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Chapter 18

Chapter 18. The Chief Information Officer’s Role. Introduction. Drucker said, “Effectiveness, in other words, is a habit; that is, a complex of practices. And practices can always be learned.”

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Chapter 18

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  1. Chapter 18 The Chief Information Officer’s Role

  2. Introduction • Drucker said, “Effectiveness, in other words, is a habit; that is, a complex of practices. And practices can always be learned.” • Superior managers are made, not born, and superb management skills are learned and developed, not the result of genetics • Management is a skill, the result of learning

  3. Challenges Facing Senior IT Executives • To a considerable extent, both the CIO’s position and the perception of its incumbent are shaped by this individual’s behavior patterns in the firm • The tasks typically required of the CIO are hazardous to one’s career • CIOs have failed due to performance deficiencies, others were caught in organizational consolidations, cost reductions, or bad times for the industry or firm

  4. The Chief Information Officer • The number of firms that have a chief information officer has increased greatly in the past 10 years • Information technology staffers are still viewed in some companies with skepticism • “The CIO position is a relationship, not a job. If the CIO/top management team relationship is effective, the title doesn’t matter. If it is ineffective, the title doesn’t matter.”

  5. CIO’s Organizational Position • Just as chief financial officers are held responsible for their firm’s expenditures even though they may not spend most of the money, a firm’s chief information officer is responsible for the firm’s IT usage even if the IT line organization does not consume most of the IT resources • CIOs are responsible for managing the firm’s corporate IT function and its information infrastructure

  6. CIO’s Organizational Position • CIOs make technology investments and recommend or approve IT investments elsewhere in the firm • Develop and implement IT strategies to increase the firm’s revenue and profits • Set standards for information or telecommunication operations in the firm • Recommend and enforce corporate policy on IT matters including procurement, security, data management, personnel, and cost accounting

  7. CIO’s Performance Measures • The performance of CIOs is measured by their success in applying information technology cost effectively, achieving corporate goals and objectives, and bringing value to the firm • Organizations expect CIOs to identify technological and business opportunities and to provide leadership in capitalizing on these opportunities for the firm’s advantage

  8. Challenges Within the Organization • Organizational changes and new business methods heavily impact IT executives • They must use current information systems innovatively and adopt new computing and telecommunication systems and products to facilitate organizational transitions and deal with competitive threats • IT organizations must promote and support cost-effective technological innovations

  9. The Chief Technology Officer • CTO’s position is that of evaluating technology futures and advising the firm on technology selection • CIO is responsible for business aspects of IT • CTO oversees technology aspects

  10. The Chief Information Officer’s Role • Formulating and obtaining approval of new IT policies • Approve IT strategies • Approve IT resource allocation • Establish IT cost-accounting methods • Develop policy instructions for IT procurement • Oversee outsourcing contracts • Ensure quality IT hiring and training policies • Establish standards for data security, disaster recovery, and IT business controls

  11. Developing IT Management Maturity • Ensure that IT and business strategies and plans are tightly coupled and approved by the senior management team • CIOs must ensure the financial integrity of business investments in systems and technology • Create cost-effective IT operations

  12. Evaluating Technology Futures • CIOs are responsible for providing technological leadership in information processing. • Executives depend on CIOs to forecast technology trends and assess significance • Although difficult and risky, technology forecasting and evaluation is critical • Extrapolating present use has limited utility

  13. Important Business and IT Trends • IT services • The movement toward outsourcing • Web hosting, application hosting, network operation and management outsourcing • Technologies supporting data transfer and personal interactions

  14. Finding Better Ways of Doing Business • CIOs must constantly seek ways to improve the organization’s performance and create or sustain business advantage • Using cost-effective hardware • Adopting alternative application acquisition methods • Using disciplined processes to manage production operations and networks • Outsourcing all or part of IT operations

  15. Introducing New Technology • Installing new technology involves critical people considerations. • Proponents of a new system must “sell” their ideas to other individuals in the firm, such as operators, users, and maintainers • Even good ideas may fail without the support of most of the people involved

  16. Technology Adoption • Individuals become adopters through communication-based processes that include: • Becoming aware of the innovation • Becoming interested and seeking information about it • Evaluating it based on needs • Experimenting with it • Adopting the innovation if conditions are favorable

  17. Innovation Adoption Propensities

  18. Facilitating Organizational Change • Structure is not only related to new technology or system approaches, but also depends to a considerable extent on management style • Centralized autocratic management styles tend to adopt conservative strategies • Aggressive and competitive companies tend to be less centralized • Highly competitive, high-performance companies adopt flexible structures, especially in critical areas such as IT

  19. New Ways of Doing Business • Mature IT managers believe that operating excellence is a high-priority goal for their organizations • IT managers must seek to promote new ways of doing business for the firm • E-commerce is considered one of the highest growth areas and one of the most important business activities for the next five to ten years

  20. CIOs in the Internet World • Firms tend to expect benefits from new technology as a given and tend to forget, despite much evidence these benefits may be mostly intangible, imprecise, and immeasurable • Benefits can and must be translated into returns • CIOs are required to display the seasoned maturity and general management skills worthy of a CEO

  21. What CIOs Must Do for Success • CIOs must be fully contributing members of the executive suite, providing leverage to senior executives through initiative, creativity, and vision • CIOs must be advocates for IT and must educate peer managers on the complexities and challenges of IT • CIOs must develop visions and strategies for the firm’s use of information technology

  22. Summary • The chief information officer’s position is precarious in both theory and practice • The CIO position stands on shaky ground because information cannot be quantified or measured • Information is commonly created, used, and discarded without the CIO’s knowledge or approval • They are expected to be the firm’s technological leaders

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