Adaptive Capacities of State IT Departments

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Adaptive Capacities of State IT Departments: Perceptions of CIOs Coping with
Change
Margaret F. Reid
University of Arkansas
Department of Political Science & Public
Administration
Fayetteville, AR 72701
1-479-575-5352
[email protected]
Myria W. Allen
University of Arkansas
Department of Communication
Fayetteville, AR 72701
1-479-575-5952
[email protected]
Cynthia K. Riemenschneider
University of Arkansas
Information Systems Department
Fayetteville, AR 72701
1-479-575-6120
[email protected]
Deborah J. Armstrong
Florida State University
Management Information Systems Department
Tallahassee, FL 32306
1-850-644-8228
[email protected]
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ABSTRACT
The purpose of this article is to ascertain how state IT
departments, specifically Chief Technology or Information
Officers (CTOs/CIOs) view changes in their external environment
and their departments’ ability to adopt and implement new
information technologies. The research is based on a recently
completed national survey of state IT departments in the US.
Employees at three levels in the organization were surveyed:
CIOs, managers and employees. This article only focuses on the
CIO responses. It contributes to the scant systematic empirical
research of state IT departments and their capacities to adapt to
and manage technological change. Preliminary findings suggest
that CIOs generally perceive their external environments as
relatively stable and rich in opportunities. They see their offices as
central in the formation, implementation, and evaluation of IT
policy and practices throughout their state governments. They
perceive their IT employees as actively scanning the external
environment for relevant information and as being capable of
importing, adapting, and utilizing new technology-related
information. Interesting correlations emerged in that CIOs who
described their environment as relatively stable and rich in
opportunities also indicated their employees were actively
engaged in knowledge scanning, their department had a high
absorptive capacity, and their office is more central in IT policy
formation. Future research will include information regarding the
states’ economic conditions, strategic and management
environment as well as the states’ policy innovativeness
considering the adoption of various technologies.
Categories and Subject Descriptors
Management, Human Factors
Keywords
Organizational Change, Adaptive Capacities, State Information
Technology Departments, CIOs
1. INTRODUCTION
0B
The purpose of this article is to ascertain how state IT
departments, specifically Chief Technology or Information
Officers (CTOs/CIOs) view their external environment and their
departments’ ability to adopt new information technologies. IT
departments have shown considerable willingness to adopt
fundamental changes in their internal operations, and, in some
states, may be on the verge of becoming change agents for state
governments as a whole [26].
IT departments, once largely seen in a technical support role, have
assumed critical strategic planning functions for their respective
levels of government. With passage of the Clinger-Cohen Act
(also known as the Informational Technology Management
Reform Act) of 1996, the federal government under the auspices
of the Office of Management and Budget (OMB) centralized IT
initiatives to achieve OMB’s overall vision for integrated federal
enterprise architecture. These centralization efforts were by no
means seen as meaningful by all federal CIOs [19].
A widely discussed study by the General Accountability Office in
2004 found that since the passage of Clinger-Cohen, the average
tenure of federal CIOs has been approximately two years, far
shorter than what most CIOs consider to be a sufficient length of
time to implement complex policy changes [19] and significantly
shorter than their private sector counterparts whose average tenure
hovers around 5.7 years [3]. It is clear from all accounts that
federal CIOs are under tremendous pressure to respond to political
forces while simultaneously managing their own internal affairs.
Such observations echo Bordia, Hobman, Jones, Gallois, and
Callins’ [7] conclusions that uncertainty is one of the most
commonly reported outcomes of change and that associated
stresses are one of the primary negative consequence that often
results in voluntary turnover in organizations. Problems coping
with change-related uncertainties may explain the short tenure of
many federal CIOs.
While IT environments at the federal level have been the subject
of a number of studies, far less is known about conditions in the
50 states. Like their federal counterparts, state IT departments
have experienced considerable external environmental pressures
to adopt strategic changes, have suffered similar adverse effects
from CIO turnovers, and have struggled with finding a suitable
organizational model that can balance centralized and
decentralized approaches to managing IT innovations [5, 22].
