1、 CENTER FOR INFORMATION SYSTEMS RESEARCH Sloan School of Management Reconceptualizing IT Jeanne W. Ross and John F. Rockart January 1999 Revised CISR WP No. 302 Sloan WP No. 3986 2002 Massachusetts Institute of Technology. All rights reserved. R Research Article: a completed research article drawing
2、 on one or more CISR research projects that presents management frameworks, findings and recommendations. Research Summary: a summary of a research project with preliminary findings. Research Briefings: a collection of short executive summaries of key findings from research projects. Case Study: an
3、in-depth description of a firms approach to an IT management issue (intended for MBA and executive education). Technical Research Report: a traditional academically rigorous research paper with detailed methodology, analysis, findings and references. Massachusetts Institute ofTechnologyCambridgeMass
4、achusettsAbout the Center for Information Systems Research CISR MISSION CISR was founded 27 years ago and has a strong track record of practice based research on the management of information technology. As we enter the twenty-first century, CISRs mission is to perform practical empirical research o
5、n how firms generate business value from IT. CISR disseminates this research via electronic research briefings, working papers, research workshops and executive education. Recent and current research topics include: Architecture-Driven Business Strategies Converting Customer Data into an Asset The I
6、T PortfolioBenchmarks Travelers Insurance replaced its expansive but aging private network with state-of-the-art high-speed lines; Johnson and Statoil presented all 15,000 of its employees with a high-end computer for home or office use. At firms all over the world senior executives in a broad cross
7、-section of industries are investing their time and money to shore up corporate infrastructures. In the past, many of these same executives had, in effect, given their IT units a generous allowance and admonished them to spend it wisely. Now, in contrast, they are engaging in intense negotiations ov
8、er network capabilities, data standards, IT architectures, and IT funding limits. The difficulty of assessing the value of an IT infrastructure, coupled with technical jargon and business uncertainties, has made these conversations uncomfortable for most executives, to say the least. But the recogni
9、tion that global markets are creating enormous demands for increased information sharing within and across firms has led to the realization that a powerful, flexible IT infrastructure has become a prerequisite for doing business. The capabilities built into an infrastructure can either limit or enha
10、nce a firms ability to respond to market conditions (Davenport and Linder, 1993). In order to target a firms strategic priorities, senior executives must shepherd the development of the infrastructure (Broadbent and Weill, 1997). Sadly, most senior executives do not feel qualified to do so. As one C
11、EO described it: “Ive been reading on IT, but Im terrified. Its the one area where I dont feel competent.” New infrastructure technologies are enabling new organizational forms, and in the process, creating a competitive environment that increasingly demands both standardization for cost effectivene
12、ss and customization for responsiveness. Most firms infrastructures are not capable of addressing these requirements. Accordingly, firms are ripping out their old infrastructures in an attempt to provide features such as fast networks, easily accessible data, integrated supply chain applications, an
13、d reliable desktop support. At the firms which appear to be weathering this transition most successfully, senior management is leading the charge. Over the past two years, we have done in-depth studies of the development of the IT infrastructure at fifteen major firms. We have examined their changin
14、g market conditions and business imperatives, and we have observed how they have recreated their IT infrastructures to meet these demands. This paper 2 reports on our observations and develops a framework for thinking about IT infrastructure development. It first defines IT infrastructure and its ro
15、le in organizations. It then describes how some major corporations are planning, building, and leveraging new infrastructures. Finally, it describes the roles of senior, IT, and line managers in ensuring the development of a value-adding IT infrastructure. What is an IT Infrastructure? Traditionally
16、, the IT infrastructure consisted primarily of an organizations data center, which supported mainframe transaction processing. (See Figure 1.) Effectiveness was assessed in terms of reliability and efficiency in processing transactions and storing vast amounts of data. Running a data center was not
17、very mysterious, and most large organizations became good at it. Consequently, while the data center was mission critical at most large organizations, it was not strategic. Some companies, like Frito-Lay (Mead and Linder, 1987) and Otis Elevator (McFarlan and Stoddard, 1986), benefited from a partic
18、ularly clear vision of the value of this infrastructure and converted transaction processing data into decision making information. But even these exemplary infrastructures supported traditional organizational structures, consolidating data for hierarchical decision making purposes. IT infrastructur
19、es in the data center era tended to reinforce existing organizational forms rather than enable entirely new ones. Figure 1: The Role of IT Infrastructure in Traditional Firms In the current distributed processing era, the IT infrastructure has become the set of IT services shared across business uni
20、ts. Typically, these services include mainframe processing, network management, DecisionSupportTransactionProcessingCost-effective, reliabledata center operations3 messaging services, data management, and systems security (Broadbent and Weill, 1997). While still expected to deliver reliable, efficie
21、nt transaction processing, the IT infrastructure must also deliver capabilities, such as facilitating intra-organizational communications, providing ready access to data, integrating business processes, and establishing customer linkages. Delivering capabilities through IT infrastructure is much mor
22、e difficult than managing a data center. Part of the challenge is technological because many of the individual components are immature, making them both unreliable and difficult to integrate. The bigger challenge, however, is organizational, because process integration requires that individuals chan
23、ge how they do their jobs and, in most cases, how they think about them. Changing Organizational Forms and the Role of Infrastructure Historically, most organizations could be characterized as either centralized or decentralized in their organization structures. While centralization and decentraliza
24、tion were viewed as essentially opposite organizational structures, they were, in fact, different manifestations of the same structure hierarchyin which decisions made at the top of the organization were carried out at lower levels. (See Figure 2.) Decentralized organizations differed from centraliz
25、ed in that more decision-making was pushed down the hierarchy, but communication patterns were still vertical and decisions involving two business units were usually made at a higher level, so that business units rarely recognized any interdependencies. Figure 2: Traditional Organizational Models Ce
26、ntralization and decentralization posed significant trade-offs in terms of their costs and benefits. Very simply stated, centralization offered economies of scale, while decentralization allowed firms to be more Decentralized Centralized4 responsive to individual customers. Thus, the degree to which
27、 any firm was centralized or decentralized depended upon which of these benefits offered the most value. Global markets have forced firms to both reduce cycle times and to present a single face to, and have a single view of, global customers. As a result, firms have found it increasingly important t
28、o garner the benefits of both centralization and decentralization simultaneously. Johnson Stalk, Evans and Shulman, 1992). Figure 3: Federalist Organizational Model Federalist firms require much more horizontal decision making to apply shared expertise to complex problems and to permit shared resour
29、ces among interdependent business units (Quinn, 1992). Rather than rely on hierarchical processes to coordinate the interdependencies of teams, these firms utilize shared goals, dual reporting relationships, incentive systems that recognize competing objectives, and common processes (Handy, 1992). M
30、anagement techniques like these require greatly increased information sharing in organizations, and it is the IT infrastructure which is expected to enable the necessary information sharing. However, an edict to increase information sharing does not, in itself, enable effective horizontal processes.
