Chapter 5: Organizational Structures that Support Strategic Initiatives

Organizational employees must work closely together to develop strategic initiatives that create competitive advantages.

Ø  Ethics and security are two fundamental building blocks that organizations must base their businesses upon.

INFORMATION TECHNOLOGY ROLES AND RESPONSIBILITIES

Ø  Information technology is a relatively new functional area, having only been around formally for around 40 years.

Ø  Recent IT – related strategic positions:

             -   Chief Information Officer (CIO)

             -   Chief Technology Officer (CTO)

             -   Chief Security Officer (CSO)

             -   Chief Privacy Officer (CPO)

             -   Chief Knowledge Officer (CKO)

Chief Information Officer (CIO) 

 Oversees all uses of IT and ensures the strategic alignment of IT with business goals and  objectives

Broad Chief Information Officer functions include;

Ø   Manager – ensuring the delivery of all IT projects, on time and within budget.

Ø  Leader – ensuring the strategic vision of IT is in line with the strategic vision of the organization.

Ø  Communicator – building and maintaining strong executive relationships.

Average CIO compensation by industry
Industry	Average CIO Compensation
Wholesale/Retail/Distribution	$ 243,304
Finance	$ 210,547
Insurance	$ 197,697
Manufacturing	$ 190,250
Medical/Dental/Health Care	$ 171,032
Government	$ 118,359
Education	$   93,750

    

What concerns CIOs the most
%	CIOs Concerns
94	Enhancing customer satisfaction
92	Security
89	Technology evaluation
87	Budgeting
83	Staffing
66	ROI analysis
64 45	Building new applications
	Outsourcing hosting

        

Chief Technology Officer (CTO)

Ø  responsible for ensuring the throughput , speed, accuracy, availability and reliability of IT

Chief Security Officer (CSO)

Ø  responsible for ensuring the security of IT systems

Chief Privacy Officer (CPO)

Ø  responsible for ensuring the ethical and legal use of information

Chief Knowledge Officer (CKO)

Ø  responsible for collecting, maintaining and distributing the organization’s knowledge

THE GAP BETWEEN BUSINESS PERSONNEL AND IT PERSONNEL

Ø   Business personnel possess expertise in functional areas such as marketing, accounting and sales

Ø   IT personnel have the technological expertise

Ø  This typically causes a communications gap between the business personnel and IT personnel

IMPROVING COMMUNICATIONS

Ø  Business personnel must seek to increase their understanding of IT

Ø  IT personnel must seek to increase their understanding of the business

Ø   It is the responsibility of the CIO to ensure effective communication between business personnel and IT personnel

ORGANIZATIONAL FUNDAMENTALS – ETHICS AND SECURITY

Ø   Ethics and security are two fundamental building blocks that organizations must base their businesses on to be successful

Ø  In recent years, such event as the 9/11 have shed new light on the meaning of ethics and security

ETHICS 

Ø  Ethics – the principles and standards that guide our behavior toward other people

Ø  Privacy is a major ethical issues;

o   Privacy – the right to be left alone when you want to be to have control ever your own personnel possessions and not to be observed without your consent

Ø  Issues affected by technology advances

Intelligent property	Intangible creative work that is embodied in physical form
Copyright	The legal protection afforded an expression of an idea, such as a song, video game and some types of proprietary documents
Fair use doctrine	In certain situations, it is legal to use copyrighted material
Pirated software	The unauthorized use, duplication, distribution or sale of copyrighted software
Counterfeit software	Software that is manufactured to lock like the real thing and sold as such

Ø   One of the main ingredients in trust is privacy

Ø  Primary reasons privacy issues lost trust for e-business

1.	Loss of personnel privacy is a top concern for Americans in the 21st century
2.	Among Internet users, 37 percent would be “a lot” more inclined to purchase a product on a websites that had a privacy policy
3.	Privacy/security is the number one factors that would convert Internet researchers into Internet buyers

SECURITY – HOW MUCH WILL DOWNTIME COST YOUR BUSINESS??

Sources of Unplanned Downtime
Bomb threat	Hacker	Snowstorm
Burst pipe	Hail	Sprinkler malfunction
Chemical spill	Hurricane	Static electricity
Construction	Ice storm	Strike
Corrupted data	Insects	Terrorism
Earthquake	Lightning	Theft
Electrical short	Network failure	Tornado
Epidemic	Plane crash	Train derailment
Equipment failure	Frozen pipe	Smoke damage
Evacuation	Power outage	Vandalism
Explosion	Power surge	Vehicle crash
Fire	Rodents	Virus
Flood	Sabotage	Water damage (various)
Fraud	Shredded data	Wind

·       

How much will down time cost your business??
FINANCIAL PERFORMANCE •          REVENUE RECOGNITION •          CASH FLOW •          PAYMENT GUARANTEE •          CREDIT RATING •          STOCK PRICE	REVENUE •          DIRECT LOSS •          COMPENSANTORY PAYMENTS •          LOST FUTURE REVENUE •          INVESTMENT LOSES •          LOST PRODUCTIVITY
DAMAGED REPUTATIONS •          CUSTOMERS •          SUPPLIERS •          FINANCIAL MARKETS •          BANKS •          BUSINESS PATNERS	OTHER EXPENSES •          TEMPORARY EMPLOYEES •          EQUIPMENT RENTALS •          OVERTIME COSTS •          EXTRA SHIPPING CHARGES •          TRAVEL EXPENSES •          LEGAL OBLIGATIONS

PROTECTING INTELLECTUAL ASSETS

Ø  Organizational information is intellectual capital – it must be protected

Ø  Information security – the protection of information from accidental or intentional misuse by persons inside or outside an organization

Ø  E-business automatically crates tremendous information security risks for organization

Percentage of IT Budget Spent on Information Security

Average Reported Computer Security 

Expenditure/Investment per Employee