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Manage IT
as a Business
How to Achieve Alignment
and Add Value
to the Company
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Manage IT
as a Business
How to Achieve Alignment
and Add Value
to the Company
Bennet P. Lientz
Anderson Graduate School of Management
University of California,Los Angeles,California
Lee Larssen
The Strategic Edge
Amsterdam (cid:2) Boston (cid:2) Heidelberg (cid:2) London (cid:2) New York (cid:2) Oxford
Paris (cid:2) San Diego (cid:2) San Francisco (cid:2) Singapore (cid:2) Sydney (cid:2) Tokyo
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Elsevier Butterworth–Heinemann
200 Wheeler Road,Burlington,MA 01803,USA
Linacre House,Jordan Hill,Oxford OX2 8DP,UK
Copyright ©2004,Elsevier Inc. All rights reserved.
No part of this publication may be reproduced,stored in a retrieval system,or transmitted in
any form or by any means,electronic,mechanical,photocopying,recording,or otherwise,
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Library of Congress Cataloging-in-Publication Data
Lientz,Bennet P.
Manage IT as a business:how to achieve alignment and add value to the company/Bennet P. Lientz
and Lee Larssen.
p. cm.
Includes bibliographical references and index.
ISBN 0-7506-7825-9 (pbk. :alk. paper)
1. Information technology—Management. 2. Information technology––Economic
aspects. I. Larssen,Lee. II. Title.
HD30.2.L54 2004
004(cid:3).068(cid:3)4—dc22 2004005623
British Library Cataloguing-in-Publication Data
A catalogue record for this book is available from the British Library.
ISBN:0-7506-7825-9
For information on all Butterworth–Heinemann publications
visit our Web site at www.bh.com
04 05 06 07 08 09 10 10 9 8 7 6 5 4 3 2 1
Printed in the United States of America
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Contents
Preface xv
Part I
Govern and Plan Information
Technology
Chapter 1
Introduction
Issues with Information Technology and Management 3
Some Past Attempts at Improving IT 4
Efforts at Improving Business Processes 5
A Brief Review of IT Governance 6
Trends and Challenges in IT Governance 7
A Winning Approach for IT Governance 9
Benefits of the Approach 11
Organization of the Book 12
Alignment of IT and the Business 13
Manage Risk 14
Examples 15
Lessons Learned 16
v
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vi Contents
Performance Measures for the IT Organization 16
Summary 18
Chapter 2
IT Oversight and Governance
Introduction 21
General Purpose and Scope of Oversight 22
The Role of Business Processes 24
The Missing Roles of IT Governance that Cause
Business Failure 28
Modern Governance of IT 30
Modern Roles and Responsibilities of IT 32
Modern Roles and Responsibilities of Business
Units 33
IT Governance and Business Vision,Mission,and
Objectives 34
Benefits of Effective IT Governance 39
Alignment of IT and the Business 40
Manage Risk 40
Examples 40
Lessons Learned 41
Performance Measures for IT Oversight and
Governance 42
Summary 42
Chapter 3
Technology Assessment, Management, and
Direction
Introduction 45
Ten Myths about Technology 49
Steps in Technology Management 50
Assess Your Current Technology 51
Identify and Track New Technology 52
Select the New Technology 54
Develop a Framework for Technology Implementation and
Support 54
Implement the New Technology 55
Critical Success Factors for Technology
Management 56
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Contents vii
Alignment of IT and the Business 56
Manage Risk 58
Examples 58
Lessons Learned 59
Performance Measures for Technology
Management 60
Summary 61
Chapter 4
Develop Your Strategic IT Plan
Introduction 63
Measure Current IT 65
Review the Existing Business Plans and
Business Direction 66
Develop the Initial IT Strategic Plan 66
Relate the Strategic IT Plan to the Business Units 72
IT Planning Guidelines 73
Get the IT Strategic Plan and Action Items
Approved 75
Resource Management and Allocation 76
Update Your IT Strategic Plan 78
Alignment of IT and the Business 79
Manage Risk 79
Examples 80
Lessons Learned 81
Performance Measures for IT Planning 81
Summary 82
Part II
Manage the People and the Work
Chapter 5
Manage Risk and the Project Portfolio
Introduction 85
Where and How IT Projects Originate 86
Assess Current Projects 89
Project Evaluation and Selection 91
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viii Contents
Comprehensive Resource Allocation 93
Set Up a Winning Project 95
Define the Role of Management 97
Report on the Project 97
Hold Project Meetings 98
Implement Collaboration in Projects 99
Track Projects 99
Perform Multiple Project Analysis 100
Alignment of IT and the Business 100
Manage Risk 101
Examples 103
Lessons Learned 104
Performance Measures for Risk and Project Management 105
Summary 105
Chapter 6
Manage the IT Staff
Introduction 107
Evaluate the Current Staff 108
Recruit and Hire New IT Employees 111
Allocate Personnel Resources 112
Build a Collaborative IT Culture 114
Motivate IT Employees 114
Deal with Personnel Issues 115
Upgrade Skills of Junior Employees 116
Alignment of IT and the Business 116
Manage Risk 117
Examples 118
Lessons Learned 119
Performance Measures for IT Staffing 119
Summary 120
Chapter 7
Manage the Work
Introduction 121
Check on Work Informally 122
Assess Your Methods and Tools 123
Organize IT Work Efforts 125
Review Work and Project Milestones 125
Deal with Issues 127
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Contents ix
Use Lessons Learned Effectively 128
Decide on the Approach for Documentation 131
Introduce New Methods or Tools 133
Alignment of IT and the Business 134
Manage Risk 135
Examples 135
Lessons Learned 136
Performance Measures for Work Management 136
Summary 137
Part III
Direct and Coordinate IT
Chapter 8
Coordinate Business Unit Activities
Introduction 141
Collaborate on Defining the Roles of Business Units in IT 142
Create Long-Term Process Plans 145
Develop a Business Unit IT Strategy 148
Provide Effective End User Support 150
Alignment of IT and the Business 150
Manage Risk 151
Examples 151
Lessons Learned 152
Performance Measures for User Relations 153
Summary 154
Chapter 9
Direct Outsourcing and Manage Vendors
Introduction 155
Some Examples of Outsourcing Success and Failure 158
Pursue an Organized Approach to Outsourcing 158
Develop an Overall Outsourcing Strategy 159
Determine What Is to Be Outsourced 160
Prepare for Outsourcing 162
Prepare the Request for Proposal 163
Select the Right Vendors 164
Plan and Execute the Transition of Work 165
