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

• 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

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 Distributed Era of CIO Roles

• Four Roles Emerged from Distributed Era

– Organizational Designer
– Strategic Partner
– Technology Architect
– Informed Buyer

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 Web-Based Era

• CIO has new responsibilties

• Role includes suppliers and customers
• New roles are added to CIO

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 CIO’s Resume Today
• 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

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 Current View of the CIO

• 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
• 94% Enhancing customer satisfaction
• 92% Security
• 89% Technology evaluation
• 87% Budgeting
• 83% Staffing
• 66% ROI analysis
• 64% Building new equipment
• 45% Outsourcing hosting

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 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

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 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

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 Organizational Attributes

• Personal/informal executive style

• Executive workshops on strategic issues
• CIO accepted in executive team

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 CEO Fit for Information Age

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 CEO Must Believe in IT Importance

• Scan and understand

• Creating context new technologies
• Setting priorities • Working on vision of the
• Signaling Future
continuously and • Sponsoring internal and
positively external architectures
• Spending quality • Embedding information
time management processes
• Relating with CIO • Challenging IT’s supply
side

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 Top 10 CIO Requirements
7. Leadership 7. Ability to create and
8. Expertise in aligning manage change
and leveraging 8. Knowledge and
9. Business savvy experience in specific
industry
10.Relationship skills
9. International experience
11.Management skills
10.Ability to hire, develop,
12.Communication
and retain quality IT
skills professionals

© 2004 Managing the Information Technology Resource, Jerry N. Luftman Chapter 4 -Slide 21
 The Effective CIO

• 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

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 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

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 IT Managerial Skill Mix

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 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

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 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

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 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

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 Characteristics of Effective Leadership
• 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

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 Leaders vs. Managers

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 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

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 Critical IT Management Processes

• Setting strategic direction

• Establishing infrastructure systems
• Scanning technology
• Transferring technology
• Developing business systems

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 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

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 Tips for New CIO

• 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

• 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