A Draft Approach of Modern Demand-Supply Model Based IT Organising

1. Structured Approach to IT Organising Copyright © 1998-2004 by Jussi V. Koivisto. All Rights Reserved. Professor Jussi V. Koivisto , Dr.Sc.(Econ.) Helsinki School of Economics, International Business Programme

2. Corporate Virtualisation - Toward Virtual Enterprise Model - Recently corporations have been moving in their demand-supply models From The Conventional Enterprise Model Toward The Virtual Enterprise Model 2001 by Jussi V. Koivisto. All Rights Reserved. Copyright © Externally Networked Company Resource Partners Output Partners Internally Networked Company The Company Suppliers Customers Sourcing Marketing

3. Conventional vs. Virtual Enterprise 2001 by Jussi V. Koivisto. All Rights Reserved. Copyright © Inputs, processes and outputs through networks and partners Inputs acquired from suppliers, outputs marketed to customers High flexibility, ad hoc structures, e-integration enabled Vertical hierarchy, organisational silos Social and networked integration and control Integration through structure, high level of formal control and command Higher security sensitivity, high intensity of information in- and outflows Lower security sensitivity, low intensity of information in- and outflows Dynamic equilibrium of bargaining power in decision-making Structural balance of power in decision-making Paradigm strategy approach Targets strategy approach Virtual (Networked) Enterprise Conventional Enterprise

4. Corporate Virtualisation of R&D - Market Structured Approach to Technology R&D - Recently corporations have been moving in their technology (R&D) strategies . . . From The Closed Paradigm Toward The Open Paradigm Henry Chesborough: Open Innovation , HBS Press, 2003 Source: Boundary of The Firm Research Develop- ment The Market [Internal] Research / Technology Projects Boundary of Research Develop- ment The Market The Firm Research / Technology Projects Current Market New Market

5. Corporate Virtualisation - Toward Virtual Corporate IT - Consequently, corporations need to move their IT models . . . From The Functionalised IT Model Toward The Market-Structured IT Model 2002 by Jussi V. Koivisto. All Rights Reserved. Copyright © General Mgmt & HQ Business Units/Functions IT IT IT IT IT as a business function (centralised or dispersed) The Company IT as a market-oriented strategic business support activity The Company Business Support Needs for New Services Existing Services IT Development IT Delivery IT Strategy

6. IT Has Two Different Business/Market Dynamics Key Drivers - Functionalities - Time to Delivery - Business Value & Investment - Net Present Value (NPV) - Capital Expenditures - Balance Sheet Development Markets Service Markets Key Drivers - Service Level - Continuity - Effectiveness - Cost Savings - Operating Expenditures - Statements of Operations (Results) IT Supply (Development) IT Supply (Delivery) Demand for IT New IT Services Current IT Services 2002 by Jussi V. Koivisto. All Rights Reserved. Copyright © IT Development IT Delivery IT Sourcing Business (User) Needs for IT

7. Market-Oriented Strategic IT Approach External Global Partners External Global Partners External Local Partners External Local Partners New Existing 2004 by Jussi V. Koivisto. All Rights Reserved. Copyright © IT Development IT Delivery Internal Global IT Units Internal Local IT Units Internal Global IT Units Internal Local IT Units Sourcing IT Service IT Development Sourcing Global Global Local Local Development Pro gramme Mgmt Management IT Service (Level) IT-Business Liaison Management IT and Business Architecture Management IT Strategy Need for Business Process Tools CORPORATE BUSINESS

8. IT/IS Demand vs. Supply 2004 by Jussi V. Koivisto. All Rights Reserved. Copyright © IT Development IT Delivery Internal Global IT Units Internal Local IT Units Internal Global IT Units Internal Local IT Units Sourcing IT Service IT Development Sourcing External Global Partners External Global Partners External Local Partners External Local Partners Global Global Local Local New Existing Development Pro gramme Mgmt Management IT Service (Level) IT-Business Liaison Management IT and Business Architecture Management IT Strategy Need for Business Process Tools CORPORATE BUSINESS IT DEMAND IT SUPPLY IT SUPPLY

9. Internal vs. Outsourced/External IT 2004 by Jussi V. Koivisto. All Rights Reserved. Copyright © IT Development IT Delivery Internal Global IT Units Internal Local IT Units Internal Global IT Units Internal Local IT Units Sourcing IT Service IT Development Sourcing External Global Partners External Global Partners External Local Partners External Local Partners Global Global Local Local New Existing Development Pro gramme Mgmt Management IT Service (Level) IT-Business Liaison Management IT and Business Architecture Management IT Strategy Need for Business Process Tools CORPORATE BUSINESS INTERNAL IT OUTSOURCED/ EXTERNAL IT OUTSOURCED/ EXTERNAL IT

10. IT Development (and Deployment) vs. Delivery 2004 by Jussi V. Koivisto. All Rights Reserved. Copyright © IT Development IT Delivery Internal Global IT Units Internal Local IT Units Internal Global IT Units Internal Local IT Units Sourcing IT Service IT Development Sourcing External Global Partners External Global Partners External Local Partners External Local Partners Global Global Local Local New Existing Development Pro gramme Mgmt Management IT Service (Level) IT-Business Liaison Management IT and Business Architecture Management IT Strategy Need for Business Process Tools CORPORATE BUSINESS IT DEVELOPMENT IT DELIVERY

11. Global vs. Local IT GLOBAL IT LOCAL IT 2004 by Jussi V. Koivisto. All Rights Reserved. Copyright © IT Development IT Delivery Internal Global IT Units Internal Local IT Units Internal Global IT Units Internal Local IT Units Sourcing IT Service IT Development Sourcing External Global Partners External Global Partners External Local Partners External Local Partners Global Global Local Local New Existing Development Pro gramme Mgmt Management IT Service (Level) IT-Business Liaison Management IT and Business Architecture Management IT Strategy Need for Business Process Tools CORPORATE BUSINESS

12. Strategic vs. Operative IT STRATEGIC IT OPERATIVE IT 2004 by Jussi V. Koivisto. All Rights Reserved. Copyright © IT Development IT Delivery Internal Global IT Units Internal Local IT Units Internal Global IT Units Internal Local IT Units Sourcing IT Service IT Development Sourcing External Global Partners External Global Partners External Local Partners External Local Partners Global Global Local Local New Existing Development Pro gramme Mgmt Management IT Service (Level) IT-Business Liaison Management IT and Business Architecture Management IT Strategy Need for Business Process Tools CORPORATE BUSINESS

13. Copyright © 1998-2004 by Jussi V. Koivisto. All Rights Reserved. THANK YOU THANK YOU