Is Your CIO Adding Value
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Whether a company sees its IS department as an asset or a liability is largely down to the CIO's ability to add value Many organizations are experiencing a crisis of confidence in their information systems and in the chief information officers who lead them. General managers are tired of being told that information technology can create competitive advantage and enable business transformation. What they observe and experience are IS project failures, unrelenting hype about IT, and rising information processing costs. Chief executive officers often do not know how to evaluate the performance of the IS function or the contribution of the CIO. Consequently, radical IS management prescriptions, such as outsourcing and downsizing, are being applied, and CIOs are even being fired.(1) Some of them are the very heroes of the IT profession whose photographs graced the covers of business magazines not long ago. For several years, we have been researching IS leaders, conducting extensive interviews with CEOs and CIOs.(2) One study examined the factors that determined the relationships between CEOs and CIOs in fourteen organizations.(3) A second focused on the survival of CIOs, and studied ten matched pairs of surviving and nonsurviving CIOs in different industries.(4) In a third, ten CIOs who had been interviewed in a 1986 study were revisited in order to understand their experience and learning over a five-year period.(5) All of these studies involved CIOs in leading corporations across the spectrum of industries. Face-to-face interviews with CIOs and CEOs explored not only their actions and experiences, but also their personal backgrounds, attitudes, and values, and the organizational contexts in which they operated. We supplemented the CIO interviews by administering psychometric tests. These and other studies gave us data on IS leadership in more than sixty organizations. A problem or a strength? From this data, two patterns stand out. First, CEOs appear to be polarized between those who see IT as a strategic resource, and those who see it merely as a cost. Second, the CIO's role and actions are crucial in ensuring that IT is deployed for strategic advantage, and that the IS function delivers value. The CIO can and must add value, or IS will be seen as a problem, instead of recognized as a strength. In the following three companies, drawn from our research, IS was seen as a problem: In a telecommunications company, the CEO revealed that only one thing kept him awake at night: he was never sure whether his CIO was doing a good job. He knew that IT mattered in his industry, and he found the IT strategy seductive, but delivery and benefits were elusive. The strategy centered on building a new state-of-the-art IT infrastructure that would, it was claimed, provide an efficient and flexible platform to meet both current and future business needs. The CIO had spent his career in the IT industry and was an avid scanner of emerging technologies. Although the CEO was attracted by the promise of longer-term IS capability, he wanted adequate applications quickly to support a rapidly growing business. After wrestling with this dilemma for some time, he fired the CIO. Soon afterward, a successor CEO strongly reinforced the emphasis on rapid support for immediate needs and ensured that most of the IS policies of the past were now formally abandoned. In a chemical company, the CIO believed fervently that IT could yield competitive advantage across the business, and he regularly created occasions to promulgate his message to the company's management teams. Given his previous background as a general manager, the CIO's beliefs were based more on a sense of business opportunities than on long familiarity with IT. He was initially appointed and backed by a CEO who was himself a well-known visionary on the transformational capabilities of IT. The CIO led investment in a corporate-wide infrastructure well before many of the business units had adopted and owned such a vision. …Keywords:
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:Today's firms are faced with new competitive and technological challenges. As a consequence, many senior executives are looking for information technology (IT) leaders who not only can understand technology but also can comprehend technology's potential to affect business strategy. For the IT leaders, rising to such numerous, and often conflicting, challenges is not easy. Indeed, there is a higher than average corporate dismissal rate and shorter tenure for IT leaders compared with other top executives. Based on the responses from 213 IT leaders in the financial services industry, this study found that the rank and role of a firm's IT leader must be aligned with the firm's competitive strategy. The implications of the findings for the firms' executives, as well as researchers, are discussed in detail.
