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Implications for the CIO and it Function
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To achieve lasting competitiveness through IT, according to the authors, companies face three enduring challenges: focusing IS efforts to support business strategies and using IT innovations to develop new, superior strategies; devising and managing effective strategies for the delivery of low-cost, high-quality IS services; and choosing the technical platform on which to mount IS services. Three strands of research - on the CIO's role and experience, the CIO's capabilities, and IS/IT outsourcing - demonstrate that businesses need nine core IS capabilities to address these challenges: 1. Leadership. Integrating IS/IT effort with business purpose and activity. 2. Business systems thinking. Envisioning,he business process that technology makes possible. 3. Relationship building. Getting the business constructively engaged in IS/IT issues. 4. Architecture planning. Creating the blueprint for a technical platform that responds to current and future business needs. 5. Making technology work. Rapidly achieving technical progress - by one means or another. 6. Informed buying. Managing the IS/IT sourcing strategy that meets the interests of the business. 7. Contract facilitation. Ensuring the success of existing contracts for IS/IT services. 8. Contract monitoring. Protecting the business's contractual position, cu:rent and future. 9. Vendor development. Identifying the potential added value of IS/IT service suppliers. IS professionals and managers need to demonstrate a changing mix of technical, business, and interpersonal skills. The authors trace the role these skills play in achieving the core IS capabilities and discuss the challenges of adapting core IS capabilities to particular organizational contexts. Their core IS capability model implies migration to a relatively small IS function, staffed by highly able people. To sustain their ability to exploit IT, the authors conclude, organizations must make the design of flexible IS arrangements a high-priority task and take an anticipatory rather than a reactive approach to that task.
This book is the definitive guide to leveraging the external services market for business advantage. Based on 25 years of research into over 1600 organizations and advisory engagements throughout Europe, the Americas, Asia Pacific and Africa, three world authorities detail the frameworks, lessons and practices that inexorably produce high performance. They pinpoint the who, where, and how of leadership, establish the strategic agenda and configure the outsourcing arrangement, how to manage across the outsourcing lifecycle, the vital client and supplier capabilities needed, how partnering evolves, and its real attributes, how clients innovate through outsourcing, and how they harness offshoring effectively.
This study explores the premise that knowledge in new product development proves both a barrier to and a source of innovation. To understand the problematic nature of knowledge and the boundaries that result, an ethnographic study was used to understand how knowledge is structured differently across the four primary functions that are dependent on each other in the creation and production of a high-volume product. A pragmatic view of 'knowledge in practice' is developed, describing knowledge as localized, embedded, and invested within a function and how, when working across functions, consequences often arise that generate problematic knowledge boundaries. The use of a boundary object is then described as a means of representing, learning about, and transforming knowledge to resolve the consequences that exist at a given boundary. Finally, this pragmatic view of knowledge and boundaries is proposed as a framework to revisit the differentiation and integration of knowledge.
This article explores the following question: For firms that have outsourced major portions of their IT functions, what core IS capabilities do they need to retain and nurture, or create and develop, to ensure a strong IS capability over time? the challenges and lessons learned from implementing major IT outsourcing arrangements from 1997 to 2004 at Dupont are used to reexamine a previously published IS capabilities framework by the authors.
The number of companies that outsource critical business processes to outside suppliers has been growing significantly worldwide. In 2012, companies outsourced some $309 billion of services - activities including finance and accounting, human resource management, procurement and legal services - and the overall volume has been growing at a rate of around 25% annually. Although many organizations initiated business process outsourcing (BPO) as part of an effort to reduce costs or acquire new skills, it has since evolved into much more. Today, senior managers want more than short-term cost savings, and they are skeptical of big-bang improvements. In relationships companies classify as high performing, the authors found that service providers perform ongoing innovation projects that deliver substantial long-term improvements to the client's operating efficiency, business process effectiveness and strategic performance. These types of innovations require companies and service providers to work together. BPO providers do not need incentives to improve their own revenue or margins, but they do need them to focus on the client's performance. The authors found that both clients and providers identified several important measures, including mandatory productivity targets, innovation days and gain sharing at the project level, as the most effective incentives. Other approaches involved making sure that providers know that they don't have a lock on the business and introducing special governance provisions, such as committees dedicated specifically to innovation. While partners may incentivize innovation by using mechanisms such as productivity targets, allocating innovation days and agreeing to gain share on innovation projects, the authors argue that innovation won't happen unless clients and providers implement a more comprehensive process that combines acculturation across different organizations, an engaging method for generating ideas, adequate funding and a system for managing change. Perhaps the most significant factor in BPO innovation, however, was whether the right people were in place to drive the dynamic innovation process. The authors found that an effective leadership pair - one person from the client organization and another person from the provider organization - went a long way toward invigorating the innovation process. In the high-performing BPO relationships the authors looked at, the leaders were experienced and capable, with high levels of credibility, clout and power within their own organizations.
