the hard adoption of EIT (cont.) • The most important participants in this task are not IT specialists or consultants p but business leaders from the areas affected by the new technology technology. Cisco set up a business CVS EIT project leader process operating committee had the authority to that consisted of six senior deploy the new process executives and the CIO, they d despite opposition f it iti from established th complements t bli h d the l t that the technology needed the chain’s pharmacists. even though there was resistance within the 16 organization.
  17. 17. 1 2 3 IT IT IT selection adoption exploitation Function IT F ti ● (FIT) Network IT ● ( (NIT)) Enterprise IT ● (EIT) 17
  18. 18. IT exploitation • Extract the maximum benefit from technologies once they are in place. g y p 18
  19. 19. IT exploitation for FIT • Companies can best exploit FIT by fine- tuning organizational complements. gg p • (1995) American’s Cup ili C sailing competition, used simulation i l ti software to help them d i b h design boat keels. 19
  20. 20. IT exploitation for NIT • Employees exploit older NITs: e-mail and instant messaging. gg • Business leaders exploit newer NITs: blogs and wikis wikis. • They can help sustain and increase the use of complements to make the technology continually more effective. 20
  21. 21. Example for NIT exploitation • Dresdner Kleinwort company, p y, Darren Leonard recalls how he got his colleagues to use g g the company’s wiki. – agenda for an upcoming meeting accelerate – post questions, edit them, and wiki use discuss – assignment 21
  22. 22. IT exploitation for EIT • EIT’s exploitation is often easier than its adoption. p • Since the work of imposing new processes is done by this stage the manager’s task stage, manager s is to leverage already standardized data and work f flows. 22
  23. 23. EIT sometimes requires adding FIT to help get better Food services giant Sysco implemented an ERP system and data warehouse across its 80 regional business. Sysco invested in business intelligence software, which sits on top of the ERP system system, extracts data from it, and facilitates its analysis analysis. 23
  24. 24. Conclusion • For a resource to have an impact on company’s competitive p py p position, it must be , valuable, rare, inimitable, and non- substitutable. substitutable • What about IT ? • All three IT categories fail to meet these criteria. 24
  25. 25. Conclusion (cont ) (cont.) • However, software itself might not be any of those things, a successfully g, y implemented system isn’t easy to replicate. • Because of the managerial challenges inherent in its implementation, IT meets all f four criteria when a company succeeds in applying a technology and, pp y g gy consequently, gains valuable capabilities. 25
  26. 26. Thanks for f your attention.. tt ti 26

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