Chapter 4
The Role of the CIO
Managing the Information
Technology Resource
Jerry N. Luftman
© 2004 Managing the Information Technology Resource, Jerry N. Luftman
Chapter 4 - Slide 1
Chapter Outline
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Role of the Chief Information Officer
How role has changed over time
Key characteristics of effective CIOs
Relationship of the CIO to the need for
alignment
© 2004 Managing the Information Technology Resource, Jerry N. Luftman
Chapter 4 - Slide 2
Synott’s Definition of CIO
• Manage information resources as vital
corporate asset
• Bring systems into competitive marketplace
• Manage and coordinate increasingly
decentralized information resources
• Manage end-user computing so that it serves
corporation's needs
• Be a catalyst for corporate change
© 2004 Managing the Information Technology Resource, Jerry N. Luftman
Chapter 4 - Slide 3
Evolution of CIO
• Term coined in 1980s and continues to
change over time
• Viewed as a strategist, not a manager
• Leadership is key
• Influence of CIO on forces determines
effectiveness of CIO
© 2004 Managing the Information Technology Resource, Jerry N. Luftman
Chapter 4 - Slide 4
© 2004 Managing the Information Technology Resource, Jerry N. Luftman
Chapter 4 - Slide 5
Distributed Era of CIO Roles
• Four Roles Emerged from Distributed Era
– Organizational Designer
– Strategic Partner
– Technology Architect
– Informed Buyer
© 2004 Managing the Information Technology Resource, Jerry N. Luftman
Chapter 4 - Slide 6
Web-Based Era
• CIO has new responsibilties
• Role includes suppliers and customers
• New roles are added to CIO
© 2004 Managing the Information Technology Resource, Jerry N. Luftman
Chapter 4 - Slide 7
CIO’s Resume Today
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Knowledge of applying IT to business
Visionary leader
Relationship manager
Marketer
Open systems-oriented
20 years in LOB management jobs
French, German, Japanese
Masters, Harvard Business
© 2004 Managing the Information Technology Resource, Jerry N. Luftman
Chapter 4 - Slide 8
© 2004 Managing the Information Technology Resource, Jerry N. Luftman
Chapter 4 - Slide 9
Current View of the CIO
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Highly mobile – high turnover
Must deliver effectively and rapidly
Well-rounded
Technically astute
People-oriented
Business skills
© 2004 Managing the Information Technology Resource, Jerry N. Luftman
Chapter 4 - Slide 10
Concerns of CIOs
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94% Enhancing customer satisfaction
92% Security
89% Technology evaluation
87% Budgeting
83% Staffing
66% ROI analysis
64% Building new equipment
45% Outsourcing hosting
© 2004 Managing the Information Technology Resource, Jerry N. Luftman
Chapter 4 - Slide 11
© 2004 Managing the Information Technology Resource, Jerry N. Luftman
Chapter 4 - Slide 12
© 2004 Managing the Information Technology Resource, Jerry N. Luftman
Chapter 4 - Slide 13
How CIO Affects Value of IT
• Focus on business needs as they relate to
IT organization
• Educator to business executives
• Demonstrate importance of IT
• Foster greater interaction
• Communicate successes and value of IT
• Good understanding of business vision
© 2004 Managing the Information Technology Resource, Jerry N. Luftman
Chapter 4 - Slide 14
Global CIO
• Must deal with factors from other nations
• Education and experience in dealing with
people of other nationalities and cultures
• Knowledgeable about cultural differences
• Knowledgeable about geography and
history
• Effectively deal with language differences
© 2004 Managing the Information Technology Resource, Jerry N. Luftman
Chapter 4 - Slide 15
CIO Attributes
– Analyst background and orientation
– Promote IT as agent of business
transformation
– Contributes beyond IT function
– Accurate perception of CEO views on
business and IT
– Integrates IT with business planning
– Profile stresses consultative leadership
and creativity
© 2004 Managing the Information Technology Resource, Jerry N. Luftman
Chapter 4 - Slide 16
CEO Attributes
• General management and/or marketing
background
• Change-oriented leadership
• Attended IT “awareness” seminars
• Experience IT project success
• Perceives IT as critical to the business
• Positions IT as agent of business
transformation
© 2004 Managing the Information Technology Resource, Jerry N. Luftman
Chapter 4 - Slide 17
Organizational Attributes
• Personal/informal executive style
• Executive workshops on strategic issues
• CIO accepted in executive team
© 2004 Managing the Information Technology Resource, Jerry N. Luftman
Chapter 4 - Slide 18
CEO Fit for Information Age
© 2004 Managing the Information Technology Resource, Jerry N. Luftman
Chapter 4 - Slide 19
CEO Must Believe in IT Importance
• Creating context
• Setting priorities
• Signaling
continuously and
positively
• Spending quality
time
• Relating with CIO
• Scan and understand
new technologies
• Working on vision of the
Future
• Sponsoring internal and
external architectures
• Embedding information
management processes
• Challenging IT’s supply
side
© 2004 Managing the Information Technology Resource, Jerry N. Luftman
