MIT Sloan Management Review

Human Resource Management and Industrial Relations, Management of Technology and Innovation

Is Your CIO Adding Value?

By Michael J. Earl and David F. Feeny

April 15, 1994

CHIEF INFORMATION OFFICERS HAVE THE DIFFICULT JOB OF RUNNING A FUNCTION THAT USES A LOT OF RESOURCES BUT THAT OFFERS LITTLE measurable evidence of its value. To make the information systems department an asset to their companies — and to keep their jobs — CIOs should think of their work as adding value in certain key areas. Accordingly, chief executive officers can take a number of steps to aid a CIO’s efforts. This article, based on studies of information systems leaders in sixty organizations, presents a portrait of successful CIOs and the CEOs who support them.

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Many organizations are experiencing a crisis of confidence in their information systems (IS) functions and in the chief information officers (CIOs) who lead them. General managers are tired of being told that information technology (IT) can create competitive advantage and enable business transformation. What they observe and experience are IS project failures, unrelenting hype about IT, and rising information processing costs. Chief executive officers (CEOs) often don’t know how to evaluate the IS function’s performance and the CIO’s contribution. Consequently, radical IS management prescriptions, such as outsourcing and downsizing, are being applied, and CIOs are even being fired.1 Some of these fired CIOs are the same heroes of the IT profession whose photographs not long ago graced the covers of business magazines.

For several years, we have been researching IS leaders, doing extensive interviews with CEOs and CIOs.2 One study examined the factors that determined the relationships between CEOs and CIOs in fourteen organizations.3 A second project focused on the survival of CIOs. Ten matched pairs of surviving and nonsurviving CIOs in different industries were studied.4 In a third investigation, ten CIOs who had been interviewed in a 1986 study were revisited in order to understand their experience and learning over a five-year period.5 All of these studies involved CIOs... To read the complete article, login or sign-up using the form below.

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