The current research presents preliminary findings of a national
survey of US state IT departments with focus on the perceptions
of CIOs. Specifically, we address how they view their external
environment and their agencies’ ability to learn and adapt in order
to cope with technology-related changes. We pose three research
questions: (1) how do state CIOs view their external
environments; (2) how central do they see their office’s role in
shaping and implementing the state’s IT strategies; and, (3) how
do they judge their departments’ ability to learn and adapt?
2. LITERATURE REVIEW
We begin our literature review with a discussion of the unique
challenges facing state IT departments and their CIOs. We then
offer a brief discussion of the consequences of rapid
organizational change and appropriate change leadership
approaches. We were especially interested in the perceived
adaptive abilities of the CIOs and their departments. We then
outline the study’s methodology, present our findings, and
conclude with implications for researchers and public sector
managers.
2.1. Accelerating changes in state government
IT departments
Over the past two decades, public agencies have encountered
accelerating changes in at least five areas with significant
technology implications: 1) improved service delivery
(government to citizens and government to business); 2) data
integration; 3) data standardization and sharing across
organizational boundaries; 4) protection of critical information
and systems in the wake of recurring attacks on public
information infrastructures; and 5) the adaptation of existing
structures and processes to a constantly changing external
environment [21,36]. Despite most IT departments’ enthusiasm
for technological change, the reported implementation challenges
and failures are legend [18]. Given the complexity of such
projects and the high expectations associated with their
implementation, such outcomes are not surprising. Moreover, as
Yang and Melitski have cogently argued, each of these five areas
of technological change are associated with often competing
values, such as external versus internal priorities, or effectiveness
versus efficiency criteria [45]. While these observations about
recurring challenges do not appear to differ much from those in
the private sector, actors and organizations in the public sector
work in unique institutional environments in which these
technological changes are happening: political and policy
priorities that cannot always be properly synchronized with the
technological changes [8, 21,38]. This disjuncture produces
conditions that are not easily captured by traditional change and
leadership theories, as we will see below. Suffice it to say, states
have undertaken valiant efforts to respond to the demands of the
federal government to safeguard the nation’s wellbeing as well as
their own state governments’ calls for improved service delivery
and internal efficiencies.
In the following we will discuss theories of organizational change
and associated change management concepts, noting the
limitations of traditional change concepts when applied to IT
settings in state government.
2.2. Organizational adjustments in rapidly
changing public sector environments
Public organizations are facing spending cuts, increased external
environmental turbulence, stakeholder hostility, coupled with
increased demands for efficiency, effectiveness [31], and a client
focus [2]. As a consequence, public sector managers must be
prepared to consider a broad range of proactive changes that can
improve organizational functioning [37]. Unlike changes in the
private sector, public sector managers find that such changes have
been difficult to implement given the often contradictory demands
from multiple stakeholders [39] as well as resistant organizational
cultures [17, 27].
Some authors view innovation and change as complex but
manageable processes that rely on extant organizational capacities
to deal with new knowledge, often referred to as path dependency
[10, 25]. However, innovations, technological or otherwise, have
the potential to create disruptions of institutionalized patterns of
interactions between individual actors as well as between
interdependent organizations. When change exceeds current
capacities of the organization to absorb it into its existing
processes, organizational leaders must decide if the costs of
change are too severe, especially when coupled with a high degree
of uncertainty about likely positive outcomes. Traditionally,
contingency theorists have suggested that organizations must
carefully scan their external environments [29] to determine the
nature of the costs and benefits to derive reliable information to
make decisions that seek to create a suitable “fit” between the
goals of the change and the organizational design [32]. Change
often also results in realignment of power structures, resources
and influence, and resistance to change is thus not uncommon as
uncertainty looms large.
