Lecture 11 MGMT © 2012 Houman Younessi IS Leadership and the User Side of IS

Lecture 11 MGMT © 2012 Houman Younessi IS Leadership In order to understand the type of leadership appropriate for the IS function, we must first understand the possible roles IS may assume in a firm. There are four distinct role types recognizable: IS as business support function IS as a production “factory” function IS as a change enabler, “turn-around function” IS as a strategic component

Lecture 11 MGMT © 2012 Houman Younessi IS Leadership IS as Support Function This is the traditional, “old-school” view of IS. Most organizations start here. In such a role, IS is deemed as a tool to support and sustain current business operations and is a subservient function to not only the enterprise strategy but also its operation direction. In such enterprises, despite the widespread use of IS/IT, the firm may not be inherently dependent on the advantages it provides. Many professional offices, small to medium commercial organizations and the like still fall into this category.

Lecture 11 MGMT © 2012 Houman Younessi In this view, IS is deemed as an integral and critical but still operational aspect of the enterprise. IS and particularly IT becomes the central hub and the backbone of the operation, its “production facility” so to speak. Examples might be stock exchanges, airlines, order and shipment management firms. IS Leadership IS as an Production, “Factory”, Function

Lecture 11 MGMT © 2012 Houman Younessi In this view, IS is a vehicle for business transformation. Emerging IS technologies would be implemented to reposition a firm and transform how they do business fundamentally. Examples include Geico, IBM Domino’s Pizza IS Leadership IS as a Change Enabler (Turn-around Catalyst)

Lecture 11 MGMT © 2012 Houman Younessi IS Leadership IS as a Strategic Component In this view, IS is a vehicle for strategic positioning and gaining of strategic advantage. Information systems may or may not be the core business of the enterprise Examples include TD Ameritrade, Google, eBay, Amazon, Walmart

Lecture 11 MGMT © 2012 Houman Younessi IS Leadership Transition and Maturity Enterprises do not stay within one framework forever. Organizations change and it seems that they mature towards a strategic view and integration of IS. We must examine: 1) The level of centrality and criticality of the IS function to the operation and as such need for availability and responsiveness of the IS-based technology, and, 2) The level of criticality of the IS to the future, growth and positioning of the enterprise, and as such need for IT innovation.

Lecture 11 MGMT © 2012 Houman Younessi IS Leadership Transition and Maturity Innovation Responsiveness Factory Support Strategic Turnaround Dental clinic Geico IBM Nasdaq Domino’s Walmart

Lecture 11 MGMT © 2012 Houman Younessi The burning platform state -- in which demand for IS support exceeds supply and where IS is engaged in reacting to crises, repairs, and competing critical demands. IS is a quandary and at times is perceived as a threat and a sink hole for cash. IS Leadership States of IS Strategy Formulation Organizations and their IS function may formulate their IS strategy in a progression of stages/states: The support role state -- in which demands for IS services have been controlled, captured, categorized, and prioritized. IS becomes a dependable support function

Lecture 11 MGMT © 2012 Houman Younessi The alignment state -- where IS recognizes and utilizes the organization's business strategy as the basis for opportunity prioritization and the design of its organizational structure, processes, and infrastructures. IS Leadership States of IS Strategy Formulation The linked business/IS strategy state -- in which IS and business strategies are aligned through co-development and the IT strategy is embedded in the business strategy.

Lecture 11 MGMT © 2012 Houman Younessi The IT-enabled business transformation state -- where industry-altering technological concepts are pursued and become strategic for IS and the business. IS Leadership States of IS Strategy Formulation The IS-led business/IS strategy state -- where all or major components of business strategy are identified and contributed by IS.

Lecture 11 MGMT © 2012 Houman Younessi IS Leadership Leadership of the Support State Business focus tends to be on the core business with some incremental process improvement. The major business objectives are to deliver the requisite at minimum cost. Performance measure are on cost and traditional budget and service quality control. Corporate involvement is limited and is of supervisory nature. The IS leadership is viewed as functionaries

Lecture 11 MGMT © 2012 Houman Younessi IS Leadership Leadership of the Factory State In this state, IS’s vision is longer-term and is aimed to support and extend core business while staying with or ahead of competition. The mantra is increased productivity and profit contribution. As such, revenue and profit target as opposed to cost targets are pursued through operating efficiencies. Infrastructure and system complexity becomes a major technical issue. Performance measures are in terms of not only cost but profits, asset leverage and system and service quality, productivity and efficiency. The IS leadership is viewed as business-informed technocrats

Lecture 11 MGMT © 2012 Houman Younessi IS Leadership Leadership of the Turnaround State Vision remains medium term with short-term targets aligned with the turnaround horizon of the enterprise. IS’s focus is on identifying those technology trends that can provide significant business process change in line with the turnaround objectives. Speed of deployment and effectiveness of the opportunities identified are the major business challenges. In addition to the traditional performance measures of cost, revenue and profit; speed of deployment, and ability to add IS- based momentum to the turn-around effort are at play. The IS leadership is viewed as entrepreneur

Lecture 11 MGMT © 2012 Houman Younessi IS Leadership Leadership of the Strategic State Vision is long-term, targets range from long to immediate-term. Business focus is to build new business opportunities based on new IS technologies as they emerge, use IS to scale the business and increase market share, or use IS to drastically improve the way objectives are met vis a vis the rest of the industry. Key business challenge is to manage growth and stay in lockstep with corporate strategy particularly when new and attractive technology becomes available. Performance measures are profitable growth, asset leverage, market-share gain, net present value. The IS leadership is viewed as a business visionary.

Lecture 11 MGMT © 2012 Houman Younessi The User Side of IS