text book

1. Alexander Setchin, Topic 8B
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615-328 TUTORIAL PAPER
WHAT WOULD YOU REGARD AS THE KEY CHALLENGES IIN
MANAGIING GLOBAL IINFORMATIION SYSTEMS AND IIT
IINFRASTRUCTURE??
:: Abstract
Through critical analysis of management theories, fundamental concepts of enterprise computing and
detailed statistics on several large companies this paper aims to define the importance of an effective
IT infrastructure and various difficulties of managing it globally. Firstly it defines the critical
importance of enterprise computing as a process of managing global information systems. Then, to
further explain the process, it highlights its four underlying management concepts and the integral
challenges behind them.
:: Introduction
At present the business world is experiencing globalisation, internationalisation of markets, e-business
and the knowledge economy. These are among the interconnected phenomena whose
emergence creates new challenges for the growth and adaptation of numerous businesses
(Raymond, 2003). Organisations which adopted a dependent view (IT infrastructure investments
derived from strategic context) or an enabling view (infrastructure capability is a core competence
and integrated with strategic context) are highly dependent on their present IT infrastructures
(Broadbent, 2001) which link them with partners into unified networks that share resources, best
practices, sales information and “increase communication with partners in order to react rapidly to
market changes and deploy products efficiently…” (Laudon & Laudon, 2000). Companies are
facing constant challenges of planning, designing, implementing and managing global information
systems and IT infrastructures. IT infrastructures have become one of the most critical and
intricate investment decisions made by executives and are an important factor in businesses’ long-term
competitive prospects.

2. Alexander Setchin, Topic 8B
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:: Four Management Concepts of Enterprise Computing
In order to understand the complexities of managing a global Information Systems, the term
enterprise computing and four underlying management concepts (IT investment portfolio, IT
infrastructure, business logic
and information architecture -
FIGURE 1
(Laudon & Laudon , 2000)
Figure 1) need to be closely
examined. According to the two
leading academics Kenneth
Laudon and Jane Laudon,
enterprise computing is a
method of planning and
designing of systems that
“integrates the key business
processes within a firm and
even integrates business processes across an entire industry” (Laudon & Laudon, 2000).
IT investment portfolio is the first management concept, which from Weill’s and Broadbent’s
point of view is an approach which aggregates all investment decisions such as costs, risks and
benefits of investments into one unified procedure (Weill and Broadbent, 1998). The challenge
that comes with IT investment portfolio is determining whether it is returning an acceptable
benefit to the firm given the competitive circumstances. It is up to the company to ascertain what
benefits it values most, whether it is substantial of financial returns or long-term market-dominating
strategic position. Several challenges are apparent in establishing what benefits a
current portfolio may bring to a global organisation. Evaluation and measurement methods are
constantly being developed to tackle that difficulty. One of the most prominent methods remains
a balanced scorecard (BSC) which was initially developed by Robert Kaplan and David Norton to
allow businesses to evaluate corporate IT and on the whole to drive their strategies based on
measurement and follow-up (Grembergen & Bruggen, 2000). Additionally, another challenge for
the management is recognising exactly how one firm’s strategic position is affected by the
organisation-wide IT investment. This yet again, requires looking at organisation’s obje ctives and
business strategy and comparing this to the current and future-standing strategic position.
The second component in enterprise computing is an IT infrastructure which according to a well
known theorist James O’Brien consists of IT equipment, software and human resources required
to control the equipment. This definition is indeed analogous to Weill’s and Broadbent’s definition
of the structure of IT infrastructure which according to them consists of shared and standard IT
applications, shared IT services, human IT infrastructure and IT components (Weill and
Broadbent, 1998). The key complex decisions which managers face is determining whether the