2.3. Leadership and change management
Change management is a critical leadership role, especially when
an organization’s external environment is dynamic or when
organizational performance is lagging [42]. Considerable work on
transformational leadership (sometimes called charismatic or
visionary leadership) has been conducted in the last few decades
[24]. Transformational leaders are said to be adept at articulating
ambitious group goals, inspirational in spurring workers to
achieve group goals, and supportive of organizational members in
reaching goals [6]. Yet, unlike in the private sector,
transformational leaders within public sector organizations must
also account for issues involving “the public interest,
collaboration, constitutional values, citizenship, democratic
values, networks of relationships, multiple layers of
accountability, and a view of public administration as part of the
governance process” [15:567].
Many contemporary researchers have been far less sanguine about
the abilities of leaders to provide definitive answers to the
problems they face [20]. As Brunsson [9:4] notes: “when an
organization is specifically designed to deal efficiently with one
set of objectives, tasks and situations, problems may easily arise
when it has to handle other objectives, tasks and situations.”
Likewise, the earlier literature has largely overlooked the political
dynamics associated with the emergence and embedding of
innovative knowledge-based structures [12, 21]. When knowledge
is emerging in an environment of uncertainty, leaders cannot rely
on the traditional rational responses (scanning, cost-benefit
analyses, etc.) to provide them with reliable answers. The nature
of emergent knowledge is that little about its value is predictable.
Instead, leaders must seek to create learning organizations where
organizational members together seek ways to adapt to and
manage change.
In the current study, we focus on the CIOs’ perceptions of the
external environment (e.g., turbulent, opportunity rich,
controllable), and their office’s ability to develop, implement,
monitor, and evaluate technology-related practices and policies
throughout state government.
Because there is no objective way of knowing what constitutes
“the environment”, leaders and organizations "enact" an external
environment that is consistent with their mental models [43]. The
way CIOs enact the institutional environment in which their
departments operate, will lead to different organizational
responses depending on the nature of the technological challenges
they face. In some cases, organizations may experiment with
structural adaptations that allow them to change without exposing
their employees to inordinate stresses. Others may succumb to the
temptation to “control” their internal responses [30]. In some
public sector organizations this has led to a tendency to centralize
IT functions and to elevate IT departments to cabinet-level units.
Therefore, it is very important to identify how CIOs perceive and
characterize their environments.
2.4. Adaptation challenges and determinants
of absorptive capacities: The view from the
top
Outside sources of knowledge are critical to induce innovation
[11]. Inputs of new knowledge can provide the trigger for
innovation, or remove barriers that have prevented innovation. An
organization’s ability to adapt can be viewed as a function of that
organization’s absorptive capacity. Absorptive capacity, originally
proposed by Cohen and Levinthal, is defined as the ability to
recognize the value of new information, assimilate it, and use it
for organizational purposes [11, 46]. Using the definitions
provided by Zahra and George [46], the absorptive capacity
process consists of acquisition, assimilation, transformation and
exploitation. Acquisition is an organization’s capability to identify
and acquire externally generated knowledge; assimilation refers to
the organization’s routines and processes that allow it to analyze,
interpret, and understand the information; transformation is an
organization’s capability to develop and refine the routines for
combining its existing knowledge and the new knowledge; and
exploitation is its routines that leverage the existing knowledge
and integrate the new knowledge such that it may be applied in
the firm [46].
This paper focuses on the acquisition phase, which is the first step
in the knowledge creation process of absorptive capacity. The
first component of the acquisition phase requires some
understanding of the external environment. Within the field of IT,
technology is changing at an ever increasing rate. As stated
previously, CIOs are faced with increasing changes in the
environment. Organizations must adapt to these changes or risk
obsolescence. CIOs’ perceptions of the external environment will
influence their perceptions of the external information. To gain
external information, pathways to import new information into an
organization need to exist. Powell, Koput and Smith-Doerr [35]
found that the quality of exposure to the external environment
provides opportunities for better access to information. In some
cases, organizational members may be unaware of the information
available in the environment.
Another component of the acquisition phase involves an
organization’s ability to monitor the external environment and for
organizational members to synthesize this information into
concepts and/or ideas that may be useful.. This is often referred to
as knowledge scanning.
