Lecture 2The Top IS Job

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Learning Objectives

• Introduction• Where is the IS organization headed?• The CIO’s responsibilities• The Office of the CIO• CIO’s roles in 3 eras

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Introduction

• Growing demand for IT managers in the U.S. and worldwide.

• Management of IT in past 50 years has drastically changed.– Basic functioning cost reduction decision

support inter-organizational supply-chain and “business eco-system”

• Onus on top executives to provide IT vision and leadership.

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Where is the IS organization headed?

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Escalating Benefits of IT

• Changing technology and evolving IS role since 1950s.

• “Waves of Innovation”:– Wave 1: Reducing costs

• When use of IT focused on increasing the productivity of individuals and business areas. The goal was to achieve clerical and administrative savings by automating manual processes

– Wave 2: Leveraging investments (continuous improvement)• Concentrate on making more cost effective us of corporate assets to

increase profitability

– Wave 3: Enhancing products and services• Using IT to produce revenue by gaining strategic advantage or by

creating entire new business. IT was used to improve marketing, distribution and customer service

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Escalating Benefits of IT

• Changing technology and evolving IS role since 1950s. (a parallel process)

• “Waves of Innovation”:– Wave 4: Enhancing executive decision-making

• Focused on changing the fundamental structure of the organization as well as creating real-time business management systems

– Wave 5: Reaching the consumer• IT is used to communicate directly with consumers, leading to new

marketing, distribution, and service strategies

– Wave 6 (new): leveraging partnerships through supply chain management or other forms of collaboration

• Interoperability ability of IT to allow firms to share information and business process

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Escalating Benefits of IT (cont’d)

• Waves of Innovation

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Traditional Functions are Being Nibbled Away

• Traditional set of responsibilities for IS– Managing operations of data centers, local

and remote systems and networks– Managing corporate data and legacy systems– Performing system analysis and design and

constructing new systems– Planning and integration of systems– Identifying opportunities for new systems

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Traditional Functions are Being Nibbled Away cont’d

• Trends that are moving traditional roles out of IS:– Distributed Systems

• Migration of software applications to user areas

– Ever more knowledgable users– Better application packages

• Systems development to integration

– Outsourcing• Based on fiscal and managerial considerations

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New Roles are Emerging

• IS involves a cluster of functions:– Run operations

• Running computers and networks– Develop systems

• Developing and maintaining systems, designing new systems, and updating existing ones

– Develop architecture• Setting as strategy and maintaining an architecture for both

IT and information, providing framework or standard for systems operations

– Identify business requirements• Helping articulate what the business needs from IT

– Help uncover innovative business strategies• Through enabling technologies

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New Roles are Emerging cont’d

• Different set of skills and management strategy needed for each function:

– Maximize efficiencies of it operations– Better allocation of it personnel time– Prioritize resources to demonstrate usefulness

of new software projects– It-enabled business innovations

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New Roles are Emerging cont’d

• Four Major IS Activities

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The CIO’s Responsibilities

• Top IS Jobs– 80s: Chief architect (strategic use of IT) – 90s: addressing business issues– Late 90s to early 2000s (forefront role)– Mid 2000s onwards: more responsibilities and

lots of justification

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CIO Roles in Three Eras

• Major IT Eras

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CIO Roles in Three Eras

• The Mainframe Era– Predominated 1960s – early ’80s– Role of DP / IS manager = operational manager of a

specialist function• Distributed Era

– In the ’80s as PCs become commonplace– LANs and WANs linking computers– Took on 4 more roles:

• Organizational designer• Technology advisor• Technology architect• External resources

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CIO Roles in Three Eras

• The Web Era– Started in the mid-1990s for some– Arose from the emergence of the Internet

(especially WWW) as a business tool– Era is still in “infancy” but add to the CIOs job,

the role of business visionary• Relationship between CEO and CIO

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CIO Roles Today

• Leading– Creating vision by understanding the business

• Governing– Establishing an IS governance structure

• Investing– Shaping the IT portfolio

• Managing– Establishing credibility, managing IT functions,

and fostering change

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Leading: Creating vision by understanding the business

• Understanding the business– Encourage project teams to study the

marketplace– Concentrate on lines of business– Sponsor weekly briefings– Attend industry meetings with line executives– Read industry publications– Hold informal listening sessions– Partner with a line executive

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Governing: Establishing an IS governance structure

• Definition: IS Governance– “The assignment of decision rights and the

accountability framework to encourage behavior in the use of IT.” (Weill & Woodham, 2002)

• Governance versus management– Governance is about deciding who makes

decisions.– Management is about making decisions once

decision rights have been assigned.

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Governing: Establishing an IS governance structure

• Importance of corporate IT governance– Large and diverse IT assets– Striking a balance between global and local

needs– IT portfolio (in sync with business needs)

• Assigning decision rights– Governance style

• Definition: who has a decision right and input right.

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Governing: Establishing an IS governance structure

• Six governance styles• A business monarchy is where C-level executives • An IT monarchy is where IT executives hold the right• Feudal is where business unit leaders (or their delegates) have the

decision or input rights• Federal means that the rights are shared by C-level executives and

one other tier of the business hierarchy, such as business unit presidents

• Duopoly is where one IT group and one business group share a right

• Anarchy is where individual process owners or end users hold a right. The anarchy governance style is rare in the five main IT decision areas because it is not effective in guiding IT in a large enterprise

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Managing: Establishing Credibility and Fostering Change

• CIOs must first establish credibility in IS before change can come about.

• Establishing Credibility– Deliver value-added, quality services– First impression matters

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Managing: Establishing Credibility and Fostering Change

• Fostering Change– Technical aspects– Emphasis on change management

• Changing the way people work, bringing it to the next level

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Managing: Establishing Credibility and Fostering Change

• Working across organizational lines– CIOs now find that systems they implement

affect people outside their firm boundaries• Arms-length to more cordial relationship with

partners (suppliers and customers)

– For example, CIOs to work more closely with suppliers’ executives to whom they outsource their help desk, data center, network management and other functions

– More joint planning and joint working

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The Office of the CIO

• Chief Information Officer (CIO)– Heads IS and works with op management,

customers, suppliers• Chief Technology Officer (CTO)

– IT planning, architecture, new technologies• Chief Operations Officer (COO)

– Daily IS operations• Chief Project Officer (CPO)

– Projects management

Q & A