Eight Imperatives for the New IT Organization

  • John F. Rockart, Michael J. Earl and Jeanne W. Ross
  • October 15, 1996

Change has become the trademark of the business world in the 1990s. The pace of change is so frenetic that organizational theorists view change management as a critical competency — in some cases, the critical competency — for successful organizations in the future. New customer demands and technological capabilities are causing organizations to undergo transformations that involve redefining their very mission. Not surprisingly, subunits within those organizations, particularly the information technology (IT) function, are also rethinking their roles. The growing importance of information, coupled with the increased distribution of the technology to knowledgeable users, has both IT professionals and business managers reexamining the role of the IT unit. Some wonder whether there will even be a role for the IT function. This article presents our perspective on the future of the IT organization, based on three years of research on IT’s changing role.

Our conclusions are partially drawn from a study of new IT management practices in fifty firms and a comparative study of IT organizations in four countries.1 As part of the latter project, we interviewed IS executives at four large U.S. corporations and twelve European and Japanese companies. Their views on the future of IT organizations in general and, more particularly, their plans and change programs for their organizations, form the basis for our thinking. These CIOs and other IS managers with whom we have discussed the future role of IT offered diverse views of their environments. Most had unique plans for their particular units, but many common themes emerged.

We review these themes first by exploring changes in business and technology that are driving changes in the role and structure of IT units. We then define and discuss eight “imperatives” for IT organizations in responding to these changes. Finally, we suggest the responsibilities that will become core activities of the IT unit and emphasize a major factor necessary to its future success: line management’s assumption of a joint leadership role for IT.

Business Change

Not surprisingly, the CIOs we interviewed said their firms were experiencing an increasingly volatile business environment, driven by greatly intensified global competition, which has major implications for firms. There is less slack time, both in developing new products and in delivering customer orders. Customer satisfaction no longer means just prompt, courteous service; it also means designing products and services to meet individual customer needs. Equally important, costs must continuously go down, not up.