The Power of it survival Guide for the cio

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The Power of IT

Survival Guide for the CIO

Jan De Sutter

Cover Design Don Weigand

Cartoons Ted Goff

Web site

Copyright © 2003-2004 by Jan De Sutter – All rights reserved

No part of this work shall be reproduced, stored in a retrieval system, or transmitted by any means, electronic, mechanical, photocopying, recording or otherwise, without permission from the author. No patent liability is assumed with respect to the use of the information contained herein. Every reasonable effort has been made to respect the copyrights of other persons or entities. Anybody who believes that his or her copyrights have been infringed is invited to contact the author so that the necessary arrangements can be taken.
All terms mentioned in this work that are known to be trademarks have been appropriately capitalized. The author cannot attest the accuracy of this information. Use of a term in this work should not be regarded as affecting the validity of any trademark.
Although every precaution has been taken in the preparation of this work, the author assumes no responsibility for errors or omissions. Every effort has been made to make this work as complete and as accurate as possible, but no warranty of fitness is implied. The information provided is on an “as is” basis. The author shall have neither liability nor responsibility to any person or entity with respect to any loss or damages arising from the information contained in this work. This work reflects the personal opinions of the author and does in no way engage his current or previous employers.

Library of Congress Control Number: 2004113733

Publisher: BookSurge, LLC

North Charleston, South Carolina

ISBN: 1-59457-867-2


First Edition

I would like to thank Professor Carlos De Backer (University of Antwerp) and Professor Eddy Van Dijck (University of Brussels) for their thorough editing, helpful suggestions and thoughtful comments.

Also, a project of this magnitude requires the support of colleagues and friends. I address a special word of gratefulness for Dirk Dons and Niall O’Higgins, who gave useful advice on the purely technical matters.
Finally, this work could not be possible without the love and inspiration of my wife Lut and my children Marieke and Jacob. Thank you for being there!

Second Edition

I received many spontaneous reactions from my online readers and wish to thank them for that. All their remarks have been taken into account.

I also had the occasion to present this book in various international conferences and am very grateful to the organizations that allowed me to do so. During these conferences I had many exchanges with my public who gave some very useful feedback on the book and its content.

To my mother. May she rest in peace.

