A manager who has to manage an organization’s information systems (IS) faces many challenges. These challenges have to do with the rapid changes that the technology environment faces as well as the myriad issues a modern organization faces. Managing in a changing and dynamic environment means taking decisions and dealing with issues keeping in mind both the needs of the moment and the issues that will arise in the future.
The issues faced by a modern manager who has to deal with IS are posed as a series of questions below. The perspective from which these questions are posed is that of a Chief Information Officer (CIO) of an organization. A CIO is typically the person in any organization who has the responsibility of deploying and maintaining IS.
Table of Content
- 1 Challenges Faced by Manager in Managing Information Systems
Challenges Faced by Manager in Managing Information Systems
This is an executive-level job where the person takes decisions related to IS throughout the organization and partners with other executives to ensure that the organization’s goals are met with the help of IS. The CIO is invested with all the responsibilities of high-level executives that include managing all IT personnel in the organization.
- What Information Systems to Build?
- How Much to Spend on Information Systems?
- What Level of Capabilities Should Be Created With Information Systems?
- How Fast and Accurate Should the Services Be?
- What Security Levels Are Required?
- What Functions Should Be on the Cloud?
What Information Systems to Build?
This question addresses the fundamental need for an information system (IS) in the organization. IS serves many purposes and objectives and the manager has to determine which need in the organization has to be addressed. Identifying and prioritizing the need is the first task in answering this question.
For example, a firm may want to monitor its sales activities in an ongoing manner. The manager has to decide whether the need can indeed be fulfilled by a new IS and, if so, whether the IS should be built.
A complication that arises here is that there could be many different types of IS that address a given need. For instance, many types of systems can keep track of and provide information on sales activities. The challenge for the manager is in determining which system best suits the firm’s needs. If the system can be purchased from the market, and many vendors can provide one, then the challenge is to determine which will best suit the firm given its resources. If, however, the firm has an internal IS department then it may choose to build the system on its own.
At a third level, the need for an IS is determined by competitive and organizational considerations. For instance, if close competitors have acquired a sales management system and are deriving significant benefits from it, then the firm needs to respond appropriately. Furthermore, the manager has to examine the existing culture, structure, and infrastructure of the firm to understand if the new system will fit and in what manner it has to be acquired or introduced.
How Much to Spend on Information Systems?
When the need for an information system (IS) is clear, the next important decision is how much to spend on the system. Systems available in the market will have different prices and capabilities, and systems built in-house by the firm will have their internal cost estimation. The manager has to decide how much money has to be allocated to the system and in what manner. This is usually referred to as a budgeting decision.
One answer to this question is obtained by considering how much competitors are spending on similar systems. This information may be available from industry reports or publicly available financial information. The competitors, who are of the same size and structure and who have built a successful IS with the same capabilities, will indicate how much money to budget for the system.
Another answer is obtained from estimating the strategic importance of the system. This answer is computed by gauging the future income the system will provide after it is implemented and then computing a return on investment (ROI). Managers often decide on the worth of investment by assessing if the ROI is appropriate.
What Level of Capabilities Should Be Created With Information Systems?
Managers have to decide the extent of IS they are envisaging. For instance, the questions to be considered for sales of IS are:
- Should the system support the entire sales and marketing team of the firm or should it support a particular department’s activities?
- Should the system include collecting data from and providing reports to primary sales partners such as distributors and retailers?
- Should the system be available through the Internet or should it be made available through an internal organizational network?
These questions entail identifying the needs and priorities of the system (as was done in the first question) and weighing these against the budgets available. Managers have to decide against providing excessive capabilities that are not important and will not be used.
Also, managers have to keep in mind the issue of scalability. The system will be used initially with certain capabilities; however, as users grow comfortable with the system, they will demand more from the system. A related decision is whether certain requirements for computing should be outsourced. Outsourcing a function means asking a vendor, another company that has expertise in performing that function, to do the job.
The outsourcing vendor may provide employees who work on the firm’s site to do the job or they may work from outside the firm (using network connections to do their work). Outsourcing is an important decision that is covered in detail later.
How Fast and Accurate Should the Services Be?
