Business Systems Management Assessment No 2 – 2021

Monday May 24, 2021

Assessment 2 – Business Analysis

1. Create a hierarchy chart/organisational chart of the roles from the information provided.

2. What information does the chart created in item 1 provide to understanding the case study?

To understand the case study, the information on the above chart helps to understand the case study by showing the internal structure of the organization, the employees and their positions, and the reporting structure. This is important because it will show the decision-making framework and the reporting structure. Apart from the reporting relations and the chain of command, the chart allows a better understanding of how information and communications moves, either following a bottom up or top down structure depending on the type of information. For example, the need to start making products for sale and to increase profits include information flowing from the executive board through the president to the rest of the employees under the CIO. Similarly, the issues within the organization and the solutions suggested are some of the critical information moving from the different directors below the CIO all the way up to the president in a bottom up approach. Therefore, the chart has a number of roles including the stipulation of reporting relationships, the display of the chain of command, and the understanding of roles at different managerial levels.

3. How was IT perceived in the originating organisation and how does this contribute to the current position in the new company?

In the case, IT had not performed particularly well in the previous organization and the way the division was taken over meant that the conventional IT practices and tools, including information and technology, were retained to provide a smoother takeover. In the originating organization, IT was perceived as a non-priority both in making it an independent department and in ensuring that its role remained aligned to the business strategy. There was little investment in IT, poor leadership, a lacking strategy, and no portfolio management. The severity of the IT department from the previous organization impacted the troubled new division. First, there was an information dump from the old to the new organization, required for a transfer of information and other important technological support. However, some of the tools transferred were useless for the organization. Secondly, the new organization still regarded IT as a non-priority division, giving more focus to other business units. The new organization inherited a poorly aligned IT department to the business strategy, and sadly continued in the same approach and perception. The IT department was demoralized and felt constrained by the many reactive issues that emerged just to keep the business afloat.

4. The following is an excerpt from the information provided. Explain the implication and significance of each issue both from a business and IT perspective.

“The business unit managers were lobbying against change and prioritised their own interests above all. The systems were not designed for the specific industry sector and therefore weren’t easily usable.IT costs were high and unpredictable across all areas. In separation 500 core apps had been inherited when only 150 were relevant to the new company.”

The first issue is that “the business unit managers were lobbying against change and prioritised their own interests above all”. The implication and significance of this issue from the business perspective is that it created a divide amongst the different business units. There lacked a harmonious structure that ensured that while every department remained true to its purpose, it also ensured that the overall business strategy and objectives were adhered to. From an IT perspective, this issue meant that other business units did not consider the role of IT and how it contributed to the welfare of their own individual units. Again, the issue of aligned goals and strategies, between the units and the IT department emerge. The consequence is that the departments were in competition for the resources provided by the firm, creating a toxic work environment, especially for the IT staff.

In the second issue, the systems were not designed for the specific industry sector and therefore weren’t easily usable. From a business perspective, the implications are that the organization experienced operational inefficiency, increased costs of operating the systems, poor supply of information to the different decision makers, and reduced growth of the communication capabilities in the organization. From an IT perspective, the consequences were that the role of the IT division were limited. It also meant that IT infrastructure was used mainly to troubleshoot emergencies and to respond to different issues sue to poor applicability of the systems.

The third problem was that IT costs were high and unpredictable across all areas. From a business perspective, this led to an increase in operating costs, and thereby a reduction in overall profits. It also meant that the costs risks were high for the IT department, creating a high likelihood for failed projects due to these risks. From an IT perspective, high and unpredictable costs meant that effectiveness of roles and projects was severely compromised. The budgeting and cost functions were difficult to implement due to the complexities of an unpredictable cost structure.

Lastly, another issue was that in separation, 500 core apps had been inherited when only 150 were relevant to the new company. From a business perspective, the organization faced a challenge of integrating the different technologies and applications to the demands of the new organization. Another major implication is that the organization incurred considerable costs relating to the maintenance, staffing needs, and hardware requirements of the more than 300 useless core apps. From an IT perspective, the issue’s main implication include a cybersecurity risk posed by less frequently used apps and emerging issues in compliance and usage. Additionally, the existence of the many unused apps also meant that the operating costs were high, reducing the budget that could be used elsewhere to improve services.

5. Explain the impact of the following issues from both the business and IT perspective.

a. There was no alignment between business strategy and IT

The main implication from a business perspective is that there were no responses and solutions to maintain or support enterprise momentum. The business needs, those relating to the IT framework, were not adequately addressed. For the IT department, the lack of alignment meant that the solutions availed for the business were inefficient and only added to the cost of running the organization.

b. Process development and understanding was poor

For both the business and IT, poor process development and understanding meant that there were no continuous development of both the business and its offerings. It also meant that communication was hampered. Employee development was ineffective and the products and services offered could not be enhanced. Particularly for IT, this issue implied poor definition of roles up to the basic level.

c. Portfolio management and prioritization was non-existent

For the business, the implication was that the value of every program or project in their portfolio was poorly understood and linked to the overall business strategy. For the IT department and the business, a lack of portfolio management and prioritization meant that resources were deployed without effectiveness and the different projects were based on relationships rather than the value to the organization. Overall, bottlenecks and overheads increased creating a culture of reduced business growth and minimal collaboration.

d. IT investment was ad-hoc and lacked measure

From an IT perspective, ad hoc investment decisions meant that the management failed to consider the wider applications of every decision. From a business perspective, ad hoc decision making for IT investments meant that the business was only responding to emerging issues without planning ahead. Combined, the business and the IT issues created a culture of ineffective decision making, leading to a loss of market share

e. There was no accountability

A lack of accountability meant that the number of distracting activities in the business was high. Unproductive behaviour and culture also emerged due to the increase in the time and effort spent on tasks. The confidence and skills of different staff members were deteriorating instead of improving. Overall, the business and the IT department lacked a structure to ensure consequences for every action.

f. IT strategy and governance were non-existent.