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It is widely argued that the information systems (IS) leadership function has undergone fundamental changes over the past decade. TO better understand the changes, this study compares the backgrounds, responsibilities, reporting relationships, and power of newly appointed IS executives (who had been in their position for two years or less) with established IS executives (who had been in their position for five years or more). The study found that approximately half of the new IS executives were external hires, whereas almost all of the established IS executives were promoted from within the company. More than two-thirds of the new IS executives had more than five years' experience managing a non-IS function within the past 15 years. Established IS executives had spent the majority of their career within the IS function. The activities receiving the most attention from new IS executives were information technology (IT) strategic planning and control, IT architecture management and standards development, and human resource management. For established IS executives, the activities receiving the most attention were IT architecture management and standards development, human resource management, and operations. An increasing number of new IS executives reported directly to the CEO, and almost half were members of the senior management/strategic policy committee. These findings have several important implications. First, the senior IS executive must be able to bring a broader business perspective to the position. Current senior IS executives who have not broadened their own knowledge, skills, and experiences in business strategy, management, and operations should immediately develop a personal career development program to gain these valuable perspectives. Second, senior IS executives should implement career development strategies within their own organizations that ensure that IS professionals have the opportunity to acquire the business management experience necessary to advance to higher IS management levels. Third, graduate and executive programs designed to prepare future IS managers and leaders must provide both a business and IT perspective throughout the curriculum.
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The establishment of strong alignment between information technology (IT) and organizational objectives has consistently been reported as one of the key concerns of information systems managers. This paper presents findings from a study which investigated the influence of several factors on the social dimension of alignment within 10 business units in the Canadian life insurance industry. The social dimension of alignment refers 'Lynda M. Applegate was the accepting senior editor for this paper. to the state in which business and IT executives understand and are committed to the business and IT mission, objectives, and plans. The research model included four factors that would potentially influence alignment: (1) shared domain knowledge between business and IT executives, (2) IT implementation success, (3) communication between business and IT executives, and (4) connections between business and IT planning processes. The outcome, alignment, was operationalized in two ways: the degree of mutual understanding of current objectives (shortterm alignment) and the congruence of IT vision (long-term alignment) between business and IT executives. A total of 57 semi-structured interviews were held with 45 informants. Written business and IT strategic plans, minutes from IT steering committee meetings, and other strategy documents were collected and analyzed from each of the 10 business units. All four factors in the model (shared domain knowledge, IT implementation success, communication between business and IT executives, and connections between business and IT planning) were found to influence short-term alignment. Only shared domain knowledge was found to influence long-term alignment A new factor, strategic business plans, was found to influence both short and long-term alignment. MIS Quarterly Vol. 24 No. 1, pp. 81-113/March 2000 81 I~~~~~fl This content downloaded from 207.46.13.115 on Sat, 08 Oct 2016 04:53:48 UTC All use subject to http://about.jstor.org/terms Reich & Benbasat/Alignment Between Business and IT Objectives The findings suggest that both practitioners and researchers should direct significant effort toward understanding shared domain knowledge, the factor which had the strongest influence on the alignment between IT and business executives. There is also a call for further research into the creation of an IT vision.
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IT assimilation is regarded as an important outcome in the efforts of firms to leverage the potential of information technologies in their business activities and strategies. Despite significant investments in information technology, considerable diversity exists in how well firms have been able to assimilate IT and leverage the business value of IT. This research draws upon the emerging knowledge-based and resource-based views of the firm to examine the influence of three factors on IT assimilation: (i) quality of senior leadership, (ii) sophistication of IT infrastructures, and (iii) organizational size. Drawing upon a large-scale sample survey where responses were obtained from CIOs and senior business executives who were members of the firms' top management teams, the study examines a variety of mostly normative prescriptions. The findings provide robust evidence about the impacts of CIOs' business and IT knowledge on IT assimilation. Further, we find that CIOs' membership in top management teams and their informal interactions with TMT members enhance their knowledge, particularly their business knowledge. We find that the intensity of the relationship between CIO's interactions with the top management team and their level of IT and business knowledge is much stronger in firms that articulate a transformational IT vision. The sophistication of IT infrastructures was also found to significantly impact IT assimilation. Surprisingly, the IT knowledge of senior business executives was not found to be a significant influence on IT assimilation. The implications of these findings for evolving a deeper understanding of the dynamics underlying IT assimilation are presented.
