Leadership and Processes: A Review of Strategic Initiatives in the Use of Information Technology

Introduction

In the current challenging economic environment it is incumbent upon senior management to play a leadership role in guiding their organization into a relatively unknown future. It will be necessary to develop strategic initiatives for all the major functional activities of the organization, including such areas as purchasing, manufacturing, marketing, and administration. The future survival of organizations is dependent upon senior management’s ability to respond to a challenging environment and to address the needs and expectations of those responsible for successful operations. The generic management functions include planning, organizing, staffing, directing, and controlling. These functions are part of any management role and vary based upon the management level within the corporate hierarchy. A common theme amongst all of these functional activities is the provision of appropriate information to support the many varied but necessary management decisions. Thus, senior management must recognize the importance of establishing strategic initiatives in the use of information technology. Presently, information technology represents “table stakes” rather than a “trump card”. That is, in order to be “in the game” information technology is a necessity.

This manuscript addresses two major strategic initiatives to facilitate senior management’s response to the challenges of the current economic environment. The first strategic initiative presented here relates to the establishment of a senior management structure which will facilitate the exploitation of information technology. This initiative will be operationalized through the establishment of a Chief Information Officer (CIO) role which represents senior management’s official recognition of the importance of data and information as a valuable resource to support management decisions within the organization. The second strategic initiative presented in this manuscript relates to the implementation of a process to facilitate the effective use of this data and information. This initiative will be operationalized through the implementation and use of a cross-functional Enterprise Resource Planning (ERP) system which will radically change (for the better) how management decisions are made and how business processes are carried out within the organization.

The establishment of the CIO position and the implementation of ERP systems are relatively recent phenomena. The CIO position, originally named data processing manager, emerged in the late 1980’s (Bock et al., 1986). Currently, while many large organizations have created the position, the role and how it is carried out is not clear (Hunter, 2007). Capella (2006) reports that CIOs have just 100 days to prove themselves, but there are no generally accepted performance measures. Further, the turnover rate for CIOs remains twice that of CFOs (Capella, 2006). This suggests an unclear understanding at the senior management level as to the role of the CIO.

There is a sequence involved in implementing these two initiatives. To begin, a consensus will be developed at the senior management level that the existence of data and information are to be considered a valuable resource for the organization to establish and maintain competitive advantage. Then a CIO position will be established and a specific individual identified to fill the position. The role to be performed by the individual will be defined and clarified as specifically as possible. Later in this manuscript issues surrounding the lack of clarity of the role, and consequences, will be presented. The main task to be performed by the CIO is that of leadership in the application of information technology for the betterment of the entire organization. While there are many leadership issues to be addressed by the CIO, the one issue which will have a significant impact upon the organization is the initiative related to the implementation of an ERP system. Traditionally, information systems were developed and installed to support current operations and considerable effort was taken to ensure the system reflected current business processes. However, the implementation of an ERP system takes a completely different perspective. The processes of the ERP system are considered “best of breed”. Thus, the implementation of an ERP system represents a significant change in how business processes are carried out and consequently changes the business culture of the organization.