CIO activities are expanding from providing IT services to including external customer responsibilities, working with non-IT colleagues and managing enterprise processes. We identify key activities for four types of CIOs and how CIOs spend their time across these activities, as well as their most important governance mechanisms. We also provide case examples of top-performing CIOs and ideas for how CIOs can migrate to more non-traditional activities.
Innovation is a major strategic issue for many organizations. This paper reports on findings from 10 case studies of successful IT-enabled innovation covering a wide range of organizations and projects. They were carried out as an exploratory study to identify practices that contribute to innovation and specifically consider the implications of a focus on innovation for earlier work on benefits-led approaches to IT.The research identifies a number of practices from benefits-led approaches to IT that contribute to IT-enabled innovation. There is also evidence of organizations developing a new practice of ideation drawing on ‘crowd sourcing’ and exploiting social media technologies. Existing principles and practices for benefits realization can contribute to innovation, but the practices have to be applied in different ways according to the context.The overall conclusion emerging from the detailed analysis is that a focus on IT-enabled business innovation represents a new paradigm in terms of the mindset and approach involved. It amounts to a third IT paradigm, different from previous paradigms of technology implementation and a planned approach to benefits realization. Further work is required to explore this paradigm and how organizations can make the ‘paradigm shift’ required.
Given the role that IT plays in businesses today, the chief information officer (CIO) is seen as having a significant responsibility in ensuring that its value is optimized. However, the history of IT investments has not been glowing and as a consequence blame for this situation is usually placed at the feet of the CIO. To explore further the role of the CIO and its link with organizational performance, interviews were conducted with CIOs, CxOs, and commentators. From the analysis of the data, a model linking the CIO role with organizational performance enabled by IT was developed. This model highlights the critical factors contributing to CIO and, ultimately, IT success. Of central importance is the environment within which the CIO operates. In particular, the research highlights the pivotal role of the IT savviness of the CEO and the leadership team. It reveals some uncomfortable lessons for CEOs and other c-suite members.
Despite wide recognition of the usefulness of resource-based approaches to organizational survival and competitiveness, these have rarely been applied in detail to the question of how the IS function in contemporary organizations can be configured. Against several trends—most notably outsourcing and that towards business ownership of IS—which for some commentators imply the steady demise or “withering away” of the IS function, our own empirical work has led us to posit the emergence in practice of the “high performance” IS function. This has four “faces” or fundamental tasks. We advance that a portfolio of nine core capabilities, several new to the IS function, are required to deliver high performance in this context. The relative importance of each capability will vary according to the nature of the business and its dependence over time on IS/IT. While a single individual may be able to provide more than one of the nine capabilities, the nine are logically distinct and each implies a distinct set of behaviours, skills and motivations. We detail the significant challenges to be met before any organization can successfully identify, recruit and retain a small group of high calibre professionals to deliver the “high performance IS” concept. Finally, the article suggests that sourcing IS/IT capability needs a more fundamental analysis than many organizations are willing to make. Apart from “outsourcing” there are real opportunities to “insource”, and such “insourcing” options will probably be important in any successful delivery of the “high performance IS” concept.
In the continuing quest for business growth, many CEOs are turning to their CIOs and IT organizations because technology is absolutely essential to two compelling sources of growth: innovation and enterprise integration. The speed of innovation often depends on the ability to coordinate across organizational boundaries. Innovations cannot reach a sufficient level of scale and impact unless they are integrated into the larger operations of the corporation. And yet, say recently retired Harvard Business School dean Cash, Oxford dean Earl, and nGenera director of research Morison, the two endeavors remain "unnatural acts": For too many large businesses are better at stifling innovation than at capitalizing on it, better at optimizing local operations than at integrating them for the good of the enterprise and its customers. To make both pursuits seem more natural, the authors recommend creating two dedicated, IT-powered teams: a distributed innovation group (DIG) and an enterprise integration group (EIG). The DIG serves as the center of expertise for innovation techniques, considers new uses for technology already being developed inside the company, looks for new developments outside the company, and provides experts for internal innovation initiatives. The EIG selects the most promising from among competing integration projects, provides resources to give them a strong start, and then folds them into the operating model of the enterprise. Without such agencies, the authors maintain, innovation and integration won't spread far enough or fast enough throughout a large organization to keep pace with the smaller, younger, more technology-based competitors to which innovation and integration come much more naturally.