Apidays Singapore 2024 - Modernizing Securities Finance by Madhu Subbu
Managing The Three Types of IT
1. Managing
the Th
th Three Types of IT
T f
Allen Lin
Department of Information Management, NCU at Taiwan
2. Three tasks for managing the three
types of IT
If the IT capabilities organization
IT selection
1 desire
di
IT adoption The creation of complements
2
Technologies
g
IT exploitation Capabilities Stay aligned
3
complements
p
2
3. 1 2 3
IT IT IT
selection adoption exploitation
F
Function IT
ti
(FIT)
Network IT
(NIT)
( )
Enterprise IT
(EIT)
3
4. 1 2 3
IT IT IT
selection adoption exploitation
Function IT
F ti
●
(FIT)
Network IT
●
(
(NIT))
Enterprise IT
●
(EIT)
4
5. Problems in IT selection
• Many companies buying IT don’t make
any sense.
y
• Because of Between 1999 and
2001,
2001 American
– E dl
Endless supply
l
companies spent
– Outside-in approach
$130 billion on IT
they never used
5
6. We should use an inside-out
approach to think in IT selection
• What do we need IT to do for us?
– Do our company’s engineers need to increase
py g
their experimentation capacity? (FIT)
– Do our sales and marketing departments
need to collaborate more often? (NIT)
– Do we need to standardize fulfillment
processes throughout the world ? (EIT)
6
7. More questions to think
in IT selection
• I it more important to have a single source of
Is i t tt h il f
employee data or to get weekly reports from
the sales force about client contacts?
• Would the R&D department be better off if it
could conduct more simulations or if it had an
online space for brainstorming?
• Would it be more valuable to enhance the
enterprise system by adding a layer of analysis
software or by extending it to suppliers through a
private data exchange ?
Inside-out approach, focus the need of organization
7
8. Case of IT selection - Cisco
• How Cisco used the inside-out approach to
refocus the IT selection process
– Cisco realized that there were drawbacks in its IT
decision-making process as it was trying to recover in
late
l t 2001 from a fall i revenues.
f f ll in
– CIO of Cisco found that Cisco had nine order status
tools.
tools Each of them used data from different
sources, which used different definitions for key
terms.
– As a result, the systems couldn’t give the company
a clear picture of its orders.
p
8
9. Case of IT selection – Cisco (cont )
(cont.)
– Th
There were similar problems i th sales
i il bl in the l
organization.
– B t and his colleagues realized th t Ci
Boston d hi ll li d that Cisco
needed to improve its standardization and
monitoring capabilities, so they selected an
capabilities
upgraded ERP system and a customer
database.
database
– Since Cisco couldn’t gain the capabilities it
wanted without those technologies however
technologies, however,
it chose to invest in them.
9
10. 1 2 3
IT IT IT
selection adoption exploitation
Function IT
F ti
●
(FIT)
Network IT
●
(
(NIT))
Enterprise IT
●
(EIT)
10
11. IT adoption
• Because:
– Putting the technologies company have
g g py
invested in to productive use was a hard
work.
• So:
– At this stage, managers’ main responsibility i
thi t ’ i ibilit is
to help create the complements that will
maximize IT’ value.
i i IT’s l
11
12. IT adoption for FIT
• FIT doesn’t bring its complements with
it, so managers must find ways of
, g y
identifying them.
BMW’s chief designer, Chris Bangle,
g, g,
want employee use computer-aided
styling software. But, employee
don’t want to use. Then chief designer
pressured (complements) them, at
last they do it
it.
12
13. IT adoption for NIT
• Voluntary rather than mandatory, they
make users feel more, rather than less, in
, ,
control of their work. Their adoption isn’t
difficult
difficult.
• However, new technologies, such as
groupware, wikis, and blogs, still have to
intervene (complements).
( p )
13
14. EIT hard to adopt
• Alth
Although
h
– The benefit look great to people at the top.
• But
– Employees usually dislike EIT technologies.
technologies
• Because
– EIT define new cross-function business
d fi f ti bi
processes.
–IImpose the processes on employees without
th l ith t
allowing employees to modify them.
14
15. Method to cope with the hard
adoption of EIT
• Executives must intervene forcefully
(
(complements) throughout EIT adoption
p ) g p
efforts.
15
16. Method to cope with the hard
adoption of EIT (cont.)
• The most important participants in this
task are not IT specialists or consultants
p
but business leaders from the areas
affected by the new technology
technology.
Cisco set up a business
CVS EIT project leader
process operating committee
had the authority to that consisted of six senior
deploy the new process executives and the CIO, they
d
despite opposition f
it iti from established th complements
t bli h d the l t
that the technology needed
the chain’s pharmacists.
even though there was
resistance within the
16
organization.
17. 1 2 3
IT IT IT
selection adoption exploitation
Function IT
F ti
●
(FIT)
Network IT
●
(
(NIT))
Enterprise IT
●
(EIT)
17
19. IT exploitation for FIT
• Companies can best exploit FIT by fine-
tuning organizational complements.
gg p
• (1995) American’s
Cup ili
C sailing
competition, used
simulation
i l ti
software to help
them d i b
h design boat
keels.
19
20. IT exploitation for NIT
• Employees exploit older NITs: e-mail and
instant messaging.
gg
• Business leaders exploit newer NITs:
blogs and wikis
wikis.
• They can help sustain and increase the
use of complements to make the
technology continually more effective.
20
21. Example for NIT exploitation
• Dresdner Kleinwort company,
p y,
Darren Leonard recalls how
he got his colleagues to use
g g
the company’s wiki.
– agenda for an upcoming
meeting
accelerate
– post questions, edit them, and wiki use
discuss
– assignment
21
22. IT exploitation for EIT
• EIT’s exploitation is often easier than its
adoption.
p
• Since the work of imposing new processes
is done by this stage the manager’s task
stage, manager s
is to leverage already standardized data
and work f flows.
22
23. EIT sometimes requires adding FIT
to help get better
Food services giant Sysco
implemented an ERP system and
data warehouse across its 80
regional business.
Sysco invested in business
intelligence software, which sits
on top of the ERP system
system,
extracts data from it, and
facilitates its analysis
analysis.
23
24. Conclusion
• For a resource to have an impact on
company’s competitive p
py p position, it must be
,
valuable, rare, inimitable, and non-
substitutable.
substitutable
• What about IT ?
• All three IT categories fail to meet these
criteria.
24
25. Conclusion (cont )
(cont.)
• However, software itself might not be any
of those things, a successfully
g, y
implemented system isn’t easy to replicate.
• Because of the managerial challenges
inherent in its implementation, IT meets
all f
four criteria when a company succeeds
in applying a technology and,
pp y g gy
consequently, gains valuable capabilities.
25
