The CIO Profile: State of the Practice in a Developing Country

The CIO profile: State of the practice in a developing country

Ariel La Paz

Universidad de Chile

Christian Cancino

Universidad de Chile

Sigifredo Laengle

Universidad de Chile

Abstract

The great possibilities offered by the information systems and technologies (IS/IT) impose new challenges to the organizations, demanding an evolution of the skills and abilities of the executives in charge of IS/IT management. The evolution of the Chief Information Officer (CIO) that endows him/her with the capacity to face such challenges has been treated in the literature with a focus on developed contexts; however, the evolution of the role may not be true for all. We identified existing classifications and archetypes and organized them progressively in a typology of abilities that represent the evolution. Then we interviewed 26 CIOs in important companies in Chile to contrast their current roles with the typology. The activities and responsibilities reported by individuals in the sample could be considered as part of a natural transition to the strategist type, however it is not the ideal role prescribed in the literature.Unexpected results were associated to variables like experience or graduate education that challenge prescriptions of the role found in the literature.

Keywords

Chief Information Officer, Business value of IS/IT, Strategic IS/IT planning and management.

1. Introduction

Over the last decades,several organizations have developed great capabilities using information systems and technologies (IS/IT). Opportunities to improve business models through the use of IS/IT are spread throughout organizations to improve workforce productivity, create IT-based products and services, re-engineer business processes, reduce operating costs, support expansion and connectivity, improve security/risk management, manage IT portfolios or support decision making processes (Andriole, 2009; Weil, 2009). Then, the role of the person responsible for the administration of the informatics platforms and information services, the Chief Information Officer (CIO), becomes critical for the organizations that seek to capitalize the potential benefits of IS/IT in an especially dynamic environment (Carter, Grover, & Thatcher, 2011; Karanja & Zaveri, 2012; Peppard, Edwards, & Lambert, 2011).

Along with the rapid evolution of IS/IT – increased capacity to develop and implement systems and technologies for information storing, processing and exchange– and the increasing pervasiveness of technologies, the role of the CIO has also changed (Jewer & McKay; Peppard, et al., 2011). During the first years of use of IS/IT in organizations, CIOs performed mostly technical roles to analyze data by the setup of machines and applications that semi-automated large calculations(Chun & Mooney, 2009), commonly reporting to administration and finance departments. As the capacity and power of computers evolved, and the costs of acquiring IT decreased, companies invested heavily in IS/IT with the ideas of reducing human errors in manipulating data, and enriching the analysis and reporting of large datasets; however, IT departments were commanded by technicians capable of understanding how to connect and operate the complex computer languages, but not necessarily aware of a business logic. Over time, the evolution of the use of data to use of information and knowledge supported by IT applications increased the importance of IS/IT management and transformed the technology applications into key tools for diagnosing and controlling operations, finding patterns in customers’ preferences, increasing efficiency in business processes, supporting decision making, and analyzing the evolution of business trajectory in all areas to add value and build distinctive capabilities and competitive advantages. In addition to the gains in importance of IS/IT and their management for the business strategy, the pervasiveness and impact of information systems demandsthe acquisition of managerial capabilities and skills necessary to develop a strategic vision, align IS/IT to business models and succeed in the CIO position(Chun & Mooney, 2009; Grover, Seung-Ryul, Kettinger, & Lee, 1993; Jewer & McKay; Karlgaard, 2003; McCue, 2006). According with Durso (2012), the CIO and the technology team has moved into a leadership and integrated role, where soft skills like communication, teamwork and adaptability are much more important.

