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In order to identify the distinctive characteristics between Cases "A," "B" and "C" a comparative analysis was performed, as shown in Table 3.
IT ANALYSIS | CASE "A" | CASE "B" | CASE "C" |
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IT STRUCTURE | By systems | Client | Product line |
IT OPERATION | Decentralized | Centralized | Decentralized |
SYSTEM DEVELOPMENT | Centralized; Internal | Centralized; Internal | Centralized; Outsourcing |
REASONS FOR IT DECENTRALIZATION | Local Dispersion; Business Units; Wish for Control | Local Dispersion | Local Dispersion; Business Units; Wish for Control |
EFFICIENCY MODELS | No formal model | ISO 9000 | ISO 9000; CMM; PMI |
IT PROJECTS CONTROL | Ad hoc | Structured | Partially Structured |
In the 1990's, Case "A" had undergone changes in guidelines and the top management body. The new leadership starts a centralization process due to a cost reduction policy in management areas, with a dramatic reduction in the number of employees in the corporate IT area (from 200 employees in 1990 to 40 in 2000). The range of attributions of the IT teams of the business units was reduced to user support and follows patterns and priorities defined by corporate IT. The culture of the company favors internal development, but this behavior is slowly changing. The corporate IT does not have systematic approaches to plan and control costs and resource requirements, nor to evaluate applications performance.
Case "B," certified by ISO 9000, shows great concern about IT efficiency, especially in cost and quality aspects. IT flexibility is important, due to the dynamic aspect of the financial sector, with a very short life cycle for product development.
The steps of the adopted IT evaluation process are: internal discussion in each business unit; analysis by both IT and business units; analysis of the whole set of proposed IT applications; grouping similar application proposals; economic and financial analysis; analysis by the Steering Committee, and control of planned expenses. Economic and financial evaluation of the projects is based on time and investment estimates. Project benefits are estimated in terms of the reduction of the work force and other operational expenses, and also in quality improvement expectations.
Case "C" presents a decentralization culture, with business unit autonomy, both in global and local operations. However, some functions were centralized, like human resources, financial and IT. This corporate IT area represents a trade off between efficiency and effectiveness approaches. There are IT teams for each business unit, but subordinated to a global centralized area. So, this structure demands management of conflicts among global and local interests.
Due to this corporate IT area, the company is standardizing IT applications, especially through the implementation of one ERP system throughout all the company. This process faces resistances and the IT area is one of its main drivers. Some specific applications are supplied by outsourcing.
Each business unit defines its specific set of Critical Success Factors - CSF (Rockart, 1979) that must be aligned with corporate CSF, they are: quality emphasis, excelling in performance and technical assistance. These CSF show the vision of IT as an enabler of efficiency improvement. This company implemented ISO 9000 in the manufacturing area, but activities related to IT had very few processes. For this reason, the IT area implemented CMM (level 2) in order to achieve efficiency and quality.
IT effectiveness evaluation, although not systematic, is done by cost vs. benefits analysis, payback and through comparison with strategic goals. Priorities are discussed twice a month in meetings among business unit and the respective IT team.
However, efficiency process are not in the same level, since it is possible to find important differences in costs, times and quality management in IT projects according to two other models, PMBOK (PMI,2000) and PMMM (Kerzner, 2001).
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