Syllabus

Course Description

IT is pervasive in today's firms. For many firms IT is the single largest capital investment, often exceeding 50% of capital expenditure. IT is an important vehicle for firms to achieve their business goals and has enabled radically lower cost structures, new levels of customer service, new products, new markets and changed the nature of many jobs. No longer can all the IT decisions be delegated to the technical personnel of the firm. New skills are now demanded of all managers including dealing with IT issues with confidence and competence. Managers are required to make complex IT investment and capability decisions involving strategic, competitive, financial, and organizational choices.

This course covers what every senior manager needs to know about using IT to enable strategy and get more value from IT. In this course we take the strategic perspective of the general manager and study how leading firms get more value from their IT investments. The course focuses on the strategic impact and business value that can be achieved rather than the details of the technology. Issues around governance will pervade the course. An IT background is not required and this is not a 'technical' course.

In recent years there have been spectacular failures of large information technology (IT) investments — major enterprise resource planning (ERP) systems initiatives that were never completed, e-business initiatives that were ill-conceived or poorly executed, and new systems developed that were never conceived or used effectively. In contrast, some firms use IT more effectively and get above industry average returns from their IT investments year after year. These successful firms not only make better IT decisions, they also implement better. These firms have better IT governance — they identified who should make the key IT decisions and how they should be accountable more effectively than their competitors.

This is an integrative course including issues of business strategy, finance and the study of organizations and people also covered in other parts of the MBA. The creation of business value requires the successful integration of these issues with the potential of IT. The course draws heavily on the research at the MIT Sloan Center for Information Systems Research and uses Sloan-developed case studies.

The course will commence by exploring a firm's different management objectives for investing in IT and introduce the concepts of IT Governance and the IT portfolio. Like any other investment portfolio the IT portfolio must be aligned with strategic objectives and balanced for risk versus return.

After this introductory material two major topics will be addressed: Business Operating Models and Ensuring Business Value.

The focus of the first part of the course is to understand how IT enables four fundamental business operating models. This part commences by introducing the concept of business operating models and the role of IT. The implementation of these models are studied via a series of case studies including UPS, Merrill Lynch, 7-Eleven Japan, and Manheim as they strive for the optimal combination of online and physical business models.

Then we will move to the pragmatic issues of ensuring business value covering topics including: IT governance, the IT investment decision, providing the IT infrastructure and architecture, IT outsourcing, and the role of the Chief Information Officer (CIO).

We will explore these issues via lectures, case studies, and seminar sessions where groups will present short sessions on topics and generate class discussion. Assessment will be based on a group presentation and report and contribution to class learning.

The course aims to provide:

  • A practical understanding of the strategic opportunities to create business value from IT
  • A practical understanding of the way business value is created and the potential barriers
  • A series of frameworks to help understand how to generate business value from IT
  • A set of case studies of how business value was or was not generated
  • A forum to discuss the issues and learn from each other in a collegial way
  • An opportunity to apply the concepts in a project

Course Goals

Students should:

  • Be prepared, as general managers, to lead the firm in the appropriate use of information technology to achieve the enterprise's strategy.
  • Understand from a business perspective how to generate business value from IT investments.

Objectives

Students will:

  • Be able to perform strategic analysis to determine where information technology can provide business value.
  • Understand the concept of managing the information technology portfolio.
  • Be able to design and evaluate a firm's IT governance.
  • Be able to prepare an information technology investment proposal.
  • Understand why some firms are better able to convert their IT investments into business value.
  • Understand the strategic opportunities, viability, and threats of IT enabled business models.
  • Have gained insight into the way IT influences business strategy and changes the basis for competition.
  • Be able to contribute to the information technology planning process.
  • Be aware of the relationship between information technology and firm performance.
  • Be able to contribute to establishing the firm's IT architecture.
  • Understand the risks and benefits from outsourcing.

Assessment

The assessment of the course will have the following components:


ASSIGNMENTS PERCENTAGES DUE DATES
Contribution to class learning 50%

Group presentation
(Presentation = 25%)
(Report = 25%)

50% Presentation date as per schedule. Please read the group project topics in the Projects section. By the day after Ses #6 you will need to email your top three choices for group projects (i.e., select to be in groups 1 thru 6) to the TA. We will make every effort to accommodate your choices. To provide group stability, students are required to commit to take (and not drop) the course by the end of the second week of classes (i.e., one day after Ses #4) as is consistent with the Sloan Professional Standards guidelines. All group reports are due one day after Ses #22.

Contribution to Class Learning

As an integrative course, with case studies and fieldwork, much of the learning is dependent on accessing the combined knowledge and experience of the group. It is everyone's job to keep the discussion productive and moving forward. In class discussions it is equally as important to talk about how to do something as what to do.

Contributions don't all have to be original flashes of insight — but they are very welcome! Class members who summarize, clarify, simplify, or suggest what else needs to be covered can also make a valuable contribution. If you are shy about contributing, prepare well and speak longer when you have the floor. If you are confident about speaking in public, focus on increasing the quality-to-airtime ratio of your contributions. Take some risks, but only after you have done the analysis and assessed the evidence.

In evaluating your contribution to class learning the following are important (adapted from McQueen). Positive characteristics are:

  • Professional and ethical behavior at all times
  • Useful ideas, coherently and succinctly expressed
  • Good analysis supported by case facts or experience
  • Relevance to previous contributions i.e., ability to listen
  • Constructive disagreement
  • Regard, respect and acknowledgment of other's contributions
  • "Show and tell" contributions
  • Good questions after group presentations
  • Readiness to contribute on receiving a "cold call"

Negative contribution characteristics include:

  • Arriving late to class
  • Lack of involvement — silence, detachment or disinterest
  • Leading discussion into unrelated topics
  • Spending undue amount of time on minor points
  • Long, rambling comments
  • Being absent or unprepared

If you are concerned about your contribution to class learning please make an appointment to see the TA.

Group Presentation

The group presentation is a very important part of the class learning and excellent practice. A series of group tasks are provided in the Projects section. Please read the group tasks and submit your top three preferences. The group deliverable is a 20-minute presentation followed by 15 minutes of questions (35 minute total time limit). The slide set is due for grading three days after the presentation. No report is required.

Group assignments will be assessed for the following:

  • Conceptual understanding and insight
  • Clarity of argument and expression
  • Quality of investigation and basis for conclusions
  • Conclusions and/or recommendations
  • Persuasiveness and clarity of oral and written presentation
  • Effectiveness when answering questions
  • Contribution to class learning