W1D2 Who is Responsible.

 

From your comments in the Discussion, here are some of the answers. There is no right answer that fits all organization sizes and structures.

Subject matter experts from each department
Everyone (all employees)
CIO, CTO, CEO
All managers
Top managers
Line managers
Subject matter expert from each department.
Operations and Finance

It was mentioned that individual users were responsible because they made the system they used work for the company. It is good if everyone takes responsbility. There still needs to be a structure for setting direction and priorities. Beware of the saying "if everyone is reponsible, then no one is responsible".

At the end of this post are three links to optional reading. But first, here is part of the article in the thrid reference. In the Simon and Shuster example, the CEO foresees the diminishing importance of textbooks without digital content. This has happened already. In the next set of paragraphs, John Rockhart states that 50% of investment is in IT. We now know from reading the text book that this figure is much lower due to migration to cloud computing. Rockhart predicted the coming of cloud computing. He provides a good description of the roles of CEO, CIO, and line managers. (Use the third link to get the material below in a better format).

 

Jonathan Newcomb is president and CEO of Simon & Schuster, the publishing operation of Viacom in New York City.

As CEO of Simon & Schuster, I need to understand how information technology is changing our business, and I must ensure that our organization uses technology effectively. Consequently, I spend a lot of my time trying to understand the implications of new technologies, such as the electronic distribution of information products or software programs bundled with books. I also expect my CIO to have a rock-solid business view of technology and my line managers to demonstrate that they understand technology and are using it.

I expect my CIO to have a rock-solid business view of technology and my line managers to demonstrate that they understand technology and are using it.
At Simon & Schuster, information technology is not a back-office operation. It is not systems. It is not telecommunications. It is a valuable source of business solutions, touching virtually every aspect of our company. We ship more than 300 million books a year from more than 4 million square feet of warehouses. The books are created from our portfolio of 350,000 active copyrights, each of which has its own complex intellectual property characteristics, such as royalties, rights, and permissions. We simply could not run our business effectively without robust systems to process orders, manage inventories, track royalties and returns, and perform all the other transaction-oriented tasks involved in publishing.

Like many companies today, we use technology to help us streamline business processes, cut costs, and manage independent work activities better. For instance, in creating a publishing product, authors, editors, and layout designers work in parallel with one another. We are installing an electronic manuscript management system that links their activities in a network and that will, among other benefits, help us control these multiple activities better and get products to market faster.

Unlike many other companies, our company is undergoing, because of information technology, a transformation—beyond just the transaction aspects of our business—in the products we create and the core economics of our business. In fact, today more than a fifth of Simon & Schuster’s revenues come from technology-based products such as CD-ROMs and interactive television. To succeed in our business for the rest of the decade and beyond, we must be able to package and sell ideas, information, and entertainment in whatever format the customer desires—be it a book, a video, a stream of information and graphics over a computer network, or a combination of all three. We must be able to deliver it to customers when they want it, where they want it, and for a competitive price.
It is for this reason that I need to understand technology and what it is capable of doing. That is not to say that I view myself as a technologist. Rather, I focus on the business needs that the technology supports. I don’t need to know about the latest video compression tools. But I want to understand the opportunities video compression may offer Simon & Schuster’s Educational Management Group, which delivers live, interactive television to 3,500 classrooms nationwide. What impact might the technology have on the Educational Management Group’s operations or on the development of new products? How will electronic manuscript management help us carry content produced for one market cost-effectively into other markets? How will we take, for example, software and curriculum material developed for an educational market into consumer markets? With words and pictures in digital form, can we leverage our creative investments across a greater number of new formats and new markets?

To ensure that I am actively involved in the give-and-take of how technology is used in our businesses, the chief information officer at Simon & Schuster reports directly to me. He has a substantial central staff and has dotted-line relationships with chief technology officers in each of our line units. (The chief technology officers report to their business unit leaders.) The CIO attends the operating reviews for all our businesses and works in partnership with line managers and their technology staffs to design and implement systems that best serve Simon & Schuster’s needs and, more important, the needs of our customers. My CIO helps me understand technological advances outside and inside the company and aids me in formulating priorities for technology investments.

I also hold my line managers accountable for technology and make that accountability a part of our regular reporting processes and operating reviews. Line managers must demonstrate a clear understanding of how their own technology programs and products compare with those of their competitors. Technology must figure into their visions for their business: They incorporate technology initiatives into their annual and five-year plans, and those initiatives become part of the management milestones by which they are judged. In other words, technology plays a key role in their strategic thinking, their planning, and, most important, the way they accomplish their goals.

My technology discussions with business unit leaders aren’t always formal. I may have an informal discussion with a business unit leader about a product that could have an impact on his or her business. It may be a competitor’s product or a product that another Simon & Schuster unit is making. (One of my roles is to help cross-pollinate ideas.) For instance, I might tell the head of my interactive television unit about something our school publishing operation is doing and ask if she sees any way to leverage the technology or the concept in her area.