31、 To ensure that investments in information technology generate the anticipated benefits, IT infrastructure must become a top management issue. Elements of Infrastructure Management At the firms in our study we observed five key elements in the design and implementation of the IT infrastructure: busi
32、ness processes, systems applications infrastructure services, the IT architecture, and corporate strategy. These build upon one another (as shown in Figure 4) such that corporate strategy Federalist6 provides the basis for establishment of the architecture, while the architecture guides decisions on
33、 the infrastructure, which provides the foundation for the organizational systems and processes. Figure 4: The IT Infrastructure Pyramid Corporate Strategy. The starting point for designing and implementing an effective infrastructure is the corporate strategy. The strategy defines the firms key com
34、petencies and how the firm will deliver them to customers. Many large decentralized firms, such as J&J, have traditionally had general corporate strategies that defined a firm-wide mission and financial performance goals but they allowed individual business units to define their own strategies for m
35、eeting customer needs. In the global economy these firms are focusing on developing firm-wide strategies for addressing global customer demands and responding to global competition. For purposes of developing the IT infrastructure senior management must have an absolutely clear vision of how the org
36、anization will deliver on its core competencies. General statements of financial and marketing goals do not provide the necessary precision to develop a blueprint for the foundation that will enable new organizational processes. The necessary vision is operations-based. It articulates Systems IT Inf
37、rastructure IT Architecture Corporate Strategy Processes 7 organizing principles by specifying the firms key cross-functional processes and how decisions will be made within and across those processes. Based on a clear vision of how it would service customers, Federal Express developed its Powership
38、 product, which allows any customer, whether an individual or a major corporation, to electronically place and track an order using just about any currently available technology. Similarly, JC Penneys internal management support system evolved from a clear vision of the process by which store manage
39、rs would make decisions about inventory and sales strategies. This included an understanding of how individual store managers could learn from one anothers experiences. Such a clear vision of how the firm will function provides clear prescriptions for the IT infrastructure. A corporate strategy that
40、 articulates key processes is absolutely essential for designing an IT infrastructure because otherwise neither IT nor business management can define priorities. The vision peels back corporate complexities so that the infrastructure is built around simple, core processes. This provides a solid foun
41、dation that can adapt to the dynamics of the business environment. Some firms have attempted to compensate for a lack of clarity in corporate goals by spending more money on their infrastructures. Rather than determine what kinds of communications they most need to enable, they invest in state-of-th
42、e-art technologies that should allow them to communicate with “anyone, anytime, anywhere.” Rather than determine what data standards are most crucial for meeting immediate customer needs, they attempt to design all-encompassing data models. This approach to infrastructure building is expensive and g
43、enerally not fruitful (Goodhue, Kirsch, Quillard, Wybo, 1992). Money is not a good substitute for direction. IT Architecture. The development of an IT architecture involves converting the corporate strategy into a technology plan. It defines both the key capabilities required from the technology inf
44、rastructure and the places where the technologies, the management responsibility, and the support will be located. Reflecting the vision of the core operating and decision making processes, the IT architecture identifies what data must be standardized corporate-wide and what will be standardized at
45、a regional level. It then specifies where data will be located and how it will be accessed. Similarly, the architecture differentiates between processes that must be standardized across locations from processes that must be integrated. The architecture debate is a critical one for most companies bec
46、ause the natural tendency, where needed capabilities are unclear, is to assume that extensive technology and data standards and firm-wide implementation of common systems will prepare the firm for any eventuality. In other words, standard-setting serves as a substitute for architecture. Standards an
47、d common systems support many kinds of cross-business integration and provide economies of scale by permitting central support of technologies. However, unnecessary standards and common systems limit business unit flexibility, create resistance and possibly ill-will during implementation, prove diff
48、icult to sustain, and are expensive to implement. The elaboration of the architecture should help firms distinguish between capabilities that are competitive necessities and those that offer strategic advantage. It guides decisions on tradeoffs between reliability and state-of-the art, between funct
49、ionality and cost, and between buying and building. Capabilities 8 recognized as strategic are those for which a firm can justify using state-of-the-art technologies, using non-standard technologies, and building rather than buying. Infrastructure. While firms architectures are orderly plans of the capabilities that their infrastructures should provide, infrastructures themselves tend to be in a constant state of upheaval. At many firms key elements of the IT infrastructure have been in place for 2030 years. Part of the infrastructure rebuilding process
