Corporate Information Strategy and Management - Essay Example

Corporate information strategy and management Grade (Feb. 15th, Corporate information strategy and management 1. Identify the changes in the IT service model and the drivers of those changes? Commercial internet did not exist before the 1990s, and therefore the companies established proprietary technologies of their own to drive their businesses, which were just run from inside the firm. However, these forms of public internetworks were not suitable for the business customers and partners, since they were unsatisfactory (Applegate, Austin & Soule, 2009:285). The changes in the IT service model include the emergence of public internet that is based on an open system in the 1990s, which has enabled companies to build on their IT capabilities, and thus develop efficient models of delivering services to their customers and business partners (Applegate, Austin & Soule, 2009:285). It is now possible for companies to share communication with their customers and partners, through interactive means such as the web browsers, while also combining technologies from different vendors without experiencing problems (Applegate, Austin & Soule, 2009:286). The cost involved in implementing better-performing technologies has drastically reduced, since there is now more competition among the vendors, thus reducing the prices of their products (Applegate, Austin & Soule, 2009:286). The drivers of those changes include global internet access. The immense growth in internet has made it possible and easier to access varied computer applications regardless of where they are hosted, thus making software access easier and inexpensive (Applegate, Austin & Soule, 2009:288). Additionally, reduced lead time to market and the norm of 24-hour operations for businesses have served to improve the accessibility of diverse technologies, since the competition between vendors has reduced the time involved in delivering such products to the market. Skills shortage has also served to drive the changes in IT service model, since the shortage of qualified IT experts has forced business to continuously demand improved capabilities from the professionals, which has in turn served to deliver new products (Applegate, Austin & Soule, 2009:288). 2. Explain the new service models and their characteristics? The new service models are servers housed locally, which serves to enhance the physical proximity between the location of server machines and places where people are using the software, an aspect that has in itself, brought about more efficiency (Applegate, Austin & Soule, 2009:287). Further, the new service models entail software designed for high geographical distance operations, making it possible for the storage of files and documents in one geographical location, and the access and use of the same files in a distant region. Little infrastructure ownership also defines the new service models, considering that the end users are enlisting the services of service providers who own the infrastructure, thus reducing the need for end users to have infrastructures of their own (Applegate, Austin & Soule, 2009:287). The new service models are characterized by open communication standards that enhance the efficiency of communication. Further, the new service models are characterized by increased vendor competition which has served to reduce costs associated with the new models, while also ensuring availability and ease of accessibility of technologies and infrastructure (Applegate, Austin & Soule, 2009:287). The new service models are also characterized by shared infrastructure between firms, customers, partners and technology providers, since there is no longer need for owning infrastructure for the firms. Finally, cloud computing also characterizes the new models, where different firms are able to utilize the same resources without having inefficiencies of practical complexities (Applegate, Austin & Soule, 2009:287). 3. Describe managing risk through incremental outsourcing? Managing risk through incremental outsourcing is a concept that is applied where companies find themselves unable to develop some vital capabilities from within them, and they must use such capabilities, thus resulting to the companies outsourcing them (Applegate, Austin & Soule, 2009:292). Incremental outsourcing is adapted where the outsourced capability does not provide the company any competitive advantage against other competing businesses, thus finding no reason not to share the capability amongst many businesses. Managing risk through incremental outsourcing is a strategy that is applied towards containing costs, especially where the economic stakes that the company can suffer from outsourcing the services are not high (Applegate, Austin & Soule, 2009:293). Incremental outsourcing helps in avoiding the risks of own infrastructural failure, since a company can depend on shared infrastructure. Additionally, incremental outsourcing helps a company avoid the risks associated with disruptions, when the company wants to improve its systems, by offering the company an opportunity to use the shared infrastructure and thus avert any disruptions (Applegate, Austin & Soule, 2009:293). In conclusion, the concept of managing risk through incremental outsourcing helps a company to improve on its infrastructure and systems, without putting the entire future of the company at stake. 4. Discuss hosting? Hosting is a form of outsourcing for a company, which entails the choice of a physical location where the company systems and infrastructure will be situated (Applegate, Austin & Soule, 2009:294). It entails the choice of the management on exactly what functions it will pass over to the vendors to manage on its behalf, thus enabling the management to exercise control on the risks associated with outsourcing initiatives (Applegate, Austin & Soule, 2009:294). Hosting can be done through the hosting service provider industry that owns computers and infrastructure for hosting other companies systems and data, where the business operates similarly with that of letting office space. The limitation of this form of hosting is that; the whole business of management of the data and software applications, as well as the ownership of networks is the responsibility of the company, while the hosting industry only rents space to the company (Applegate, Austin & Soule, 2009:294). 5. Discuss colocation? Colocation hosting is another form of hosting, which entails a company renting space inform of a cage from Colocation hosting companies, which have less business to do with the company’s business, only renting the company power, connectivity and floor space (Applegate, Austin & Soule, 2009:295). The hosting company leaves the responsibility of owning the networks, servers and all equipment to the client company. While this method offers high availability, its limitation is that the client company requires hiring the services of experts to design the infrastructure within the cages, and then maintain and run the equipments (Applegate, Austin & Soule, 2009:295). 6. Explain managing large-scale outsourcing arrangements? Large-scale outsourcing entails an organization seeking the services of being hosted for a large part or all of its IT functions (Applegate, Austin & Soule, 2009:302). Thus, there are high risks that are involved in such a plan, thus requiring large investments and higher durations than incremental outsourcing. Large-scale outsourcing is mainly motivated by strategic, as opposed to operational reasons, while the impacts of such a contract to the client company is huge, since all or a higher percentage of its IT systems are handed over to the management of the hosting company (Applegate, Austin & Soule, 2009:302). The contract may extend even to 10 years, but it can be renegotiated in the course of the term, for diverse reasons associated with the benefits to both the client and the vendor. Thus, Large-scale outsourcing requires a high level of management of the relationship between the vendor and the client, to avert any eventual misunderstanding that may put the company’s stake at high risk (Applegate, Austin & Soule, 2009:303). 7. Identify outsourcing considerations based on enterprise position in the strategic grid? The outsourcing considerations include contract flexibility, owing to the fact that the economic and the technological environments keep changing, and thus the need to alter the outsourcing terms of contract may arise (Applegate, Austin & Soule, 2009:304). Further, a company requires considering the scope of outsourcing, as well as the risks associated with such scope, so that the high risk contracts can be avoided. For avoidance of putting the stakes of a company at higher risks, the company may outsource large parts of its IT functions, without outsourcing everything (Applegate, Austin & Soule, 2009:304). The expected cost savings should also be considered by the company, such that if the expected cost will be more than the intended benefits, the client company should think of renegotiating for the adjustment of the contract. Reference Applegate, L., Austin, R., & Soule, D. (2009). Corporate information strategy and management text and cases. (8th ed.). McGraw-Hill. Read More