The third component of the acquisition phase is the ability to
import the knowledge into the firm. Does the CIO have the
authority and responsibility to see the acquisition through the
absorptive capacity process? Without this authority it does not
matter how much environmental scanning is occurring in the
organization, the knowledge will not be absorbed into the
organization.
From a technology perspective, while Aladwani [1] found that
absorptive capacity is an important determinant of positive IS
project outcomes, Lei and Hitt [28] argue that relying extensively
on external technology could degrade an organization’s absorptive
capacity. Without investing in the organizations’s absorptive
capacity, technological knowledge is of little long-term benefit to
it [11]. Therefore, in the current study, we investigate CIO
perceptions regarding whether or not their department has the
capacity to effectively absorb information related to technological
changes.
3. DATA and METHODS
3.1. Participants and procedure
Data were collected from CIOs and CTOs across the United
States. The names and e-mail addresses of the state CIOs/ CTOs
were obtained from the NASCIO head office in Lexington, KY.
The Executive Director of NASCIO contacted each of the state
CIOs by e-mail, giving them the URL for the survey website and
encouraging them to complete the survey. A reminder e-mail went
out two weeks later. The on-line survey took approximately 25
minutes to complete and consisted of 125 questions. In order to
maintain anonymity, personal identification data were not
collected.
The sample for this study consisted of 27 respondents from 16
states (with three states having multiple respondents). Sixty-one
percent of the respondents were male, their ages ranged from 24
to 66 (M = 49, SD = 8.4), and they had worked in IT from 1.5 to
40 years (M = 23.4, SD = 10.5). In terms of education, 50% had a
graduate degree, 38% held a bachelor’s degree and 12% had an
associate’s degree or less.
3.2. Measures
All survey items came from previously validated scales.
However, we did pre-test the on-line instrument to be sure that the
electronic entry worked correctly. For this research we will use
responses from questions which we believe best characterized the
CIOs’ views of their external environment (external environment),
how they rated the absorptive capacity of their department
(absorptive capacity), how much they believe their office
influences the state’s technology policies (centrality), and what
types of activities they engage in to prepare their organizations for
ongoing and rapid changes (scanning). Responses were recorded
using a 7-point Likert-type scale (1 = strongly disagree, 7 =
strongly agree) or a 7-point control scale (1 = full control, 7 = no
control). CIOs were asked to assess their organizations’ external
environment. The question used a bipolar scale [13] using three
items ( = .79) where the lower scale indicates a more stable,
opportunity-rich environment. Nine items from the absorptive
capacity scale [34] were used ( = .96). CIOs commented on their
staffs’ ability to identify, acquire, evaluate, assimilate, integrate,
exploit, and use new information and knowledge. A score of 1
would suggest that the state is not considering the adoption of a
specific technology and score of 7 would indicate that the state
has fully adopted and implemented the respective technologies.
To determine how central the IT department was in shaping
technology policies and policy implementation in the state, ten
items were adapted from a centrality scale developed by Anderson
and associates [4]. Lower numbers indicate higher perceived
control. Centrality had an alpha of .91. Scanning the external
environment for new knowledge [41] was measured using seven
questions ( = .92).
Specifically, we investigated the acquisition and absorption of six
IT technologies or technology/processes and how extensively they
were being used. We selected 3 technologies (Voice over the
Internet Protocol (VoIP), Web2.0, and Geographic Information
Systems (GIS), and three technologies that involve both technical
and process elements: Enterprise Resource Planning (ERP),
Customer Relationship Management (CRM), and Service
Oriented Architecture (SOA). Based on the review of the
literature and the suggestions of the Executive Director of
NASCIO, these six appear to either currently be used in state
government IT departments or are being considered for use in
such departments.
Regarding the technologies, while GIS has been used in the public
sector for quite some time, the other two (i.e., Web 2, VoIP) are
more recent technologies. ERP was first used in the 1970s and
1980s in the private sector and incorporated in the 1990s in
governmental IT departments. Because processes are much more
difficult to implement ERP failures were quite extensive [14, 33].