Table of Contents

Acknowledgements iii

First Edition iii

Second Edition iii

Table of Contents v

List of Illustrations xiii

List of Tables xvi

Introduction 1

Information Technology 2

The changing role of IT 3

Evolution of the IT Industry 5

About this book 6

Online Resources 9

IT management magazines and newsletters 9

IT Business Analysts 9

IT News sites 9

Further Reading 10

Infrastructure 11

Introduction 13

Computing Hardware 15

Computers 15

Digital technology 19

The von Neumann Architecture 20

Central Processing Unit 21

Main Memory 23

Internal buses 23

Input/Output 24


Operating Systems 32

Purpose of an Operating System 32

Structure of an Operating System 32

Characteristics of Operating Systems 33

Autonomic Computing 34

Security 34

Local Services 36

Storing Data 36

File Systems 36

Relational Database Management Systems (RDBMSs) 37

Object-Oriented Database Management Systems (OODBMS) 42

Object-Relational Database Management Systems (ORDBMS) 43

Benchmarking of DBMSs 45

Networking Services 47

The OSI Reference Model 47

The Internet protocols 49

Physical Layer 50

Data link layer 51

Network layer 60

Transport layer 65

Application layer 66

Security 68

Middleware 73

Basic Middleware Services 73

Advanced Middleware Services 74

Middleware Technologies 77

Application Frameworks 78

Application Servers 79

Best Practices 81

Automate your asset management 81

Automate your systems management 81

Avoid Single Points of Failure 82

Centralise your client management 83

Consolidate and rationalize continuously 83

Keep control over your architecture 84

Keep your infrastructure scalable 84

Printing also deserves a strategy 86

Reconsider your storage strategy 87

Rely on open standards, but don’t be stubborn 88

Standardize as much as you can 89

Use the right tools 89

Online Resources 91

Further Reading 93

Information Systems 95

Information Systems 96

Operational and Informational Systems 98

Production 99

Word Processors 99

Spreadsheets 101

Drawing tools 101

Computer Aided Design and Manufacturing (CAD/CAM) 102

Viewers and Players 102

Characteristics of Production Information Systems 103

Potential benefits of Production Information Systems 103

Collaboration 104

Collocated – Asynchronous groupware systems 105

Non-collocated – Asynchronous groupware systems 106

Collocated – Synchronous groupware systems 121

Non-collocated – Synchronous Groupware systems 121

Characteristics of Groupware Systems 123

Benefits of Groupware Systems 124

Potential risks of Groupware Systems 124

Business Process Support 125

Enterprise Application Integration (EAI) 127

Exchanging information with other organizations 131

E-commerce 134

Characteristics of Business Process Support Systems 138

Benefits of Business Process Support Systems 138

Risks Business Process Support Systems 138

Tactics 139

Metrics 139

Benchmarking 140

Activity Based Costing 141

Data warehousing 141

Characteristics of Tactical Information Systems 146

Benefits of Tactical Information Systems 147

Risks of Tactical Information Systems 147

Strategy 148

Balanced Scorecards 148

Data mining 150

Web Farming 151

Characteristics of Strategic Information Systems 152

Benefits of Strategic Information Systems 152

Best Practices 153

Also read the small print 153

Apply a layered approach where possible 153

Beware of biased advice 153

Build loosely coupled systems 154

Build, buy or borrow? 154

Choose for standards 155

Do not reinvent the wheel 155

Educate the users 155

Integrate the Business Processes 156

Know the real needs of the users 156

Make agility a primary goal 157

Rationalize the application portfolio 157

Online Resources 158

Further Reading 160

Human Resources 163

Introduction 164

Getting the Best Employees 166

Specifying Jobs and Roles 166

Recruitment 167

The Selection Interview 169

Outsourcing 171

Getting the Best of Employees 176

Theories on Human Nature 176

Teleworking 190

A new way of working 190

Technological Considerations 191

Work Force Planning 193

Planning techniques 193

Human Resources Management Systems (HRMSs) 194

Best Practices 197

Apply an open privacy policy 197

Avoid Strategic Outsourcing 198

Be fair and treat everyone equally and on merit. 198

Behave as a leader, not as a boss 198

Build a "win-win" relationship when you outsource 199

Concentrate on the Core Employees 199

Get legal advice when you outsource 200

Hire for Attitude, Train for Skill 200

Know the real costs 201

Praise loudly, blame softly 201

Train your people 201

Use Job Enrichment 202

Online Resources 203

Further Reading 204

Financial Resources 205

Introduction 206

Costing 209

Cost elements 209

Total Cost of Ownership (TCO) 210

Activity Based Costing (ABC) 212

Charging 215

Responsibility Centre 216

Budgeting 218

Budgeting Processes 219

Budgeting Methods 222

The Operations Budget 224

The Capital Budget 224

Other value factors 231

Best Practices 236

Budget for hardware every year 236

Buy your systems “just in time” 237

Good enough can be best 238

Invest to reduce TCO 238

Link the project expenses to the objectives 239

Manage your software assets carefully 239

Only go for win-win situations 240

Push for equal treatment of the IT budget 240

Retire your old IT systems in time 240

Set up pre- and post-implementation metrics 241

