Historically, top-level management realized how difficult it was to invest large fortunes into IT without knowing how it would affect their businesses. However, several CIOs invested heavily in IT with the hope that the investment will play a vital role in the future. A number of these companies collapsed due to business and technology disconnect. During the time of connectivity, companies faced a lot of demands from customers, business partners, regulators and from within. To counteract these demands, businesses needed to turn in a shorter time frame than they had always done before. It was the technology and the internet that had enabled them to counteract these demands. Though there was no technological advancement as it is today, businesses had to manage the demands on a short-term basis. To do this successfully, the technology needed to be aligned through various chains of business.
There have been quite remarkable developments in the IT status in terms of sharing knowledge and implementing the IT infrastructures. However, there still exist gaps, for instance, after implementing a new enterprise application, they find a gap between the supported business processes and what is already in existence. Bridging these gaps require the company to pay for expensive modifications or change the way they conduct business to suit what the IT supports.
The roles of the CIO
There is necessary evidence that information systems (IS) are essential drivers for business efficiency and effectiveness. Organizations interested in exploiting the IS must be ready in providing the leadership necessary for promoting the alignment of business with the IS. There is a common inadequacy of management tools and models to business and IT intrinsic complexity. The role of the CIO becomes critical under such an environment to ensure the implementation of the IS so as to reach interoperability. Today, most CIOs mainly show concern for maintaining, procuring and constructing the IT systems on which business runs. CIOs’ challenge is that they do not command enough decision-making privileges.
Decision-making and corporate governance
Decision-making processes are always complex and time-consuming affairs in an organization. The CEO’s ability to make decisions always faces several influences such as availability and interpretation of information, analysis, emotions, intuition, political awareness, among other factors. The CIO who possesses the IT knowledge and its competitive advantages must provide up-to-date information to the CEO and another senior management team for decision-making purposes. The CIO role cuts across all the departments of an organization. He has a high-value chain visibility. Therefore, the CIO should exploit these opportunities in gathering information from various departments to build a robust and competitive IT platform for an organization. The CIO also plays a vital role in managing potential risks under corporate governance guidelines. Failure to implement and comply with regulatory requirements can lead an organization into trouble. The CIO should be familiar with the regulatory requirements and ensure compliance to protect the business’s competitive edge.
The aligning of business with the IS attempts to ensure that businesses extract real value out of IT. There have been cases of failures, but the integration of businesses with IT created efficiency and effectiveness in business systems. Today, organizations use IT in identifying business opportunities, unifying services across multiple business units, and mitigating potential risks. The key indicators associated with business and IS alignment include reducing costs of operations, maximizing profits, increasing performances, and improving customer care and experience.