Managing Information Technology. This report has identified that the three major components of risk management are risk assessment, risk mitigation and evaluation and assessment. After conducting an interview with our chosen organisations IT Man

Authors Avatar
University Degree Business and Administrative studies

Managing IT

An Organisational Focus on Risk Management

Table of Contents

7.        Appendix        

a.        Letter of Authorisation from the IT Manager        

b.        Full Interview Transcript        

  1. Executive Summary

This report has been written with the intent to analyse how our chosen organisation identifies, manages and ultimately minimises their IT risk.

Our chosen organisation was started nearly 31 years ago by an engineer and his wife, and was purchased by a new owner in 2009.  The organisation has been highly competitive in the IT distribution market segment but in the past 8 years has evolved and become an IT distributor of networking and connectivity products.  Its core business has been at the distribution level where it imports products under a licensed agreement for wholesale or distribution to resellers and/or system integrators.  Core business has not changed much under new ownership but it has now become critical to improve operational processes and IT systems, which are out dated and aged to the point of operating under inefficient and potentially risky conditions. There is an informal project plan in place to revamp the IT infrastructure and modernise a 30 year old operation into one that would be innovative in its approach.

This report has identified that the three major components of risk management are risk assessment, risk mitigation and evaluation and assessment.  After conducting an interview with our chosen organisation’s IT Manager we have determined the following four major areas of risk to the organisation; ERP, connectivity, security/privacy and workforce.

After analysis of the four major risk activities we recommend the following:  deploy a new CRM/ERP system on a new software/hardware platform, form an IT committee with the IT Manager as chairperson and a single representative from each department to discuss concerns and concepts, employ a junior engineer to engage in day-to-day tasks, the marketing team and IT should deploy the integration between social media and sales promotions to capture a larger audience,  lock down the administration privileges on laptops, and if this is not possible then at the very least encrypt the hardware, provide off site live and mirrored backups, and lastly implement a quoting tool for the resellers which includes their own logos, pricing margins and details.

  1. Introduction to Company

The organisation started nearly 31 years ago as a “Mom & Pop” company which was started by an engineer and his wife. They entered into a market made up of five major players (of which they were one) where one organisation was more dominant than the others.  The organisation was highly competitive in all areas of IT but specialised in networking products, while the other organisations were more generalised in the products they sold.  The business was initially involved with industrial discrete connectors and evolved over time into a technology distribution importer of specialised cabling and fibre optic products. The past 8 years has provided a new direction towards being an IT distributor of networking and connectivity products. Its core business was at the distribution level where it would import products under a licensed agreement and wholesale or distribute to resellers and/or system integrators. Having a loyal customer base of knowledgeable and capable business networks, the organisation would support and provide training and sales service to their clients and the reseller’s clients, being the ultimate end user of these products.

  • The products range included but is not limited to the following products;

  • Molex Premise Networks
  • ADC
  • Allied Telesis
  • Allot
  • Brocade
  • Sonicwall
  • Falconstor
  • Westermo
  • Motorola
  • Wieland
  • Teldor
  • SmartOptics
  • Sanyo
  • Lemo
  • Juniper
  • Netcomm
  • Ruckus Wireless

In late 2009 a new proprietor purchased the operations of the business and formed a new company. The core business has not changed too much under new ownership but has instead been refined and perfected. What was critical to the business was to improve operational processes and IT systems, which were out dated and aged to the point of operating under inefficient and potentially risky conditions. The new company has an informal project plan in place to revamp their IT infrastructure and modernise a 30 year old operation into one that would be innovative in its approach in the IT distribution market segment.

  1. Organisational Structure and IS Strategy

Organisational Structure

The organisational structure (see Figure 1 below) illustrates a horizontal organisation design within which the cross functional sales managers and CFO report directly to the Managing Director.  The cross functional sales management team is supported by four business development managers who focus on servicing the existing customers and expanding their customer base. The IT manager focuses on maintaining the IT system viability and achieves this through the use of contractors, if and when required.  The CFO manages the administrative customer service staff, however interacts with all managers in order to prepare financial reports for use throughout the organisation.

