Business Technology Organization Managing Digital Information Technology for Val

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2013
Business Technology OrganizationManaging Digital Information Technology for Value Creation - The SIGMA ApproachAuthors:

• Vincenzo Morabito
• …show all 1hide
  

ISBN: 978-3-642-32697-4 (Print) 978-3-642-32698-1  (Online)



Managing Digital Information Technology for Value Creation - The SIGMA Approach

Morabito, Vincenzo

2013, XIV, 173 p. 25 illus., 18 in color.

ISBN 978-3-642-32698-1

  Immediately available per PDF-download (no DRM, watermarked)

About this book

• The book integrates and compares major contributions in the field of information technology and information management
•                                         Intended for top managers, IT managers and graduate students
•                                         Presents the SIGMA approach (Strategic Information Governance Modelling and Assessment)
  

In this book the author aims to describe the path from Information Technology to Information Management and Information Governance. This path allows organizations to identify IT Business Value and take advantage of it. The book synthesizes the main approaches that have emerged in recent years, compares these approaches along multiple variables, and finally proposes an advanced and new approach to Information Governance, based on the concept of Organizational Absorptive Capacity.
Furthermore, the book presents a new approach to Information Management: the SIGMA (Strategic Information Governance Modelling and Assessment) approach. The new approach is centered on information as a key factor allowing integration between IT applications, organizational capabilities and business strategy. In particular, the Absorptive Capacity concept is presented and discussed: this concept represents the ability of an organization to maintain and absorb the potential of information and IT investments. After having presented and discussed the model, we also provide the reader with a brief presentation of how the SIGMA approach should be applied in companies.
The book adopts a scientific approach to ensure methodological rigour; however, it is also concrete and describes problems from the viewpoints of managers, adopting a clear and easy-to-understand language in order to capture the interest of top managers and graduate students.