A non-existent IT strategy and governance meant that the CIO was unable to align the department and all efforts to support the overall busies strategy. For the business, it meant a reduction and failure to generate shareholder value. The lack of governance reduced the role played by IT in aligning operations and management with the requirements and needs of the organization.

6. Create a list of ALL issues which are described within the case study. Assign to each of the directors shown (in your organisational chart developed in Item 1) accountability for the various issues. Obviously the governance issues fall under the Director of IT Strategy & Planning, the Project Office and Governance.

Issue Directors Responsible

The business unit managers were lobbying against change and prioritised their own interests above all. President and Director of Relationship Management

The systems were not designed for the specific industry sector and therefore weren’t easily usable. Director of Enterprise Architecture

IT costs were high and unpredictable across all areas. Director of Operations

In separation 500 core apps had been inherited when only 150 were relevant to the new company Director of Application Management

No alignment between business strategy and IT Director of Relationship Management

Process development and understanding was poor Director of IT Strategy & Planning, the Project Office and Governance

Portfolio management and prioritization was non-existent Director of Operations

IT investment was ad-hoc and lacked measure CFO and the Director of IT Strategy & Planning, the Project Office and Governance

There was no accountability CIO and the President

IT strategy and governance were non-existent Director of IT Strategy & Planning, the Project Office and Governance

6. Explain the importance of an IT Governance Framework and associated mechanisms for success. For each of the specific governance issues indicated below and described in text, describe a response that the director might offer to Vlad and the fellow directors.

An IT governance framework describes the structure for organizational, business processes and leadership regarding information technology (Gregory, Kaganer, Henfridsson, & Ruch, 2018). The importance to success of an organization is that the structure helps to ensure that standards within the IT department support and enable the attainment of overall business objectives and strategies. A governance framework in the IT division is important because it creates a chart that is vital in assigning responsibility, workflow organization, and ensuring that every critical task is completed on time. It facilitates the accountability of workers to their assigned roles and ensures a proper reporting structure for easier and faster decision making process (Gregory et al., 2018). The relationship that governance provides creates stability in the workplace.

What processes should be followed to identify key initiatives?

The first step would be to identify strategic initiatives, determine their scope, create alignment to the business goals and strategies, identify milestones and supporting activities, ensure measurable outcomes, establish a working timeline, and define accountabilities.

How should they be evaluated?

To evaluate the initiatives, satisfaction surveys amongst key stakeholders can be undertaken including staff members, managers, and product consumers. Additionally, goal attainment reports, behavioural observations, and self-reporting records can be used to measure effectiveness.

What criteria should be key?

Establishing a reporting structure and ensuring that information flows both ways from top to bottom and vice versa.

Who should prioritize initiatives?

The Director of Operations

How will they measure success?

To measure success, the director will consider the satisfaction levels of staff members and users of IT in the firm, check the schedule, quality of new structure, performance in relation to the business strategy, and stakeholder satisfaction

7. Why was governance selected as the most critical issue by Vlad and how does it impact the other director’s areas of control?

Every successful governance is founded on the basis of good governance. Governance does not only apply to the entire organization but also to the smaller pieces, such as departments and divisions, that make up the cogs and gears of the leadership structure. Governance is a critical issue for a number of reasons. First, Filatotchev, Poulsen, & Bell (2019) found that good governance ensures that there is a culture of integrity and accountability. With a notable governance structure, the IT function would show positive performance and sustainable progress. Good governance also means that the interests of the department are aligned to those of the organization (Filatotchev et al., 2019). Vlad identified it as an important issue because it impacts every other aspect of the IT function. It impacts other director’s areas of control by streamlining roles, defining responsibilities, and creating accountabilities. Governance is also critical to the structure that defines how employees relate to the overall organization. For example, it provides clarity, enables better management of expectations, enables better decision and policy formulation, and offers consistency in all of these factors. Employees are clear on their role and the reporting structure where governance is present. Vlad, selected governance as the most important issue because without it the entire firm would eventually collapse based on failures of the operating structure.

References

Filatotchev, I., Poulsen, A., & Bell, R. G. (2019). Corporate governance of a multinational enterprise: Firm, industry and institutional perspectives. Journal of Corporate Finance, 57, 1-8.

Gregory, R. W., Kaganer, E., Henfridsson, O., & Ruch, T. J. (2018). IT Consumerization and the Transformation of IT Governance. Mis Quarterly, 42(4), 1225-1253.