MSIT3410‐01 Chapter 14


Chapter 14

Should acquisition of infrastructure replacement services be an arm’s-length transaction or a close partnership transaction?

A: For IVK, a close partnership transaction is more beneficial than an arms-length transaction. The chapter elaborates on prior ServoLith experience and it did not sound like a good fit for IVK at all. Basically, IVK wanted the best and went with ServoLith for that reason. This ambitious move put IVK in a bad spot because ServoLith had deprioritized IVK and problems arose from this partnership. IVK needs to deal with an appropriately sized service company who can prioritize IVK and generate results. IVK was working with a service company who was out of their league and although their intentions of seeking out the best were good intentions, the results were less than desirable thus a close partnership type of exchange would be more beneficial.

Which vendor, contract structure, and service delivery model should IVK choose?

A: VerxaWeb is the best choice here because they can offer top notch service. They would be a far better match for IVK because of the more responsive nature they would provide.

How important is “control” to a company like IVK when outsourcing IT? How should control be maintained?

A: Control when regarding outsourced work depends on the nature of business your company is involved with. For example, business with delicate information like banks and hospitals, need very tight control over the information that is accessed by outside consultants for security purposes of the company itself and for its customers. IVK does have this type of sensitive information and sensitive customer information. It will be imperative to set up strict boundaries with regards to this sensitive information.

Any sensitive information needed from IVK should be monitored by an IVK representative and some sort of insurance regarding appropriate handling of this information by a third party needs to be set up.

How should IVK hire to support contract management? Will very good technical employees be needed in a future characterized by high levels of IT outsourcing?

A: For the information security, it will only be logical to hire stronger IT support to ensure that the outsourcing IVK may need in the future will be done so safely for IVK and IVK’s customers. The insurance IVK will receive from assigning strong IT employees to these outsourcing companies will greatly benefit IVK. This will be a proactive approach to managing future business.

What does the future of a loan-based financial services business look like, completely reimagined around a much more partner-based, virtual, and globalized concept? Is IVK being ambitious enough?

A: Due to the rapid development of the Internet, people’s understanding and judgment of the world has changed, big data has changed, and computing power has improved. This has also transformed the traditional financial services industry into a new technology-centric financial system. Therefore, capable technology partners are very important for the transformation of the financial industry. Secondly, the issue of user privacy also needs to be taken seriously by the technology and financial industry. This requires strong management of the company. Finally, the development of information technology will also reduce the links between countries, which will promote the globalization of the financial industry.

For IVK, the company is making a lot of efforts to transform. They reorganized management and set up information management departments. They look for the right partners and hire skilled people. They also do a lot of work to drive business globalization. I think IVK is ambitious.

Chapter 15

What should Barton and Gordon do about the Ivan Korsky problem?

A: Barton and Gordon need to do all they can to secure Ivan, and not let him leave to work for Microsoft or the other recruiters who have shown interest. What they can do, is secure more resources to incentivize Ivan. They can increase his salary or give him more desirable responsibility.

How might IT managers best measure and compare the output of diverse employees? Do you think this measurement should impact the kind of “deal” (contract) that IVK makes with talented employees such as Korsky?

A: IT managers should measure their output based on the work of different employees. But more often IT managers can’t do special treatment for everyone, so some common applications are necessary for all non-Ivan employees. Ivan is an exception to the rule due to his talent level. His talent level generates a high level of impactful output, however, as pointed out in the chapter, he needs to complete his tasks on time. The deal made with Ivan is a unique one because of his talent level.

What other kinds of challenges are involved when acquiring, training, and managing IT talent?

A: Difference of skill set from one individual to another; Perspectives on moral,lifestyle and thinking process; Motivation and reaction to disagreements; Reduced output during training periods; Employee retention.

What kind of restructuring or “tuning” does an IT organization require over time? How should you decide whether to centralize talent in a shared organization or decentralize it into distributed groups?

A: Since the world of IT is so flexible and changes so frequently, the changes in organizational structure will be unique to the situation presented at that time. Therefore, it depends on the situation. If the company needs to develop a topic in a short time. I hope to bring talent together. This can make better use of talents in a short period of time. For some common projects, I hope to be able to distribute talent to various groups. This can drive the motivation and creativity of ordinary employees.

What might Barton learn from Cho’s explanation of how a jazz ensemble works?

A: Barton realized that much like a jazz ensemble, the players in an IT team are very similar. IT teams should be comprised of very technically talented players who not only know their roles but can handle solo work well and play well off of each other’s strengths. What Cho was summing up here, is that the best performers channel their strengths, talents and experience to handle individual roles well. They can effectively collaborate together to solve new problems. The same philosophy can be applied to IT teams to generate success.

Chapter 16

Can the IT trend toward ever-more maintenance be stemmed?

A: In order to free up more funding for innovation, Barton suggests examining the maintenance portion to identify redundancies and to increase efficiency. This efficiency increase would ultimately generate more funding for innovations spending.

What should be the ideal ratio of maintenance to new applications?

A: A 50/50 ratio would be far more ideal and should be abase line target for spending.

Is there a trade-off between standardization and flexibility? How are the two related in most companies?

A: A trade-off does exist between standardization and flexibility. Standardization and flexibility are both important in understanding and improving the processes. Standardization moves the needle toward a single method, process, and outcome. Flexibility provides for variation where the customer situation requests it and it make sense for the business. Both can differentiate a product in the marketplace, one more for price and consistency and the other more for distinctive customer requirements. In order to get to the best combination, it is best to see what is the same and what is different, and standardize where you can but keep distinctions where different processes and different approaches make sense for special customer requirements.

What should Barton do about Sales’ request to replace computers with mobile devices?

A: I don’t think Barton should agree with this request. Because IVK ’s infrastructure had not been originally designed for a world full of mobile devices and apps. If he wants to successfully transplant IVK to mobile phones, he needs to do a lot of work. This will cost more human resources and money. For mobile devices, information security is also a more important issue.

Chapter 17

How much emphasis should the IVK IT group put on top-line benefits from IT systems, as opposed to traditional cost savings benefits?

A:The IVK IT group should focus on both top-line and traditional cost savings. IVK can’t survive without revenue, and they can’t sustain without a solid understanding of their expenses. However, with the recent email from the CEO, IT should start to put more emphasis on top-line benefits. Also, as they collaborate with other departments on projects the IT group needs to help them understand how their actions impact both the top and bottom lines of the business.

What role should IT leaders such as the CIO play in discussions of the use of IT to enhance innovative capabilities? Why are IT leaders not as involved in these discussions as you might think they would be?

A: The CIO should have a important role in discussions of the use of IT to enhance innovative capabilities. For example, creating efficiencies in business processes, so departments can focus on creating incremental value for the organization. IT can also help departments innovate faster, which allowing for leaps in value creation and competitive advantage.

I think IT leaders are not as involved in discussions about innovation because organizations tend to focus on problem solving in specific areas and not creating a culture of innovation​.

What do you think of the kid’s toolkit approach to management? How could you apply his ideas?

A: The Kid’s toolkit approach was more of a lesson in stubbornness than anything else. The story hetold about the statues represents the tools management uses. The awarded two statues represent the chosen mental models that managers often cling to. In some situations these models work very well, but for other situations, forcing the model will only lead to disaster.

So, we have to be flexible and be willing to try new things andnot resort to just one way of solving a problem. Being fixated on one way of problem solving is totally inadequate for the contemporary work environment and that kind of thinking is dangerously outdated and ineffective.

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