In fact, we discuss technology actively throughout the company. Chief technology officers meet regularly to trade notes on their operations or to talk about new technology products and ideas. Employees and managers from a number of units and from functions within units come together regularly at informal forums to share information about technology they have explored and to discuss how it might be used in other units. For instance, Simon & Schuster has interactive sites on the World Wide Web. We recently drew together employees from across the company in a one-day forum to brainstorm about ways we could market, sell, promote, and deliver products in this new medium. The point is that we want the majority of our employees to be comfortable talking about technology—and to use it.

New ideas for using technology may originate in the business units and flow up to the company’s senior management team or vice versa. In either case, I expect managers to use business criteria to assess technology. The CIO develops multiyear plans with quantifiable objectives for his unit. For instance, he is responsible for setting and reaching rates of return for those systems that are designed to yield cost reductions. Chief technology officers and business leaders also must look at technology investments—whether for systems to help their units be more efficient or for new product initiatives—and treat them as business decisions subject to the same investment thresholds as any other business investment.

 

John F. Rockart is the director of the Center for Information Systems Research at the Massachusetts Institute of Technology’s Sloan School of Management in Cambridge, Massachusetts.

More important than what the CEO knows about information technology is how he and key members of the organization think about it and about their respective roles in ensuring that the organization uses it effectively. The CEO of 1995 must incorporate the capabilities of IT into his “theory of the business,” to use Peter F. Drucker’s term (“The Theory of the Business,” HBR September–October 1994). Equally important, the CEO must see to it that key managers envision their roles appropriately.

Organizations fail because their theory of the business is outdated, Drucker argues. As he puts it, the “assumptions on which the organization has been run no longer fit reality.” Among the key assumptions are those on “markets, customers, competitors, core competencies, mission, and technology” (my emphasis). When the reality underlying the assumptions change, Drucker notes, the organization must incorporate those changes into its theory of the business. In no area are things changing faster today than in information technology. It is a primary job of the CEO to test continually and perhaps change his theory of the business in light of these changes.

In the 1990s, IT has become the fourth major resource available to executives to shape and operate an organization. Companies have managed the other three major resources for years: people, money, and machines. But today IT accounts for more than 50% of the capital-goods dollars spent in the United States. It is time to see IT for what it is: a major resource that—unlike single-purpose machines such as lathes, typewriters, and automobiles—can radically affect the structure of the organization, the way it serves customers, and the way it communicates both internally and externally.
Understanding the importance of the fourth resource and building it into the theory of the business (as well as into strategies and plans) are more important today than ever for the CEO.

First, the capabilities and potential of the technology are increasing more rapidly than ever before. During the past three decades, consumers have received about 30% more computer power each year for the same price. Competition among microprocessor companies and new advances in the technology are accelerating that rate. In communications, the story is similar, if not more striking, as worldwide deregulation, optical fiber, digitization of networks, and the opening up of more of the wireless spectrum are generating even greater increases in cost-effectiveness and capability.

Second, in an increasingly competitive world, IT is critical to the development of more effective operational and management processes. To serve customers well in 1995, companies need to be proficient in a half dozen key areas: reduced cycle times, reduced asset levels (for example, in inventories and people), faster development of new products, improved customer service, increasing empowerment of employees, and increased knowledge sharing and learning. Information technology is a critical resource for accomplishing all those goals.

Third—and perhaps most important with the advent of the “networked age” typified by the Internet, America Online, Prodigy, and the soon-to-debut Microsoft Network—there is now a whole new ball game for ordering and delivering products and services.
The CEO’s own vision is the key. It sets a tone. But CEOs cannot do it all. Our ongoing research of IT management suggests that certain key managers determine how effectively IT will be used within the organization. They are line managers who recognize their responsibility for the success or failure of how the IT resource is used and business-oriented chief information officers.

Only line managers are close enough to their business to see the most effective ways to utilize IT. Only they possess the clout to embed IT into their strategies and to commit the necessary financial resources. The CEO’s vision can be a catalyst, but it can be multiplied manyfold by line managers who see IT as an essential strategic resource. Thus the CEO, in reviewing strategies and plans, should look for and insist on a relevant and robust IT component.

CEOs also should hold line managers responsible for effective implementation of information technology. Although building good information systems is seldom easy, it is far easier than revolutionizing the process by which people work, their roles, reward systems, accounting systems, or the organizational structure—all of which need to be altered to install today’s process-based systems. The heads of IT cannot make such changes. Changes like those are outside of the scope of their responsibility.

The companies that use IT most effectively boast, in addition to good line managers, chief information officers who have a deep understanding of the business and who are therefore capable of building strong working relationships with line management. The CIO’s understanding of technology is a given. But it is through a deep knowledge of the business that the CIO can not only understand what is necessary but also build credibility with line managers—and thus build the ability to influence them to move in appropriate technical directions. The CEO’s choice of a business-savvy, relationship-building CIO is critical.