Organizational culture and structure are rapidly developing in the modern world. Multinational companies as well as big corporations are already incorporating complex informational control within their company system. For this reason, it is proposed to have both the IS (Information Systems) and IT (Information Technology) departments, each of them fulfilling their roles within the company.
While companies are looking at security measures to prevent fraud and organizational problems that might affect the quality of products and services, the IS and IT departments are instruments to monitor the effectiveness of work in the whole company. These departments by meaning of their work can be compared to the treasury management which also helps foresee the problems prior to their appearance in the system of organization.
The paper examines the measurement of both departments’ effectiveness. The IS and IT departments are compared and contrasted, and the value of these departments is examined in detail. This helps discover the role that both of them are playing in the whole organizational system of the company.
Comparison Between IS and IT Departments
According to White (2001), the traditional functions of an IT department involve automating, informating and transformating. Therefore, IT department is usually responsible for the effectiveness of computer hardware and software within the company. However, due to the growing business needs, and together with the development of computer technology which makes it easier for a standard user to learn complex software systems, the role of IT department has also changed.
Igbaria and Shayo (2004) suggest that IT departments consider their functions truly unique. But not until IT function is compared to the IS function. Information Systems department is provided with a role of treasury management, as information systems are directly related to the accounting and financial data. This is where the departments function vary considerably. The goal of IT department is based on technology, while the goal of IS department is based on various forms of data systems.
Moreover, the organizational culture is a factor that helps seeing the difference between the two departments. While IT department cares less about customer service and aims at providing non-stop functioning of all technology systems within the company (and that is the reason it is so often outsourced), IS department is always and in-house function and directly considers the quality of customer service.
That is why, the metrics that is used to measure the effectiveness of IT department is to some extent different to the metrics that is used to measure the effectiveness of IS department. The economic value of IS department is understood and recognized, but the economic value of IT department needs to be considered in each case due to the variety of IT functions that can be included in the list of duties of an IT department.
Metrics that measure the effectiveness of IT and IS departments
The basic metrics that measures the effectiveness of and IT department is the fulfillment of plans. Most departments usually receive a list of duties which are based on overall organizational goals with a detailed list of plans for each of them. The percentage to which the plan is fulfilled is one of the basic characteristics of the effectiveness of an IT department within and organization. This metrics also exists for the IS department, but in this case it is much less valuable due to the specifics of IS function.
Hirschbichler (2009) also names the following management ratios that exist for the IT department: ‘human resources, budget, projects, service desk, application incidents, system downtimes and business key performance indicators (KPIs)’. The measurement of each of them is already a necessary tool for measuring the effectiveness of the whole department. By measuring human resources metrics one can investigate the ‘number of employees, fluctuation rate, overtime per employee and the days of external consultants used’. However, this metrics is definitely no enough without comparing it with the other types of metrics, e.g. system downtimes. When the company suffers from system downtime, it is necessary to see how many IT employees were involves, were they working overtime. From such a metrics, it is possible to run to the conclusion about the effectiveness of the whole department in general.
For the IS department, an interesting variable is the cross-variable relational analysis. When looking at the relational variables for both the IS and other company departments, it is possible to examine the overall climate between the IS and other department of the company which ‘has an impact on the decision to share the results of the IS evaluation with users’.
The overall decision-making process of the company is largely based on the effectiveness of the IT and IS department functions. That is why it is necessary to measure the basic metrics which value the efficiency of these departments. For IT department, there are multiple metrics which demonstrate the effectiveness of the department if analyzed all together. For IS department, the analysis of metrics is based on relational variables and company climate characteristics.