3. Alexander Setchin, Topic 8B
right hardware, software and human resources have been chosen and most importantly whether
current infrastructure is capable of achieving the firm’s strategic objectives. These decisions are
indeed critical to business success and ultimately determine whether an organisation will achieve
low return on investments or introduce an IS system which is highly standardised for
compatibility, cost efficient, of high availability and extensible for further updates. According to
two prominent academics Weill and Vitale, presently many businesses handle such issues by
establishing satisfactory performance benchmarks and then comparing them to the results. Many
aspects of an IS such as source code quality, data quality and reliability, system reliability, ease of
use, output quality and portability of a new or modified IS are critically analysed (Weill & Vitale,
1999).
Business logic is another significant component of enterprise computing. It determines an
organisation’s business rules; that is how a firm is delivering its products or services and broadly
speaking what business processes exist to achieve set business strategic objectives. In case of an
infomediary or an online auction broker such as e-Bay the business logic would be to deliver
highly sought-after information or to encapsulate the unimportant intricacies of online
transactions between customers, businesses or a combination of the two. Subsequently, the
definition and scope of this business logic is completed by implementing online information
portals or auctions and charging users monthly subscription fees (i.e. Businessweek.com) or
transaction fees in case of online auction brokering or transaction brokering (i.e. PayPal.com).
Lastly, to support the business logic and key business processes, sound information architecture
must be designed and implemented. Information architecture encompasses everything an IS holds
within itself, from large-scale applications to networks which facilitate communication,
transactions and service delivery on a global scale. Presently, numerous businesses still see
information architecture as just hardware and software and thus fail to align the current IS with
organisational strategic objectives (McKeen & Smith, 1996). The infrastructure must be closely
evaluated to determine whether business processes have been improved and optimised, that
correct design and implementation decisions have been made and whether or not a satisfactory
business value have been realised (Laudon & Laudon, 2000). Once again, benchmarking of
information architecture is highly recommended to be used by organisations to determine the level
of success.
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4. Alexander Setchin, Topic 8B
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:: Difficulties of Developing an Effective Enterprise Computing Model
One of the key challenges for IT managers is bridging the gap between the ideal enterprise model
which states that in order to optimise the return on IT investments, “management decisions about
firm infrastructure should be driven by business strategy, business models, business processes and
information architecture decisions” (Laudon & Laudon, 2000) and the reality of complexities of
doing business at the present moment. Currently many managers are unable to see and establish a
link between business strategies, business environments, IT portfolio of investments, IT
infrastructure, information architecture and business processes which is the recipe for optimising
the return on investment in IT infrastructure. Very few corporations such as AOL Time Warner
and Coca-Cola Amatil have realised that to optimise the returns on investments just enough
infrastructure should be purchased to satisfactorily support present business processes and
strategy, that there should be close coupling between the architecture and the business processes,
an adequate strategy must be established to tackle rising competition and lastly a robust control
model must be in place to ensure proper alignment of IT infrastructure to business strategy
(Broadbent, 2001).
:: Conclusion
The unification of computing, telecommunications, the pervasiveness of the Internet and other
mediums of e-commerce, brought strategic opportunities and threats for each organisation. IT
infrastructure has become one of the biggest and most central investment decisions. Many
businesses struggle to generate returns on their IT investments, facing many challenges of
choosing the optimum combination of technologies, maintaining alignment of business processes
and architecture and establishing an adequate strategy to cope with soaring competitive pressures.
In spite of this, several organisations through carefully structured enterprise computing models are
able to implement robust IT infrastructures which generate acceptable benefits either as financial
returns, long-term strategic positioning or greater market share.
WORD COUNT: 1275

5. Alexander Setchin, Topic 8B
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:: Annotated Bibliography
1. Laudon, K. C., & Laudon, J. P. (2000). Management information systems: organization
and technology in the networked enterprise (Sixth ed.). Upper Saddle River, New Jersey:
Prentice-Hall, Inc. (220 – 222)
Laudons clearly outlined the challenges of maintaining a robust enterprise computing model.
Their detailed description of the four management concepts of enterprise computing helped
underpin the importance of having management decisions being driven by business strategy,
businesses models, business processes and information architecture decisions. They clearly
outlined the most common challenges that come with managing a global IS – from deploying
the most suitable technologies to aligning information architecture with the core business
strategy.
2. McKeen J. D. & Smith A. H. (1996). Management challenges in IS: Successful Strategies
and Appropriate Action. Chichester, New York.
Numerous challenges were identified by McKeen and Smith in regards to managing
information systems - from selecting hardware and software, to applying right human
resources for better system utilisation. In spite of this, the authors have not addressed the
challenges faced by companies which operate at a global level. Furthermore, the book
presented several evaluation methodologies which are crucial to the overall processes of
managing global information systems but are not so relevant to the given topic of discussion.
3. O’Brien J. A. (1996). Management Information Systems: Managing Information
Technology in the Networked Enterprise. Irwin, Chicago.
4. Raymond L, (2003), Globalisation, the knowledge economy, and competitiveness: A
business intelligence framework for the development SMES, ProQuest. Vol. 3, No. ½
Raymond clearly outlined external variables which have a direct impact on successful
management of global IT infrastructures. These variables were helpful in defining the
possible issues IT managers must deal with when working on a global scale but no definitive
challenges of managing global IT infrastructures were explicitly stated by the author.

6. Alexander Setchin, Topic 8B
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5. Van Grembergen, W., & Van Bruggen, R. (1997). Measuring and improving corporate
information technology through the balanced scorecard. The Electronic Journal of
Information Systems Evaluation, 1 (1). (245)
Grembergen and Bruggen identified the balance scorecard strategic management system for
helping businesses to drive their strategies based on measurement and follow up. Whilst it
was effective in defining the stages of applying the balance scorecard in practice, the paper
was limited in identifying several of the key challenges of managing global IT infrastructures.
6. Weill, P. & Broadbent, M. (June 12, 2001). Competing with IT infrastructure Strategic
Opportunities and Threats, With a Widening Range of Options, FPMastering (On-line).
Available: http://www.nationalpost.com/features/fpmastering/061201story6.html
(September 14, 2003)
Weill and Broadbent were helpful in understanding the structure and operation of global IT
infrastructures and various types of systems such as the informational, transactional,
infrastructure and strategic systems. These made the process of defining the complexities of
managing global IS more apparent and assisted in understanding the ways that companies
can obtain benefits from the IT investment portfolio which is one of the four principal
management concepts of enterprise computing.
7. Weill, P., & Vitale, M. (1999). Assessing the health of an information system
applications portfolio: an example from process manufacturing. MIS Quarterly , 23 (4), 601-
624. (265)
8. Weill, P., & Broadbent, M. (1998). Leveraging the new infrastructure. Boston,
Massachusetts: Harvard Business School Press.49-61, 85-93 (85)