All the forces mentioned, demand an evolution of the abilities, knowledge, skills and tools that CIOs must master to better support business processes with IS/IT. The literature describing the roles of CIOs in developed countries, particularly North America and Europe, indirectly attach the evolution of the role with the nature of their own economies, where innovation is a must, high tech or technology-intensive industries are common, and therefore coping with the changes and challenges imposed by the market require leaders with technical and managerial knowledge that position him/her at the C-level of organizations. Even so, surveys consistently describe high failure rates in IS/IT implementation, implying that the value added by the responsible for the design and implementation of information architectures has not always achieved the expectations (Sauer, 1993; Simon, 2011) or considered before deciding to embark in an IT-related project(Mehta & Hirschheim, 2007). The CIO role today is not only a resources manager, but also a participative engine in defining the strategy and corporate goals of a company. Sobol and Klein (2009) compared orientations of IT in 93 companies in the U.S. to classify the CIO as Utilitarian (targeting rigid support of operations) or Strategic(encouraging innovative approaches of IT to support long-term goals), and found that financial measures of those firms with a strategic orientation for the CIO tended to be higher. A similar concept is described by Banker et al., (2011), who described the strategic orientation of the CIO as one that is involved in the firm’s strategic planning, versus an operational orientation where the CIO is responsible for the IT functioning, support and managing less risky projects. Assuming an evolution of the CIO profile, in terms of the abilities, skills and knowledge required as described by the literature in this area, our research focus is to discoverwhat is the evolutionary state of the CIO profile in a developing country? Answering this question is important to many economies, where a transition from developing to developed economy is pursued, and part of the strategy is based on the use of information and communication technologies to materialize gains in efficiency and productivity and hence reduce the digital divides.

The ideal CIO profile and its roles have been treated in the literature(Grover, et al., 1993; Karlgaard, 2003; Weil, 2009), but the paths of successful IT leaders, mostly coming from developed countries, are not necessarily true, observable or repeatable in developing countries, where more than 80% of the world’s population live. Particularities of the developing economies and the level of maturity in the development and strategic use of IS/IT seem to demand a more operational visionfrom the CIO, that although complemented with some basic skills in management, do not ensure the participation of IT leaders in defining business strategies, but demand the administration of the resources and budget defined for IT (La Paz, Laengle, & Cancino, 2010).While in the developed countries the academic and professional development of CIOs is derived from a wide array of backgrounds like programming, accounting, psychology, engineering, or sales (McGee, 1998), in developing economies the top IS executive role seems to be performed mostly by professionals with strong technical foundations, and little is known about non-technical abilities necessary for the support of business strategy.

To answer our research question, we revised the literature about CIO profiles to recognize the different types and evolution. With the information at hand, and considering previous classifications and archetypes, we organized the activities and responsibilities that relate to the CIO profile and its evolution in a progressive typology of the abilities of a CIO; then, interviewed 26 CIOs working for important firms in Chile, country accepted in the OECD in 2010. The interviews covered topics such as academic background, work agenda, and key abilities for the job to obtain information oriented to map their profiles in the typology that represents the theoretical evolution of the CIO profile.

2. State of the art

The increasing importance and relevance of the asset ‘information’ along with the means to manage it (computer technologies and networks), impose a new vision of the use of IS/IT. The same resource once seen as a transactional element (data) is today regarded as a strategic business weapon (information and knowledge) that can provide and sustain competitive advantages for companies (Durso, 2012; Weiss & Adams, 2011). The important redirection of the use of IS/IT implies evolution in several ways. First, once IS/IT permeated all areas in organizations, a great percentage of end users required to learn to use technologies; second, new IS/IT were to be designed considering usability and friendliness concepts to facilitate human-computer interactions; third, more data is collected because most areas register their activities and transactions; fourth, a need to coordinate the efforts and investments in IS/IT emerged to ensure that the projects involving technology add value instead of destroy it; fifth, a business model vision about information assets gains relevance to use information for developing competitive advantages; and sixth, a need to align IS/IT resources and platforms with the business processes becomes evident so that the IS implemented become a nervous system that effectively assist the capture and processing of signals relevant to organizations in an environment saturated with data floods and with an increasing availability of systems with different purposes. The evolving and dynamic trends emphasized the role of the person in charge of leading the innovations, but at the same time manifested the demand for new skills and abilities from the IS/IT professionals(Carter, et al., 2011; Chamberlain, 1993; Chun & Mooney, 2009; Feeny, Edwards, & Simpson, 1992; Feeny & Willcocks, 1998; Grover, et al., 1993; Karlgaard, 2003; Laartz, Monnoyer, & Scherdin, 2003; McCue, 2006; Nash, 2008; Peppard, et al., 2011).