Contents
Part I
1 The IT Business Value . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
The Dream Commodity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
When IT Does not Matter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
So, What . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
The Sources and the Impacts of IT Business Value . . . . . . . . . . . . . . . . 13
The IT Business Value for Operational Performance . . . . . . . . . . . . . . 14
IT Business Value for Strategic Performance . . . . . . . . . . . . . . . . . . . . 16
From Information Technology to Information Management . . . . . . . . . 18
Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
2 An Information Management Approach Emphasizing
on the ‘I’ in IT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
Role of Information as an Organizational Resource . . . . . . . . . . . . . . . 25
From Information to Information Management . . . . . . . . . . . . . . . . . . . 27
Information Management Evolution . . . . . . . . . . . . . . . . . . . . . . . . . . 28
Improving Company Performance . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
The IT-Centered Approach . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
The Information-Centered Approach . . . . . . . . . . . . . . . . . . . . . . . . 33
The People-Centered Approach . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
Data Mining . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
Signaling . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
Screening . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
From Information Management to Knowledge Management . . . . . . . . . 36
Defining Knowledge Management: A Good Information Management
or Another to Information Management . . . . . . . . . . . . . . . . . . . . . . . . 37
xi
Knowledge Management Practices . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
Process . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
Type . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
Level . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
Context . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
3 The Information Operation Approach . . . . . . . . . . . . . . . . . . . . . . . 45
Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
Why Information Is the Responsibility of Every Manager . . . . . . . . . . . 46
Strategic Information Alignment Framework . . . . . . . . . . . . . . . . . . . . 48
Adding Value with Customers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
Creating New Reality . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
Reducing Costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
Minimizing Risks . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60
Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61
References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62
4 The Information Orientation Approach . . . . . . . . . . . . . . . . . . . . . . 63
Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63
The Information Orientation (IO) Model: Measuring and Managing
Information Capabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65
Measuring Information Capabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . 67
Managing Information Capabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . 68
Putting the Information Capabilities into Practice . . . . . . . . . . . . . . . . . 71
Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 73
References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 73
5 The Information Evolution Approach . . . . . . . . . . . . . . . . . . . . . . . . 75
Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 75
Challenges to the Existence of Businesses . . . . . . . . . . . . . . . . . . . . . . 77
Information Evolution (IE) Model . . . . . . . . . . . . . . . . . . . . . . . . . . . . 79
Dimensions Without Alignment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 83
Advancing in Levels: Transition from Level 1 to Level 5 . . . . . . . . . . . 84
Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 87
References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 88
6 The Foundation for an Information Approach . . . . . . . . . . . . . . . . . 89
Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 89
Building Foundation for Strategy Execution . . . . . . . . . . . . . . . . . . . . . 91
Defining an Organizational Operating Model . . . . . . . . . . . . . . . . . . . . 92
Types and Dimensions of the Operating Model . . . . . . . . . . . . . . . . . . 94
Implementing the Organizational Operating Model Through Enterprise
Architecture . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 98
Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 102
References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 103
xii Contents
Part II
7 A Comparison of the Four Approaches . . . . . . . . . . . . . . . . . . . . . . 107
Synopsis of the Four Approaches . . . . . . . . . . . . . . . . . . . . . . . . . . . . 107
The Information Operation Approach . . . . . . . . . . . . . . . . . . . . . . . . 107
The Information Orientation Approach . . . . . . . . . . . . . . . . . . . . . . . 110
The Information Evolution Approach . . . . . . . . . . . . . . . . . . . . . . . . 111
The Foundation for an Information Approach . . . . . . . . . . . . . . . . . . 116
Advantages and Disadvantages of the Related Approaches . . . . . . . . . . 119
Advantages . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 119
Disadvantages . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 121
Similarities and Differences Between the Approaches . . . . . . . . . . . . . . 122
Similarities Between Approaches . . . . . . . . . . . . . . . . . . . . . . . . . . . 122
Differences Between Approaches . . . . . . . . . . . . . . . . . . . . . . . . . . . 123
Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 125
Example of Business Scenario . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 125
8 Organizational Absorptive Capacity and the Use of Information . . . 129
Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 129
Absorptive Capacity and its Mediation Role . . . . . . . . . . . . . . . . . . . . . 130
IS Integration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 133
Organizational Absorptive Capacity . . . . . . . . . . . . . . . . . . . . . . . . . . 134
Defining the Variables of IS Integration, Absorptive Capacity and
Business Performance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 136
IS Integration Variables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 136
Organizational Absorptive Capacity Variables . . . . . . . . . . . . . . . . . . . 137
Business Performance and Sustainable Competitive Advantage . . . . . . . 139
Discussion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 140
Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 141
References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 142
9 Strategic Information Governance Modeling and Assessment . . . . . 143
The Sigma Model . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 143
Agility and Its Role . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 143
Factors Affecting Firm Performance . . . . . . . . . . . . . . . . . . . . . . . . 144
Information Governance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 144
The Main Elements of the Model . . . . . . . . . . . . . . . . . . . . . . . . . . . . 146
The Sigma Model Tool . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 149
Check-up Tool . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 150
SIMBA: The Sigma’s Model Methodology . . . . . . . . . . . . . . . . . . . . . 153
Stage 1: Initiating the Project . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 155
Stage 2: Diagnosing the Current Situation of the Firm . . . . . . . . . . . . . 156
Activity 1: Evaluation of AS–IS Performance . . . . . . . . . . . . . . . . . . 156
Activity 2: Evaluation of AS–IS Capabilities . . . . . . . . . . . . . . . . . . 157
Activity 3: Evaluation of AS–IS Processes . . . . . . . . . . . . . . . . . . . . 157
Activity 4: Evaluation of the Information Conversion Practices
of a Firm . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 157
Contents xiii
Stage 3: Envisioning the To-Be State of a Firm . . . . . . . . . . . . . . . . . . 159
Activity 1: Developing the To-Be Vision of a Firm . . . . . . . . . . . . . . 159
Activity 2: Defining a Company’s To-Be Performance . . . . . . . . . . . 159
Activity 3: Defining a Company’s To-Be Capabilities . . . . . . . . . . . . 160
Activity 4: Target Key To-Be Business Processes . . . . . . . . . . . . . . . 160
Activity 5: Define How a Firm Will Manage Information
Conversion Structures . . . . . . . . . . . . . . . . . . . . . . . . . 160
Activity 6: Finalize Optimal Process Structure . . . . . . . . . . . . . . . . . 161
Stage 4: Design a Transition Plan . . . . . . . . . . . . . . . . . . . . . . . . . . . . 162
Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 162
References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 163
Further Reading . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 165

• Authors & Editors
  

Vincenzo Morabito, (Ph.D.), is a Professor of Information Systems and of Organization and Information Systems at Bocconi University in Milan (Italy), where he also serves as Director of the Master of Management Information Systems. His latest papers are on the Communications of the ACM, European Journal of Information Systems, International Journal of Technology Management and Journal of Information Technology. He has previously been a visiting research scholar at MIT and the University of Florida.

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