Answers to What Would You Do Questions

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© 2016 Cengage Learning®. May not be scanned, copied, or duplicated, or posted to a publicly accessible website, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website or school-approved learning management system for classroom use.Chapter 1

Managers: Key to Information Technology

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Solutions to End of Chapter Material

Answers to What Would You Do Questions

• A new financial analyst at your firm has been tasked with performing a competitive

analysis of your firm’s IT spending versus your three top competitors. Over lunch with you and a couple of other recent hires, the coworker shares that her analysis shows your firm is spending just over 4 percent of revenue (recent annual revenue for the firm was $150 million) on IT while your company’s competitors are all spending less than 3 percent (recent revenue ranges from $300 million to $400 million). She asks the group if they think this spending difference is significant and if she should highlight it in her report. What would you say?

Students’ answers will vary. However, students may mention that organizations typically spend 1 to 6 percent of their total revenues on IT. This spending is generally higher for industries in which IT is more critical to success, such as health care and financial services.IT spending as a percentage of revenue is also typically higher within small organizations than large organizations.

Students may also mention that these numbers represent rough averages. IT-related spending varies greatly, even among similar-sized companies within the same industry.While one company may outspend a competitor on IT, it is not necessarily making more effective use of IT. The most important consideration is what organizations are getting out of their investments in IT, not how much they are investing in IT. The most effective users of IT maximize value from IT investments that are aligned with their organization’s strategic needs and that are well managed and executed. Managers must evaluate IT investment opportunities against existing business needs and help frame these opportunities so others can understand them. Managers must provide the leadership to recognize and advocate for those opportunities that fit with the organization’s business strategy.

• Imagine instead that the new Avon order management system was well designed and

extremely easy to use. Identify key actions that the Avon management team must take to (Information Technology for Managers, 2e George Reynolds) (Solution Manual all Chapters) 1 / 4

Information Technology For Managers 1-2

© 2016 Cengage Learning®. May not be scanned, copied, or duplicated, or posted to a publicly accessible website, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website or school-approved learning management system for classroom use.ensure a successful rollout of an easy-to-use system for the Canadian sales reps.

Students’ answers will vary. Students may mention that to implement an IT system successfully, Avon might need to change its business processes, worker roles and responsibilities, reward systems, and decision making. Many organizations have tried to implement a promising new IT system, only to have employees never use it or not use the system to its full potential. Managers must be able to overcome this resistance so that the new IT system is accepted and used throughout the organization. Several theories on organizational change management can help smooth the introduction and adoption of IT.Three such theories are: the Change Management Continuum Model, the Unified Theory of Acceptance and Use of Technology, and the Diffusion of Innovation Theory.

• The board of directors at City Hospital is determined not to be fined for violation of

HIPAA rules. They asked your consulting group to prepare a comprehensive strategy to communicate to employees and contractors the importance of following HIPAA regulations. Brainstorm the key elements of your communications strategy. What actions might you request of the board of directors and other executives at the hospital to strengthen your strategy?

Students’ answers will vary. However, students may mention that the introduction of an enterprise IT system requires large amounts of resources and significant changes in procedures, roles and responsibilities, reward systems, and decision making. In other words, it represents a major organizational change. Managers should have their work cut out to gain acceptance of all these changes. To strengthen the communications strategy, the board of directors and other executives should impose standards and procedures that spell out exactly how transactions must be conducted and how the supporting information must be captured, stored, and shared. Senior management may sometimes encourage adoption of enterprise IT by threatening penalties for nonconformance.

• You are the new office manager for a small accounting firm of 12 people. You just received

a complaint of an employee viewing pornography while at work. Not only is the employee wasting company time but he is also creating a potential liability for a sexual harassment lawsuit if the practice is allowed to continue. What action would you take to handle this situation?

Students’ answers will vary. The office manager should ensure that there is no inappropriate use of IT resources such that it reduces employees’ productivity. Employees should not waste time visiting Web sites unrelated to their work. Additionally, inappropriate use of IT resources to view sexually explicit material could subject the firm to a sexual harassment lawsuit. Failure to ensure that IT risks are mitigated can lead to serious problems, such as business disruptions, data breaches exposing employee and/or 2 / 4

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Answers to Discussion Questions

• Reflecting on what you read in this chapter and looking forward to a successful course,

identify three learning objectives you want to meet this term.

Students’ answers will vary. The response will be different for every student.

• Identify and briefly discuss an example of an enterprise or interorganizational system with

which you have recently interacted.

Students’ answers will vary. They might describe a system from their personal experience.

• Based on your own experience and reading, identify and briefly discuss an example of an

organization that has invested greatly in IT and yet has relatively little to show as a result.Identify and briefly discuss an organization where the opposite is true. To what do you attribute the difference?

Students’ answers will vary. However, students may mention that while one company may outspend a competitor on IT, it is not necessarily making more effective use of IT. The most important consideration is what organizations are getting out of their investments in IT, not how much they are investing in IT. The most effective users of IT maximize value from IT investments that are aligned with their organization’s strategic needs and that are well managed and executed. Managers must evaluate IT investment opportunities against existing business needs and help frame these opportunities so others can understand them.Managers must provide the leadership to recognize and advocate for those opportunities that fit with the organization’s business strategy.

• What percentage of revenue should an organization spend on IT? Explain the rationale for

your answer.

On average, organizations spend between 1% and 6% of their total revenue on IT. This can vary greatly depending on what opportunities and threats a given organization is facing.Spending also depends on how wise management is in spending its IT dollars effectively.

• What are the basic reasons that people resist change? How can this resistance be

overcome?

Four basic reasons that people resist change are: 3 / 4

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© 2016 Cengage Learning®. May not be scanned, copied, or duplicated, or posted to a publicly accessible website, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website or school-approved learning management system for classroom use.• Parochial self-interest—some people are more concerned with the impact of the change on themselves than with how it might improve the organization.• Misunderstanding—some people have misconceptions or lack information about the change.• Low tolerance to change—some people require security and stability in their work.• Different assessments of the situation—some people disagree about the reasons for the change or do not support the change process.

One approach to help overcome resistance to change is to take people through the three phases (inform, educate, and commit) and seven stages (contact, awareness, understanding, positive perception, adoption, institutionalization, and internalization) of the change management continuum model.

• What is meant by management expectations, and how can they affect the acceptance of

new IT?

Management expectations is the degree of belief that management wants employees to use the system. Management expects everyone to use the new technology and to behave in a manner consistent with the new work processes. Management must communicate their expectations, measure progress toward meeting those expectations, and provide feedback to end users regarding their use of the new information system and work process.

• Develop a timeline that identifies the approximate times at which the various stages of the

Change Management Continuum Model should occur for the implementation of a major enterprise system. Assume that the project will last 18 months and has these key

milestones:

• Systems definition complete at 3 months • System design complete at 7 months • System construction complete at 12 months • System testing complete at 16 months • System cutover starts at 18 months

The approximate times at which the various stages of the Change Management Continuum Model should occur for the implementation of a major enterprise system are as follows: • Contact at 0 month • Awareness at 3 months • Understanding at 7 months • Positive perception at 12 months • Adoption at 16 months • Institutionalization at 18 months

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