ERP implementation is influenced by economic conditions and
the maturity of the IT organizations because more mature
organizations have a better understanding of the IS environment
[23]. CRM and SOA are newer entrants into governmental
agencies (1990s to early 2000s). SOA was especially heavily
pushed by the federal government and NASCIO has an active
program in place to help states with its implementation.
4. RESULTS
Research question 1 asked how CIOs view their external
environment. Responses ranged from 1.33 to 6.67 (Mean = 3.67,
SD = 1.35) which suggests that most CIOs felt that their
environments are somewhat stable, rich in opportunities, and
controllable. Those who described their environment more
positively were more likely to report that their staffs engaged in
more knowledge scanning (r = -.65) and had a high level of
absorptive capacity (r = -.59), and rated their office as more
central in formulating their state’s IT policy and practices (r =
.70).
Research question 2 asked how central the CIOs saw their
departments’ roles in actions such as formulating IT policies for
the state, developing and enforcing IT standards, or writing and
monitoring the implementation the state’s IT strategies. Responses
ranged from 1 to 6.2 (Mean = 3.51, SD = 1.45) which suggests
that many CIOs felt their departments are somewhat central in
formulating, implementing, and assessing the state’s IT policy and
processes. Those CIOs who thought their departments were more
central in the state IT policy formation and processes reported
their staffs engaged in significantly more knowledge scanning (r
= -.72) and rated their department’s absorptive capacity higher (r
= -.40).
Finally, with research question 3 we also wanted to know what
CIOs are doing to track new IT developments, given the
increasing uncertainty with regard to technological changes, how
much they may be learning from other states or from industry. In
terms of knowledge scanning, the range was between 2.57 and 7.0
(Mean = 5.23, SD = 1.09) which suggests a high level of
knowledge scanning in many state IT departments. In terms of
absorptive capacity, CIOs’ responses ranged from 2.67 to 7.0
(Mean = 5.11, SD = 1.81) which indicates that many feel their
staffs can effectively absorb information related to new
technologies. As would be expected there was a significant
relationship between knowledge scanning and absorptive capacity
(r = .57). (Table 1 about here)
Table 1
1
2
3
Absorptive
Capacity
1
Knowledge
Scanning
.57**
1
Centrality
-.40*
-.72**
1
External
Environment
-.59**
-.65**
.70**
*significant at .05
4
MEAN
5.11
5.22
3.51
1
3.67
**significant at .01
As a post-hoc analysis, we were interested in getting a more
nuanced picture of absorptive capacities regarding the six specific
technologies or processes using technologies identified earlier. All
responses to this question were recorded on 1 to 7 scale (with 1
being not considering or adopting the technology and 7 indicating
complete infusion into the unit). Twenty-one of the 27 CIOs
responded that they used GIS and reported that it was well infused
into their units’ technology usage (Mean = 5, SD = 1.4). Fewer
departments reported use of VoIP (n=11) and Web 2.0 (n=10),
with infusion means of 5.5 (SD = 1.08) and 3.9 (SD = 1.5),
respectively. This would suggest that VoIP has been adopted by
fewer states, but those who use it have strong levels of
acceptance.
In terms of the technologies with technical and process elements,
ERP was present in 10 states, but those who had adopted it
showed high absorption rates (Mean = 6.1, SD = 1.1). Thirteen
states reported adoption of CRM and 12 had adopted SOA (with
reported means of 4.6 (SD = 1.3) and 5.4 (SD = 1.4) respectively.
This again would suggest that these technologies have been
adopted by fewer states, but those of use it show fairly high
infusion rates.
Finally, we correlated all 6 technologies/technology processes
with our 4 variables. Knowledge scanning was significantly
correlated at the .05 level with Web2.0 (r = .73), CRM (r = .55,),
SOA (r = .58), VoIP (r = .69), and with GIS (r = .68) and with
ERP (r = .83) at the .01 level. GIS (r = -.52, p < .05), VoIP (r = -
.72, p < .05), and Web2.0 (r = -.73, p < .05) were correlated with
centrality. GIS (r = ,79, p < .001), VoIP (r = .83, p < .01), and
Web2.0 (r = .56, p < .10) were correlated with absorptive
capacity. VoIP (r = -.71, p < .05), GIS (r = -.61, p < .01), and
CRM (r = -.54, p < .10) correlated with the external environment.
