Essay on "How Can Does Information Technology Help in Creating Business Value?"
Essay 4 pages (1299 words) Sources: 4
[EXCERPT] . . . .
Business ValueHow Information Technologies Can Create Business Value
The frameworks and strategies derived for managing information technology from a strategic standpoint, aligning its core strengths to organization needs can lead to greater business value. There is no guarantee however that this will occur, as the many maturation points and steps that British Petroleum (BP) took in its journey to creating a more lean, cost-effective and high performance IT organization points out. Throughout the analysis shown as part of the study Transformation of the IT function at British Petroleum (Cross, Earl, Sampler, 1997) the progression of the organization from an inflexible, rapidly eroding IT infrastructure in terms of performance to one that is highly focused on the needs of the business and actually takes ownership over results is shown. IT can certainly deliver significant value and serve as the catalyst of transformation of businesses at the system process and people level as the BI case study illustrates (Cross, Earl, Sampler, 1997). The case is quick to point out that this is no panacea however and shows that it took literally decades for BP to navigate through the many popular approaches to process re-engineering (Davenport, 1993), centralized vs. decentralized operations (Ball, 1995), and the reliance on the CIO to define an outsourcing strategy when in an era of extreme cost cutting the conglomerate thought that was the path out of the IT confusion they were experiencing (Earl, Feeny, 1995).
The Transformation of IT from Cost Center to Catalyst of Growth
BP senior management was attempting over the last three decades to revit
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At the beginning of their transformative journey, BP was burdened with a $360M IT budget, a headcount of 1,400 in IT alone with it and of itself remarkable, 170 applications and 20% desktop MIPS to Mainframe MIPS. This last statistic illustrates how highly dependent the company had become on rapidly aging mainframe and client/server technologies. The costs associated with just maintenance alone for 170 applications, the majority of them on mainframe systems, could conservatively be projected to be well over $40M a year alone. That's just maintenance fees to keep those applications current, not taking into account training of how to use them effectively. BP clearly had to get away from the very high costs of maintenance and more critically and urgently, solve the disconnect of IT spending to the strategic direction and operations of the company.
In 1989, BP had been in a classical IT organizational structure, with the CIO often defining how various mainframe systems would be used for complimenting strategic initiatives. As was the case during this era of mainframe and client/server-based computing, this process turned out to be exceptionally inefficient and often led to strategists only getting 40% of the information they needed if that (Earl, Feeny, 1995). With the centralized structure also fueling a budget of $360M in IT-related spending, BP began a program to align their strategic planning programs to their IT resources. The challenges of aligning IT to strategic planning is in making the data analysis, analytics, and entire report creating and maintenance process as seamless, agile and very quick as any business needs them to be (Kannabiran, Sundar, 2011). As the case analysis shows, BP failed during this phase of their analysis as their IT architecture and overlying infrastructure did not align well enough with its rapidly changing business objectives. This lack of congruity of infrastructure and reporting further slowed down data capture, analysis and reporting, making IT a bottleneck in moving forward on strategic initiatives over time. What… READ MORE
Quoted Instructions for "How Can Does Information Technology Help in Creating Business Value?" Assignment:
“The case for this module is about BP and its efforts to transform the organization through the IT function. It*****'s a complex case, but interesting in that the efforts at transformation always brings us back to the basic question of how an IT strategy can add to the bottom line. The following paper describes the efforts undertaken in that company during the 1990*****'s:
Cross, J., Earl, M. J. and Sampler, J. L. (1997) TRANSFORMATION OF THE IT FUNCTION AT BRITISH PETROLEUM, MIS Quarterly, December 1997 [available at TUI library]
It would also be useful to take a look at the following framework for looking at how information is used and value created:
Cost of Losing Information: A Framework for Information Management Planning. http://cdad.tuiu.edu/Presentation.aspx?course=684&term=93&presentation=588
As noted earlier, you should also consult material from the Background Readings or related other materials you find yourself (be sure to reference properly whatever specific sources you draw on). You may want to do some searching in the project management support websites (some linked in the Background Information).
When you*****'ve read through the articles and related material, scanned the websites, and thought about it carefully, please prepare a short (4-5 page) paper discussing the question:
*****"How can/does Information Technology help in creating business value?*****"
Provide examples from the BP case, from the suggested reading and also from your own research.
How to Reference "How Can Does Information Technology Help in Creating Business Value?" Essay in a Bibliography
“How Can Does Information Technology Help in Creating Business Value?.” A1-TermPaper.com, 2011, https://www.a1-termpaper.com/topics/essay/business-value-information-technologies/9476463. Accessed 28 Sep 2024.
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