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The need for top management involvement in the exploitation of information technology (IT) is a recurring theme of information management. Previous research has suggested that this involvement is linked, with a two-way relationship between CEO and CIO. This paper reports on a n exploratory research study that set out to identify the determinants of a successful two-way relationship. CEOs and CIOs were interviewed in-depth in 14 large organizations based in the United Kingdom. This paper describes an explanatory framework that links the quality of the CEO/CIO relationship to identified attributes of each of the parties, and of their host organization. Successful relationships seem to be linked to a shared vision of the role of IT as an agent of transformation. The CIOs in these successful relationships may have extensive IT backgrounds, but they are accepted into the top management team and are seen to contribute beyond their functional responsibilities.
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Executive support is often prescribed as critical for fully tapping the benefits of information technology (IT). However, few investigations have attempted to determine what type of executive support is likely or organizationally appropriate. This article puts forward alternative models of executive support. The models are tested by examining chief executive officers' behaviors in and perceptions of IT activities. CEOs and information systems executives are surveyed and further data collected from industry handbooks and from chairmen's annual letters to shareholders. The results suggest that executive involvement (a psychological state) is more strongly associated with the firm's progressive use of IT than executive participation (actual behaviors) in IT activities. Executive involvement is influenced by a CEO's participation, prevailing organizational conditions, and the executive's functional background. CEO's perceptions about the importance of IT in their firms were generally positive, although they participated in IT activities rather infrequently.
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How should the effectiveness of Chief Information Officers (CIOs) in organizations be assessed? What are the primary antecedents of their role effectiveness, particularly as assessed by their top management teams (TMTs)? Despite a wealth of normative and prescriptive writings about what roles CIOs should play in contemporary firms, there has been limited empirical research on the above two questions. This study addresses the above questions, particularly with respect to the effectiveness of the CIOs in the healthcare sector. Based on survey data from CIOs and members of the TMTs, we find that there are six salient CIO roles: business strategist, integrator, relationship architect, utility provider, information steward, and educator. Further, CIO capabilities, in the form of business and strategic information technology knowledge, political savvy, and interpersonal communication makes CIOs effective, particularly in the roles of business strategist, integrator, and relationship architect. High levels of engagements between the CIOs and TMTs do not directly impact CIO's role effectiveness, but are mediated by the effects of CIO capabilities. These findings have significant implications for researchers and senior information systems (IS) executives.
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The resource-based view of the firm attributes superior financial performance to organizational resources and capabilities. This paper develops the concept of IT as an organizational capability and empirically examines the association between IT capability and firm performance. Firm specific IT resources are classified as IT infrastructure, human IT resources, and IT-enabled intangibles. A matched-sample comparison group methodology and publicly available ratings are used to assess IT capability and firm performance. Results indicate that firms with high IT capability tend to outperform a control sample of firms on a variety of profit and cost-based performance measures.
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In order to develop and bring to fruition strategic information systems (SIS) projects, chief information officers (CIOs) must be able to effectively influence their peers. This research examines the relationship between CIO influence behaviors and the successfulness of influence outcomes, utilizing a revised model initially developed by Yukl (1994). Focused interviews were first conducted with CIOs and their peers to gain insights into the phenomenon. A survey instrument was then developed and distributed to a sample of CIO and peer executive pairs to gather data with which to test a research model. A total of 69 pairs of surveys were eventually used for data analysis. The research model was found to be generally meaningful in the CIO-top management context. Furthermore, the influence behaviors rational persuasion and personal appeal exhibited significant relationships with peer commitment, whereas exchange and pressure were significantly related to peer resistance. These results provide useful guidance to CIOs who wish to propose strategic information systems to peers.
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