5. DISCUSSION and PRELIMINARY
IMPLICATIONS
This paper has provided us with an initial glimpse at state IT
organizations’ responses to technological changes facing them. IT
adoption and implementation in state government is influenced by
two primary drivers: organizational/internal factors and external
environmental conditions. Successful agencies manifest a high
degree of awareness of their own agency culture as well as the
receptivity of their key stakeholders to the introduction of a new
technology. Fiscal and political conditions in a state often temper
IT professionals’ and other governmental administrators’
enthusiasm for the adoption of new technologies. Likewise,
citizens and businesses may lack trust or confidence in
governmental agencies [44].
Our first research question sought to identify how CIOs view their
external environment. The range of their responses varied widely
from those who described their environment as very stable,
opportunity rich and controllable to those who described their
environment as more turbulent, lean, and unmanageable. How
they viewed their environment was significantly related to how
they described their staff’s efforts at knowledge scanning and
their absorptive capacity. Those who functioned in less
problematic environments also reported playing a more central
role in their state’s IT policy formation and processes.
The second research question asked CIOs how they described the
centrality of their offices in the adoption and infusion of new
technologies in their own departments as well as across state
government. Again, responses varied considerably. CIOs, being
aware that the introduction of new technologies, and even more so
technology based processes, require considerable amounts of
time, have recognized that they must be proactive and assume
critical leadership roles for their states. As mentioned earlier, in
some states, CIOs may be on the verge of becoming change
agents for state government as a whole
The ability to absorb and integrate new knowledge into extant
technological infrastructures remains foremost on CIOs’ minds.
Examples such as Utah and Michigan come to mind: "Until we
can get very high adoption rates, it will slow down our being able
to get efficiencies out of electronic government," said thenMichigan CIO Teresa Takai [16]. The results of this study suggest
that CIOs attempt to create departmental environments that
encourage their staff to assemble clues both internally and
externally regarding if and to what extent to adopt technologies.
This, of course, is typical of the IT profession. IT managers must
constantly be alert to new developments that may affect their
field. Technologies to be successfully implemented require a high
degree of adoption rate [16]. With technologies that are largely
implemented internally, or whose adoption can be mandated, there
is a greater chance that adoption will actually occur. However, in
answering research question three, once again we see that the state
CIOs vary widely in their description of their staffs’ ability to
engage in knowledge scanning and absorptive capacity.
The introduction of complex technologies such as CRM and SOA
carry a high risk of implementation failure in the public sector
because of the myriad of vertical and horizontal linkages that must
be maintained as well as the plethora of legacy systems [40]. CIOs
who are more likely to be attentive to external environmental
pressures are more likely to make such serious commitment. In
the public sector, however, external influences or forces are both
political and economic in nature, and can send conflicting signals
to these managers (fiscal exigencies in state government,
experiences in the private sector, and political commitments from
their political principals). It would thus be important to address
such factors in future analyses.
More research is needed to determine what accounts for the
differences in correlations of various technologies with our four
variables. Among others we will: (1) correlate the survey data
with other information available about individual state’s
innovation efforts, (2) create a website that will be accessible to
all states which participated in the survey and that will allow them
access to aggregate findings produced by survey as well as
summaries of efforts underway by participating states gleaned
from their states’ websites, and, (3) provide individual states that
generated
sufficient
responses
at
all
three
levels
(CIO/managers/employees) with individualized reports to assist
the CIOs in better understanding their state’s technology and
management environment.
6. ACKNOWLEDGMENTS
1B
The researchers are indebted to the National Association of State
CIOs (NASCIO) for its support of this project, and the generous
funding provided by the Diane D. Blair Center of Southern
Politics and Society and the Sam M. Walton College of Business,
University of Arkansas.
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