Chapter 13 • Leading the Information Systems Function 553investments, was forecast to have a shortage of about
40,000 workers with IT skill sets due to new federal
government incentive programs for IT investments.
Managing the Business/IT Relationship
If the leader of an IS organization has a CIO position, then
he or she will not be the only person at that level concerned
with IT issues in the business: By appointing a CIO, the
organization is signaling that IT leadership needs to be a
concern of all top managers. However, even when the IS
leader is not in a formal CIO position, many IT decisions
need to be made with input from other senior managers.
The Business/IT relationship therefore needs to be viewed
as a key IT resource, and building and fostering this rela-
tionship needs to begin at “the top” of the IS organization
with the CIO and other IS leaders. The strength of
an organization’s business/IT relationships will also be
heavily dependent on the IS department’s track record for
successfully completing new systems projects as well as
providing computer and communications services.
In organizations with a strong business/IT relation-
ship, IS and business managers collaborate on IT-related
decisions, not just on overseeing a single IT project. They
share common goals and mutual trust, as well as share IT
investment risks. Each IS and business leader respects the
distinctive expertise and competencies of the other.
Researchers have found that four types of horizontal
mechanismshelp build and foster strong business/IT rela-
tionships (see Figure 13.15). Two of these mechanisms
involve formal structures (Brown, 1999).
The most frequently used structural mechanism is an
IS advisory council or steering committee with high-level
business leaders as members. This type of committee is
typically charged with the responsibility of approving and
prioritizing IT investments for an annual budget cycle.
The same committee or a subset of its members may also
be responsible for monitoring the progress of IT projects
of a certain size—meeting on at least a quarterly basis
to reassess the company’s IT application portfolio. A
summary of an IS steering committee’s expanded
responsibilities might therefore include the following:- Review and approve requests for new IT investments.
- Set priorities for IT projects to acquire, design, and
implement application software. - Monitor the progress of IT projects (of a certain size)
against agreed-on timelines and budgets. - Share the responsibility for achieving business value
from IT investments.
Another approach to fostering strong business/IT
relationships is to establish formal integrator role positions
(Brown, 1999). For example, in firms with a centralized IS
organization governance, an IS manager may be designated
to be an account managerresponsible for responding to
the IS needs for a specific business unit. The manager in
this role will often have an office physically adjacent to
business managers in the unit they are supporting. When
the leaders of the business unit meet, their account manager
may be asked to join them.
In the IS organization chart in Chapter 1 (see
Figure 1.2), the three managers in the account manager
roles were at the Vice President level, and they had a dual
reporting relationship: to the CIO and to the business
division they supported. Both the IS and business
managers therefore had input to the account managers’
performance reviews and salaries.
FIGURE 13.15 Four Mechanisms for Business/IT Partnering
Mechanisms for IT-Business Partnering
Mechanism Description
Formal Groups Formally established councils or teams with specific linking or oversight responsibilities for IT
activities (such as IS steering committees)
Formal Roles Individual positions with formal responsibility for linking activities between a central IT unit
and one or more business units (such as IS managers serving as account managers for specific
business units)
Informal Networking
PracticesIntentional activities or practices to link managers in two or more organizational units who may
engage in or impact cross-unit problem-solving (such as physical co-location)
Human Resource
PracticesHuman resource management initiatives to facilitate voluntary cross-unit problem-solving
(such as temporary job rotations, cross-unit input to performance reviews)