INSS737 - Management of Information Systems - Fall 2000

IT Organization and Leadership

Lecture notes

In our previous class meeting we saw that IR Architecture is comprised of two major layers: (a) IT resources and (b) IT management, as shown in figure 1 . In this class meeting we are focusing on the IT management layer, specially IT organization and leadership.

The issue of centralization versus decentralization is as old as IT in organizations. It has been described as a pendulum phenomenon, oscillating between trends toward centralization in one time, and towards decentralization in another. We have seen in our first class meeting the trend towards a CIO/CEO partnership in managing IT and also in the second class meeting the trend towards the partnership with end-user management. Therefore, we now have a partnership among IT management, top management and user management in administering IT resources, policies and strategies. This indicates that the pendulum is in the decentralization side. But issues like networking, scarcity of IT skills, globalization are strong forces pushing in the centralization direction.

A pure centralized or decentralized organization of IT is no longer an issue, but rather the degree of centralization - decentralization of specific resources and services. There is an overall consensus that central IT management should provide leadership in IT initiatives and operations, interact with top management to pursue the alignment of IT with strategy. Also, that many services and resources should be decentralized to end-user management, including functional IT departments, staff and equipment. Read the textbook pages 349-362 for a detailed discussion of the forces leading to centralization or decentralization of IT resources and services. See also pages 362-365 for a discussion on how to set up policies to define what should be central IT, user IT and top management IT responsibilities.

In this environment, where central IT management cannot decide alone what is to be done, the leadership role of the CIO and his/her staff is of vital importance. The Damned if you lead, damned if you don't article gives some examples of how this can be done and has a very useful distinction between management and leadership. Leadership is a bigger challenge to CIOs than mere decentralization and top management partnership. When a resource or function is provided by an IT functional manager this does not mean that the CIO is no longer responsible for the resource or service, but rather, that the CIO should learn how to lead the functional manager to work within the overall organization Information Architecture and contribute to the overall organization strategy. This task is challenging because four, eight or twelve (or even more) functional IT managers may be involved, each one trying to optimize the services and resources for his/her functional end-user management. Also, very frequently top management is trying to use IT to provide new products and services throughout the organization, and is up to the CIO to lead central and functional IT management in this direction.

Case instructions

We will use the basic framework to analyze the Taco Bell case 3-1: (a) what is the problem, (b) what are the alternatives, and (c) what are the recommendations; like we have done before.

1. What is the problem?

Why is it a problem? Is there a decision involved? If it is a problem, what are the pros and cons that makes it a problem?

2. What are the alternatives?

What can be done? There is always the do nothing alternative. If everything went well (rosy scenario) what we would like to do? If everything went wrong (doomsday scenario) what should we do? What can we do in between the rosy and the doomsday scenarios? What are pros and cons of each alternative? Be sure to list not only alternatives, but pros and cons.

3. What is you recommendation?

What criteria should we use to select the most suitable alternative in the case? Why you are recommending one alternative versus the others? How this alternative satisfies your criteria? How to implement the alternative you selected?