Notwithstanding the increasingly shared vision regarding the strategic role of the CIO, issues concerning the effectiveness of IS/IT and their contribution to business value have been also reported (Brynjolfsson & Hitt, 1996; Sobol & Klein, 2009). From technical causes like the difficulty of maintaining costly legacy applications(Welsh, 1991) to problems originating in IS lifecycle administration, such as failure to meet budget, time, and functionality requirements (Ingevaldson, 2009) or unmet performance demands in assisting decision making (Monnoyer, 2003), the symptoms exhibit a lack of vision and understanding of business requirements and the operational dependency of business processes and activities on information systems (Ingevaldson, 2009; Monnoyer, 2003; Nolan & McFarlan, 2005). These types of problems could be partially explained by a poor definition of the fundamentals in the academic formation and career track, undermining the credibility and support for the CIO at the C-level (Enns, Huff, & Golden, 2003; Watson, 2009) and transpiring the perception to end users that many times IT people are more loyal to the technology than to business (Ingevaldson, 2009).The problems described relate in general to inabilities to manage projects(Karanja & Zaveri, 2012), poor business vision (Monnoyer, 2003; Nolan & McFarlan, 2005), and weak credibility and therefore influence at the C-level (Watson, 2009) that at least question the full achievement of an ideal strategic CIO profile, and manifest the performance of an operational/utilitarian type of IT top executive.

Different CIO styles and archetypes are identified in the literature (technologist, professional, paratrooper, consultant, executive, activist, enabler, collaborative, evangelist, innovator, strategist) to represent the available options that a company may consider to incorporate a CIO to the C-Level, according to corporate needs, objectives or maturity (Grover, et al., 1993; Ingevaldson, 2005; McCue, 2006; Penrod, Dolence, & Douglas, 1990). Regardless of the CIO style, several authors recommend that a “renewed” CIO must first be business-oriented and second IT-oriented (Ingevaldson, 2009; Karlgaard, 2003), must think strategically to support decision making (Banker, et al., 2011; Durso, 2012; Kearns & Sabherwal, 2006; Monnoyer & Wilmott, 2005; Nash, 2008; Watson, 2009), understand the business like a CEO (Karlgaard, 2003),and earn trust by demonstrating and communicating contributions to business value, not only by operational availability of information systems, but also through the alignment of the IT strategy to the core business processes (Karlgaard, 2003; McGee, 1998; Mechling, 2009; Monnoyer & Wilmott, 2005; Nash, 2008). Synthesizing the literature review, we found in the 1990s decade, a need and focus on demonstrating the value of technology and its impact in organizations, and on the first prescriptions about the CIO role and profile as a change agent. From the early 2000’s to present, a wide array of roles, profiles and styles are recognized as part of the diverse demand of companies and their needs. The last becomes an important milestone, since it recognizes that the variety of backgrounds and professional paths may have a niche according to the maturity or nature of the organization. In the last 10 years, there is recognition of a generic feature of good CIOs: know and understand the business.Peppard et al. (2011) tied responsibilities assumed by the CIOs and maturity in information leadership capabilities to the optimal configuration of CIO roles for the generation of value from IT investments.

In order to describe the profile evolution documented in the literature, we summarize the contributions of scholars and practitioners published in information systems journals and the descriptions of CIO profiles in a typology of abilities that represent the evolution of the role (Table 1).