Many information systems are designed to provide timely and accurate information. However, employees in many organizations now feel that they are being flooded with information, much of it which they don’t need. Moreover, the information may not be needed immediately and could have been provided sometime later also.
Managers in many organizations have to consider the issues of trade-offs between speed and accuracy of information. The focus has to be on the information needed for decision-making, which is usually much less than what managers are flooded with. Typically, information related to costs, sales, cash flow, payables, and inventory levels has to be accurate and timely. This information has to be provided on time to those who have to see this information to make decisions.
Information related to market share, competitor information, customer news, supplier news, and employee satisfaction is typically not needed immediately, and also not with much great accuracy. If the information in these latter categories is not entirely accurate and is based on rumors and unconfirmed reports, it is usually acceptable to managers, as they don’t expect this information to be accurate.
Researchers have also found that the type of information valued by managers varies by the conditions of the economy. For example, in an economy in which the firm is doing well, managers value information related to employee satisfaction and market share over other information. However, if the firm is not doing well in the given economy, then managers value information related to budgets and costs, receivables, cash flows, and productivity over others.
What Security Levels Are Required?
Modern information systems (IS) infrastructures are constantly under threats from internal and external sources. Internal threats arise from employees stealing data or fudging accounts or misusing the systems in some way.
External threats arise from computer viruses that enter through Internet services and disrupt the functioning of systems within the organization. Many other kinds of external threats arise from malicious persons wanting to do damage to the organization. An important decision for managers is to ensure an adequate level of safety and security for their IS. Excessive security measures are difficult to work with for most users, as they have to maintain many security-related practices regularly while working with the systems. High-security levels are also expensive to maintain.
Thus, extensive security is not practical unless the situation demands its implementation. Lax security, on the other hand, leads to problems of data theft, viruses, etc. as discussed above. The best security level has to be an organization-wide decision that brings in the security the organization is most comfortable with.
What Functions Should Be on the Cloud?
Cloud computing presents a new and innovative possibility for organizations to move their computing needs to an environment that is different from the traditional one. Cloud computing lets organizations rent facilities from providers and host their computing needs on this facility that is accessed through the Internet. The main advantage of Cloud computing for organizations is that they do not have to manage the facilities and infrastructure, and yet use all the features of the IS.
For example, many firms have started using Zoho Office (zoho.com), an office suite consisting of a word processor, a spreadsheet, a presentation package, an email software, and many other tools used in offices, through the Cloud. Users simply have to pay a regular charge, monthly, to use all these software packages, without having to buy hardware and software licenses of their own. All employees of the firm that rents such a Cloud facility can access these tools from their devices, such as laptops, mobile phones, and tablets, through the Internet.
The main decision that managers have to make concerning the adoption of Cloud computing is that of selecting the functions to move to the Cloud. Some of the challenges that the Cloud presents are those of security, reliable access to the Internet, and interoperability. Managers have to be careful about security arrangements while moving any functions to the Cloud.
Since the facilities are not under their control, they may not be entirely sure of the security of their data. Also, if firms move functions to the Cloud that are critical, they will have to ensure reliable access to the Internet. Sometimes firms may choose to keep core functions of the organization hosted on computers on their premises rather than place them on the Cloud, owing to security and reliable access reasons.
With information technology growing at a tremendous pace, there is a constant challenge that managers face – the challenge of ensuring that their IS remains current, relevant, and useful. For this purpose, all managers have to create a technology roadmap for their organization. This road map is like a plan for the evolution of the IS in the organization.
The road map considers the current infrastructure as the starting point and shows how the technology is expected to evolve and change in the future and how the organization will respond to those changes. The road map includes the organization’s strategic goals and plans and creates a technology plan that will support the former.
The technology roadmap decision includes answering the following example questions:
- What is the horizon for desktop computers and what will replace them?
- Which proprietary software in the organization should be replaced by free and open-source software?
- How should the current enterprise applications be upgraded and expanded?
- Which of the current networking components being used in the organization is going to phase out (i.e., they will not benefit from any more development)?
- What will be the future requirements for networking and telecommunications and how should infrastructure be created?