How is IT managed in your organization? Most organizations do not think of this as a crucial question to consider, but in order to ensure competitive success in today’s complex business environment, responsibility for IT decision-making should be shared and not left solely in the hands of the CIO. Read on to find out more.
In many organizations, IT is managed via a Chief Information Officer (CIO), who is given a budget and mandate and simply left to ‘get on with it!’ This may be because CEOs and boards want to concentrate on what they would consider as their core business and IT is just viewed as another business function, like manufacturing or logistics. Whereas such an approach might well work for manufacturing or logistics, it will definitely not work for IT.
Achieving the maximum value from IT investment is a shared responsibility, say Donald Marchand and Joe Peppard in an article published in the European Business Review. According to Marchand and Peppard, CEOs should be clear about IT decisions that need to be made, who should make them, how they are made, and the supporting management processes, structures, information, and tools needed to ensure effective performance. The focus must shift from operational IT issues (i.e. deliverance of technological capabilities and IT services), to value realization — what Marchand and Peppard refer to as “business governance of IT.”
They highlight that many CEOs view IT as a competitive necessity and a cost of doing business that should be minimized. In contrast to this “traditional” mindset, a “business impact” mindset recognizes IT as a potential source of competitive differentiation, and managers with this mindset are concerned with how IT and information are used, not just how technology is deployed. In parallel, they have found that some CIOs tend to have a “small i, big T” mindset, seeing the IT function as primarily a technical and engineering activity. Then, there also exists the “business player” mindset, where CIOs work to engage senior managers in setting business priorities for information and IT projects, solutions, and capabilities; in other words, they act as a “player” on the senior management team.
These clear differences in mindsets and the resulting perceived roles and responsibilities of senior managers and CIOs mean that how IT is managed can significantly differ from company to company.
A starting point for organizations is to work out which of the above views best describes them, and what they believe they can or should move to in the future. Marchand and Peppard suggest two questions that should be explored:
Ultimately, how information, IT, and knowledge capabilities are viewed and developed in an organization is something too important to be left to the CIO alone. Competitive success in today’s business environment depends on companies consciously and strategically making decisions related to information, IT, and knowledge.
The bottom line, according to Marchand and Peppard, is that executives need to get their hands dirty and actively engage with their CIO, as decisions about IT today often have little to do with technology.
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