Table 1. Typology of evolving abilities for the CIO
IT Orientation / Evolving CIO Role / Function description and archetypes / Authors
Utilitarian / Implement IT to get efficiency in business processes / Strong technical background to implement IT. S/He has to manage IT resources, and gain trust in the organization by providing operational continuity to a technological architecture. Has been identified in previous studies as Technologist, Problem SolverA, or Paratrooper. / Cash, et al. (1992)
Feeny, et al. (1992)
Enns, et al.(2003)
Monnoyer (2003)
Mechling (2009)
Chun & Mooney (2009)
McLean (2010)
Providing IS/IT to support decision making / Integrate IT to business model and design an IS/IT architecture to deliver services. S/He needs to be a good communicator, create partnerships and a team worker. The literature names this type of CIO as Activist, Collaborator, Problem SolverB, Professional, and Enabler. / Feeny, et al. (1992)
Feeny & Willcocks (1998)
Karlgaard (2003)
Ingevaldson (2005)
Sobol & Klein (2009)
Watson (2009)
Strategist / Agent of business transformation for strategy execution / Leader and change agent, capable of conducting processes re-engineering and always doing technological vigilance to consider new opportunities. Recognized as Evangelist, Consultant, and Innovator. / Feeny, et al. (1992)
McCue (2007)
Chun & Mooney (2009)
Willcocks & Griffiths (2010)
Participate in business strategy formulation / Business strategist that see in IT opportunities to capture and sustain competitive advantages, capable of aligning human, technical and financial resources with appropriate governance systems and translate business goals in IT projects. Mentioned in academic manuscripts as Executive, and Strategist. / McGee (1998)
Karlgaard (2003)
Monnoyer & Wilmott (2005)
Kearns & Sabherwal (2006)
McCue (2007)
Nash (2008)
Mechling(2009)
Sobol & Klein (2009)
Watson (2009)
Durso (2012)

A: Solves technical problems; B: Solves business problems

Although this has not been a main topic in research, the literature indirectly identifies elements that ease the paths to transit from a utilitarian to a strategist role. We identified at least three. One is the natural professional development of individuals with the capacity and abilities to take increasing responsibilities and an active strategic position. McCue (2006) describes four types of CIO profiles (paratrooper, executive, professional, consultant) and for all, a common factor is the experience that gives them the corresponding competences to succeed. In an analysis of where good CIOs came from, McGee (1998) documented that it was possible to find CIOs with an array of backgrounds that after years of specialization in IT functions became good performers of the CIO role. She documented that, along with skills in business, management, leadership, problem-solving, and technology skills, their paths to become a CIO in a major company were complemented with ’long hours and bumpy roads’. The knowledge gained about the processes, business model, industry, culture, and history of a company, seems to be a necessary condition to become strategists, and can be best acquired through experience. Under such perspective, experience in IS/IT leading functions would be decisive to learn about strategic aspects o the business, and therefore contribute at the C-Level in strategy formulation.

A second path pursued by many C-level professionals is the graduate education. Karanja and Zaveri (2012), analyzed 1299 instances of IT leaders hires and found that many firms in the US fill the executive position with individuals with a technical background and a business graduate degree. Such approach would indicate that it is significant for becoming a strategist CIO to pursue graduate studies in business and economics to complement technical skills. Perhaps this is the driving force that encourages top universities to create and promote masters and MBA programs with business orientation to IT people. When we examined MBA programs with IT specialization in the most prestigious universitiesobserving top ten programs[1], weobserved how they combine managerial and technical abilities.Programs courses were classified in three main categories (Basic sciences, Management, Business informatics) and sub-classifications. T was possible to identify main emphases on courses in Management (45%) and Business Informatics (52%), and within them, the major topics covered are: Management and economics, Accounting and finance, Soft skills, Process management and operations, and IS fundamentals. A minor emphasis, but present in most MBAs surveyed are Marketing, Knowledge management, Business intelligence, and IT implementation. Finally only present in a few subsets of programs, are Human resources, Governance, Architecture, Security and Online applications. The brief description shows the balance in the development of managerial and informatics abilities that pave the path for strategic performance.

Thirdly, a factor that requires a transit from utilitarian to strategic CIO is given by the business models that produce, need and consume large amounts of data, and rely on technologies to perform efficiently and effectively. In software/hardware producing companies and IT services industries, the Chief executive officer could be regarded as a profile that incorporates the features of a strategic CIO, showing a natural specialization as strategist. The activity sector could be a determinant factor in the orientation of the CIO career, because as in IT industries the role of the CIO as strategist is key for the business development, in other areas the IS/IT is regarded as a commodity and therefore not a differentiating factor that create competitive advantages, demanding hence operational continuity rather that innovation and strategy formulation.