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226 Part Two Information Technology Infrastructure

infrastructure are fixed-cost purchases and licenses? How well does the infra-
structure scale? Scalability refers to the ability of a computer, product, or
system to expand to serve a large number of users without breaking down.
New applications, mergers and acquisitions, and changes in business volume
all impact computer workload and must be considered when planning hard-
ware capacity.
Firms using mobile computing and cloud computing platforms will require
new policies and procedures for managing these platforms. They will need
to inventory all of their mobile devices in business use and develop policies
and tools for tracking, updating, and securing them and for controlling the
data and applications that run on them. Firms using cloud computing and
SaaS will need to fashion new contractual arrangements with remote ven-
dors to make sure that the hardware and software for critical applications
are always available when needed and that they meet corporate standards
for information security. It is up to business management to determine
acceptable levels of computer response time and availability for the firm’s
mission-critical systems to maintain the level of business performance they
expect.

MANAGEMENT AND GOVERNANCE

A long-standing issue among information system managers and CEOs has
been the question of who will control and manage the firm’s IT infrastruc-
ture. Chapter 2 introduced the concept of IT governance and described some
issues it addresses. Other important questions about IT governance are: Should
departments and divisions have the responsibility of making their own infor-
mation technology decisions or should IT infrastructure be centrally controlled
and managed? What is the relationship between central information systems
management and business unit information systems management? How will
infrastructure costs be allocated among business units? Each organization will
need to arrive at answers based on its own needs.

MAKING WISE INFRASTRUCTURE INVESTMENTS

IT infrastructure is a major investment for the firm. If too much is spent on
infrastructure, it lies idle and constitutes a drag on the firm’s financial perfor-
mance. If too little is spent, important business services cannot be delivered
and the firm’s competitors (who spent just the right amount) will outperform
the under-investing firm. How much should the firm spend on infrastructure?
This question is not easy to answer.
A related question is whether a firm should purchase and maintain its own
IT infrastructure components or rent them from external suppliers, including
those offering cloud services. The decision either to purchase your own IT
assets or rent them from external providers is typically called the rent-versus-
buy decision.
Cloud computing may be a low-cost way to increase scalability and flexibil-
ity, but firms should evaluate this option carefully in light of security require-
ments and impact on business processes and workflows. In some instances,
the cost of renting software adds up to more than purchasing and maintaining
an application in-house. Yet there may be benefits to using cloud services, if
this allows the company to focus on core business issues instead of technology
challenges.

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