Start from the benefits, not the costs 241

Online Resources 242

Further Reading 243

Processes 245

Introduction 246

Business Processes 248

Typology 248

Quality and Quality Management 253

Business Process Reengineering 257

How to succeed a change project 259

The relationship between Business Change and IT 259

IT Processes 260

IT Service Management (ITSM) 260

Best Practices 268

Apply the self-service concept where possible 268

Build generic solutions 268

Create a unified view of the business objects 269

Make lightweight Information Systems 269

Online Resources 271

Further Reading 272

Projects 273

Introduction 274

Software Life Cycle 277

Life Cycle Modelling 278

Code and Fix 278

Waterfall Model 278

The Incremental Model 280

The Spiral Model 281

Time boxing 281

Agile Software Development 283

Other models 285

Concept Exploration 286

Requirements 287

Project Initiation 289

Project Estimation 289

Design 298

Process oriented modelling 298

Data oriented modelling 299

Object Oriented Modelling 302

Implementation 306

Programming languages 306

Software reuse 313

Computer Aided Software Engineering (CASE) tools 314

Integrated Development Environments (IDEs) 315

Project Monitoring and Control 317

Gantt Charts 317

Project Evaluation and Review Technique/Critical Path Method (PERT/CPM) 318

Critical Chain Scheduling and Buffer management 320

Verification and Validation 323

White Box testing 323

Unit Testing 325

Black Box testing 325

Integration Testing 326

System Testing 326

Regression testing 326

Alpha and Beta Testing 327

Automated testing 327

Test Plan 327

Test Results 328

Software Quality Management 329

Capability Maturity Model (CMM) 329

ISO-9001 330

TickIT 331

Software Process Improvement and Capability dEtermination (SPICE) 331

Software Configuration Management 333

Documentation Development 335

Training 336

Installation 337

Maintenance 339

Typology 339

Problems associated with maintenance 339

Metrics 341

Application Mining 342

Retirement 343

Legal considerations 344

Intellectual Property 344

Best Practices 349

Aim for Conceptual Integrity 349

Design Twice, Code Once 350

Do not be afraid of risks 350

Do not re-invent the wheel 350

Expect the unexpected 351

Fit the methodology to the project, not the other way around 351

Have an Open Source strategy 352

Involve the users 352

Limit the size of the project teams 353

Manage the requirements 354

Not all developers are created equal 354

Organize the refactoring process 355

Rank project elements up front 355

Remember Brook’s Law 355

Separate concerns 356

Separate stable and unstable elements 356

Separate Transaction Processing and Analytical Processing 357

Take care of the installation process 357

Think Big, develop small 357

Use the right tool for the job 358

Online Resources 359

Further Reading 360

Organization 367

Introduction 368

Organization 368

Objects in the organizational model 369

Management 373

Mapping Managers to Organizational Units 373

Managerial activities and roles 373

Organizational Forms 376

Organizational subunits 376

Coordination mechanisms 377

Organizational Culture 381

Work Teams 382

Organizational Structures  384

Mechanistic and Organic Structures 384

Functional organization 384

Process-oriented organization 385

Product-oriented organization 385

Geographical organization 386

Mixed structures 387

Organization of projects 388

Organization of IT 392

Types of activities of an IT organization 392

Structure of the IT department 392

Centralization and decentralization of IT 393

IT Staffing 395

The CIO/IT manager 397

Links between IT and the rest of the organization 398

Best Practices 400

Act normal 400

Create high-performance teams 400

Eliminate redundant administration 400

Every department its own responsibility 401

Flat or tall? 401

Harmonize, don’t centralize 402

Integrate in the Organizational Culture 404

Know and use the informal organization 404

Participate in networks 404

Separate development and maintenance 405

Online Resources 406

Further Reading 407

Strategy and Business Alignment 411

Introduction 412

Business Strategy 413

Integration of business and IT 416

The Strategic Alignment Model 418

Functional Integration 419

Strategic Fit 421

Zachman's Framework 426

Business Continuity and Disaster Recovery 428

Contingency Planning Policy Statement 429

Business Impact Analysis (BIA) 430

Identify Preventive Controls 431

Develop Recovery Strategy 433

Develop an IT Contingency Plan 434

Plan testing, training, and exercises 435

Plan maintenance. 435

Best Practices 436

Apply the right procurement process 436

Build a balanced portfolio of IT projects 437

Create an “IT-friendly” environment 437

Concentrate on the core business 438

Do not confuse hypes with trends 438

Have a written policy concerning the use of IT in your organization 440

Know your Business 441

Protect Your Customers’ Privacy. 442

Reduce complexity 442

Select your suppliers carefully 443

Set up a knowledge management strategy 445

State the alignment with strategies and objectives 446

Support the internal communication processes 446

Online Resources 448

Further Reading 449

Beyond the Hype 451

The future and IT 452

Online Resources 455

Further Reading 456

Glossary 457

Online Glossaries 491

Index 493

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