The new company has adopted this horizontal relationship approach to their organisational structure in order to compliment the manner in which they conduct their business, subsequently creating an environment that fosters collaboration when focusing on work processes required to meet the needs of their customers. (Kinicki & Kreitner, 2009)    

                                                                                                        Figure 1

IS Strategy

The new company have a minimal strategic approach to its operation in that they discuss what would provide them with a competitive advantage, but there is no report or minutes taken down as a plan.  At best, a “to do” list is created. Items of interest such as the following have been discussed early on and needs implementation;        

  • Providing a customisable ecommerce interface which is branded as the reseller’s own.  This provides a higher switching cost and effectively a lock in for these resellers (Lee, Lee & Feick, 2001).   Once resellers get used to an interface, it would be difficult for them to switch to a competitor’s. The interface would make life easier for resellers to quote to their customers using their own logos and company details, with margins already calculated.  It is an effective strategy to partner the reseller with the distributor.

Figure 2

  • Integrating the new ERP system with online social media to generate more leads and ultimately revenue.  This would be reaching out via RSS feeds, Twitter, Facebook, and Google Ad Words.  This would create leads to pass over to valued resellers, again to create a partnership.  This exposure to the wider internet would open up opportunities creating a long tail effect.   It provides an ability sell products that wouldn’t have had any exposure without this ecommerce site.

 Figure 3     (Chris Anderson)

  • Creating a new how-to training facility online which would be a form of advertising as well as training via YouTube.  This reduces technical human resource and makes use of IT as a 24/7 trainer.
  • With the new changes and upgrades of the ERP, a requirement of instant reporting on stocking, forecasting, sales performance, and financial performance would be required.  It is currently at the point of make, buy or lease.  This strategy is a move to stay up-to-date and removing the legacy risks of hardware replacement, as well as providing easier backups for recovery if needed.
  • As the company is within the IT industry, it would be logical to employ staff whom are IT savvy rather than just relationship-based.
  • When selecting upgrades to internal infrastructure, it has been quietly said that CSH will do business with those who would do business with them. This is standard operating practice.

There seems to be a situation within the organisation where time and resources are limited, and the IT Manager does not have a priority mandate to complete his “to do list” above all else.  This is no criticism on his time management, but rather because there is a lack of resources available at his disposal.  Similarly, these minor changes to reach out to the social media and create innovative training and selling interfaces are important strategies to gain a competitive advantage.  It is an ‘innovate or die’ situation when considering the new company’s competitors. This refers to Farrell’s virtuous cycle. It is with these innovations, a competitive advantage can be achieved.  It must be noted that the new company must do all it can to prevent these innovations from leaking out, and that the new company must always continue to innovate.

Join now!

 Figure 4         (Farrell, 2003)

  1. IT Risk Management

The process of risk management is an important component of an organisation which involves identifying and assessing risks, and steps taken to reduce the risks to an acceptable level.  Risk management needs to be treated as an essential management function of the organisation, rather than just a technical function managed by IT experts.  It also enables the organisation to accomplish their mission successfully by securing and accrediting the IT systems on the basis of documentation derived by performing the process of risk management. ...

This is a preview of the whole essay

Managing Information Technology. This report has identified that the three major components of risk management are risk assessment, risk mitigation and evaluation and assessment. After conducting an interview with our chosen organisations IT Man
Document Details
  • Word Count
    7225
  • Page Count
    21
  • Level
    University Degree
  • Subject
    Business and Administrative studies
Related Essays
Failures of risk management.
Failures of risk management.
Managing Informations-Wipro. Business Technology Services in Wipro helps customers realize high business value by incorporating information strategy, business collaboration, business integration and managing IT risk, across the value chain of the enterpri
Managing Informations-Wipro. Business Technology Services in Wipro helps cu...
Change Management and Environmental Risk Analyses of Procter & Gamble.
Change Management and Environmental Risk Analyses of Procter & Gamble.
Risk Management.
Risk Management.