Generating business value from information technology

Lectures: 2 sessions / week, 1.5 hours / session

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, and new markets. No longer can all the IT decisions be delegated to the IT professionals 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 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 via digitization of business processes. The course focuses on the strategic impact and business value that can be achieved rather than the details of the technology. Issues around governance and accountability 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 that were never 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 implement their decisions better.

This is an integrative course including issues of business strategy, finance and the study of organizations and people 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 primarily Sloan developed case studies.

The focus of the first part of the course is to understand how IT enables four fundamental business operating models. The implementation of these models are studied via a series of case studies including UPS, Merrill Lynch, 7-Eleven Japan, and Pacific Life as they strive for the optimal combination of business process integration and standardization.

Then we will move to the pragmatic issues of ensuring business value covering topics including: IT decision making and governance, business architecture and change management, IT and business risk, and IT-driven business agility and innovation.

We will explore these issues via lectures/discussions, case studies, guest speakers, group debates, and group presentations. Assessment will be based on contribution to class learning, group presentations, and a final report.

The course aims to provide:

Students should:

Students will:

The schedule below contains the details of the course. This course has two main methods of learning, summarized as:

There are a few lecture/discussion sessions on the concepts. The other sessions are detailed case studies that require preparation and discussion in class.

Each group of 3-5 students will prepare three presentations: (1) a justification for one side of a debate on a case study, (2) a recommendation for Colway Stores on its IT investment, (3) a project presentation. These three presentations will give you practice articulating the issues and making management presentations to simplify complex topics.

To gain value from the cases it is important to come ready to discuss, argue, interpret, and give advice on the major issues. We will give everyone an opportunity to contribute to case discussions. To focus your reading and analysis a list of discussion questions for each case is provided.

When preparing case studies, I suggest three steps:

You are expected to have completed the additional readings for the class and to apply them, as appropriate to your case analysis.

Readings are of two types.

Optional text (this book summarizes the research base for this course—it is not required):

Ross, Jeanne, Peter Weill, and David Robertson. Enterprise Architecture as Strategy: Creating a Foundation for Business Execution. Boston, MA: Harvard Business School Press, 2006. ISBN: 9781591398394.

The assessment of the course will have the following components:

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.

Positive characteristics are:

Negative contribution characteristics include:

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

Students will form groups of 3-5 people. Each group's primary concern is a project at the end of the term that applies the concepts from the course to a particular organization's business needs. We will offer connections to companies who sponsor the MIT Sloan Center for Information Systems Research or you may choose a firm with whom you already have contacts. Groups should be chosen and communicated to us by Ses #4. A one-paragraph description of the project and the name of the company you'll be working with are due by Ses #7. We will distribute specific requirements of the project in class and on the class Web page.

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