Leadership of the IT Function Chapter 10

Objective Understand the different roles that IT can play in organizations and recognize that this role can change over time Understand why IT role transitions may create organizational tensions and conflict. Understand why it is valuable to match the leadership approach to the role that IT is expected to fill in the business

Agenda Understanding the role of IT in the firm Recognising transitions in the role of IT Managing tensions in the changing role of IT Leadership approaches to the role of IT

Role of IT in the firm Two dimension (depends on a company’s size, industry, and competitive landscape) – The business implications of the IT application portfolio  sustain enterprise operations, IT excellence in execution Need for reliable information technology – The business implications of the IT project portfolio  grow the enterprise (future), innovation efforts Need for new information technology

Role of IT in the firm Four broad roles for IT – Support (defensive) Early 1990s, business as usual with IT services “don’t waste money” – Factory (defensive) Critical to current business operation Nasdaq Stock Exchange  % reliability required “don’t cut corners” – Turnaround (offensive) A means for business transformation, exploit emerging strategic opportunities Board oversight is critical – Strategic (offensive) Sustain current business operations and enable their future transformation, e.g. Amazon.com, Google “spend what it takes, and monitor results like crazy”

Analysing the role of IT in an organisation

How to conduct IT oversight Inventory the assets (all modes) – Physical IT assets + intangible assets (software + information, 10 times of Physical IT) – Decide which aging and legacy programs should be upgraded or maintained Assure security and reliability (factory and strategic modes) – Ideally security and reliability measures conducted regularly Avoid surprises (factory, turnaround, and strategic modes) – Surprises from lax or ineffective project management Watch out for legal problems (turnaround and strategic modes) – Intellectual property issues Keep an eye out for fresh threats and opportunities (turnaround and strategic modes) – Monitor firms in other industries for the use of leading-edge technology application

An IT governance committee to-do calendar (pp ) Defensive Governance – IT projects/architecture – IT Security – Internal control Offensive Governance – Advisory role – Strategic technology scanning Administrative

Transitions in the role of IT Turnaround transitions – Canyon Ranch back-office (support)  customer loyalty, real-time business (turnaround, unstable role)  strategy Factory transitions – Manufacturers use ERP (support to factory) Strategic transitions – Local phone service, innovative collaboration with partners through IT-led development  new sources of incremental revenue (combining billing; combined wire- line and wireless voice mail) (factory to strategic)

Managing tensions in the changing role of IT Managing the execution-innovation tension – Potential operational impact of IT on a firm – Management’s willingness to take a risks Managing the IT-business relationship – Involved process analysis and redesign – Boundary management for IT department and business groups

Leadership approaches to the role of IT Support: organizing for low-cost stability and incremental improvement – A cost centre, interact with managers and clerks in operations or finance, not executives – Low risk, low cost, E.g. Increased process automation Factory: organizing for factory-like efficiency and reliability – Cost-effective totally reliable operations – Consolidating the infrastructure Turnaround: organizing for experimentation and rapid exploitation – Have direct relationship with the firm’s senior executive team – Opportunities for experimentation and learning, as well as speed of deployment are high priorities Strategic: organizing for operational discipline and business agility – Focus on execution and growth – Scan leading-edge technologies, inform potential users, initiate explorations of their use to solve business problems or address opportunities