Chapter 4 - Slide 20
Top 10 CIO Requirements
1. Leadership
2. Expertise in aligning
and leveraging
3. Business savvy
4. Relationship skills
5. Management skills
6. Communication
skills
7. Ability to create and
manage change
8. Knowledge and
experience in specific
industry
9. International experience
10.Ability to hire, develop,
and retain quality IT
professionals
© 2004 Managing the Information Technology Resource, Jerry N. Luftman
Chapter 4 - Slide 21
The Effective CIO
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Delegation of Operational Tasks
Seize Expenditure/Financial Authority
Avoid Adversarial Positions
Initiate Contacts Outside the Information
Technology Unit
– Create relationships with business peers
• Use Language Carefully
– Avoid use of technology jargon
© 2004 Managing the Information Technology Resource, Jerry N. Luftman
Chapter 4 - Slide 22
Feeny’s Characteristics of “Ideal” CIO
• Honesty, Integrity, Sincerity, Openness
• Business Perspective, Motivation, Language
• Communicator, Educator, Motivator, Leader,
Politician, Relationship Builder
• Continuously Informed on Developments in
IT, Able to Interpret their Significance to
Business
• Change-Oriented Team Play, Catalyst to
Business Thinking
© 2004 Managing the Information Technology Resource, Jerry N. Luftman
Chapter 4 - Slide 23
IT Managerial Skill Mix
© 2004 Managing the Information Technology Resource, Jerry N. Luftman
Chapter 4 - Slide 24
What Makes a Manager?
• Information Processing Roles
– Disseminator
• Interpret and edit before passing along
– Monitor
• Analyze information available to ascertain
problems
• Stay informed of activities outside subunit
– Spokesperson
• Source of information about subunit
• Sell capabilities and value of organization
© 2004 Managing the Information Technology Resource, Jerry N. Luftman
Chapter 4 - Slide 25
What Makes a Manager?
• Decision-Making Roles
– Entrepreneur
• Ability to change design of unit structure
– Disturbance Handler
• Deal with conflict and crises
– Resource Allocator
• Control resources with organization
– Negotiator
• Negotiate commitments
© 2004 Managing the Information Technology Resource, Jerry N. Luftman
Chapter 4 - Slide 26
What Makes a Manager?
• Interpersonal Roles
– Liaison
• Maintain relationships with other units
– Figurehead
–Formal obligations that come with
managerial title
– Leader
• Includes human resources activities
© 2004 Managing the Information Technology Resource, Jerry N. Luftman
Chapter 4 - Slide 27
What Makes a Leader?
• Broad business and organizational
knowledge
• Broad set of relationships in firm and
industry
• Excellent reputation and strong track record
• Keen mind and strong interpersonal skills
• High integrity and personal values
• High level of motivation
© 2004 Managing the Information Technology Resource, Jerry N. Luftman
Chapter 4 - Slide 28
Characteristics of Effective Leadership
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Has willing followers
Relationship between leaders and followers
Leadership occurs as an event
Use influence beyond formal authority
Operate outside boundaries of defined procedures
Involves risks and uncertainty
Not everyone will follow leader’s initiative
Consciousness creates leadership
Is a self-referral process
© 2004 Managing the Information Technology Resource, Jerry N. Luftman
Chapter 4 - Slide 29
Leaders vs. Managers
© 2004 Managing the Information Technology Resource, Jerry N. Luftman
Chapter 4 - Slide 30
Organizational Role Changes of CIO
• Networking resources to exchange
information
• Share data elements among business
units/external firms
• Apply common application systems across
the firm
• Requirements for specialized IT human
resources
© 2004 Managing the Information Technology Resource, Jerry N. Luftman
Chapter 4 - Slide 31
Critical IT Management Processes
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Setting strategic direction
Establishing infrastructure systems
Scanning technology
Transferring technology
Developing business systems
© 2004 Managing the Information Technology Resource, Jerry N. Luftman
Chapter 4 - Slide 32
Functional Changes in Role of CIO
• Focus on Strategist role
• At the center of operations for strategy
pertaining to technology
• Implementation of strategies pertaining to
technology
• Technology executive acting as counselor
to business executives
© 2004 Managing the Information Technology Resource, Jerry N. Luftman
Chapter 4 - Slide 33
Tips for New CIO
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Get a seat at the table
One-to-one communications with CEO
Partnership with peers
Study corporate culture
Understand business model
Define current commitments
Establish credibility through small things
© 2004 Managing the Information Technology Resource, Jerry N. Luftman
Chapter 4 - Slide 34
Tips for New CIO
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Build personal board of directors
Listen and talk
Be accessible and responsive
Set realistic goals
Take inventory
Assess your people
Understand value and threat of outsourcing
© 2004 Managing the Information Technology Resource, Jerry N. Luftman
Chapter 4 - Slide 35