Management Information Systems Reaction Paper
Engaging
in CIO-­‐CxO "Conversations that Matter": An Interview with Peter Keen

Done by: Rime OUADI Supervised by: Dr. BENMOUSSA

Table of Contents Introduction: ..................................................................................................................... 3 My reaction: ...................................................................................................................... 3 Conclusion: ........................................................................................................................ 9 References: ...................................................................................................................... 10

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Introduction: Known as “One of the top 100 business gurus in the world and thought leaders with impact” in 2003 according to The Global Speakers Bureau’s website, Dr. Keen is a distinguished international consultant, educator, public speaker and writer in many prestigious universities, such as Harvard, Stanford, The London Business School, and MIT. According to Forbes Magazine, he has been ranked as one of the top 10 IT consultant. Indeed, he is active in several university courses for the purpose of developing new generation leadership in the IT organization. Besides, he has been awarded twice for his contributions to management thought and practice. Dr. Keen is the Chairman of Keen Innovations. In December 2009, Dr. Keen spoke at the ICIS conference about how IS can be converted to what he called “conversations that matter”. In this article, Omar A. EL Sawy interviewed Dr. Keen to deeply analyze that viewpoint for an IT leadership audience.

My reaction: Being an MIS student, I learnt to understand the importance of Information System and how it can be used as a competitive advantage for businesses. Information Technology can be a good tool to use in order to get that competitive advantage; consequently, knowing it is crucial. “Information Technology is a primary contributor to a company's environmental footprint, but if managed the right way can provide solutions that help reduce the environmental footprint of a company, as well as reduce costs.”(Mangal, V. 2009). Dr. Keen was asked to clarify his saying about CxOs (Chief Executive Officiers) are not interested in “IT” (Information Technology). He explained that there is no use for CxOs to know about the technical form, such as servers, standards, and software since thinking about this latest means that something is not working. He gave the example of Facebook and assumes that CIOs can exploit it effectively in many ways as a platform without knowing how it works. Also, he defined CIOs that give more importance to communicating how to get value out of IT rather than the form as value contributors. In others words, CxOs are interested only in the benefits of IT and not in its technical part. Generally, “most CXOs want to go one level deeper than the one at which they operate day to day. For instance, how stable is the technology? How easy is it to use? What is its expected life span, and will there be cost escalations over time?” (Brandel, M. 2004). So, it is CIOs responsibility to teach CxOs what they need to know. Usually, teaching complexities of managing technology projects can be more interesting than teaching technology itself. They must know the benefits of this technology over their business and the drawbacks it may involve. Thus, I agree

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with the idea of CxOs not interested in IT as long as they know what they are doing.

The second question Dr. Keen was asked to answer to is his perception about the changes of the role of t he CIO over the last 30 years in terms of its focus on the operations mission business strategy and the changes that follows in the future. Dr. Keen answered that due to a lack of business communications, IT became a cost to be meticulously controlled for business operations. One way to control that cost and increase net value is outsourcing and insourcing. Also, he considered that outsourcing is the best way to get rid of IT minutiae and to allow organization focus on the core business part of their job. Furthermore, he assumed that skilled CFOs are the ones that concentrate more on the economic structures rather than financial operations. Then, he predicted that “The CIO’s role will change to one that is more of a trusted business technology catalyst, rather than a technology shop manager.” (El Sawy, O. A. 2010). I agree with Dr. Keen’s perception of outsourcing, which is giving away a whole capability to another company in order to do the work for you. In fact, “there is no question, outsourcing has worked” (Bajec, P., & Jakomin, I. 2011). since the costs savings associated with outsourcing are a vital factor in corporations’ ability to maintain profitability and control costs. Concerning outsourcing within the IT field, as stated by Karlsen and Gottschalk, some businesses outsource their IT functions because they cannot deal with the IS or because they encounter difficulties while delivering IT solutions within budget and on time. If an organization does not have the exact IT needed, then it will never get value out of it. Outsourcing IT represents a significant innovation. In fact, “IT outsourcing leads to significant changes in the management processes”. (El Sawy, O. A. 2010). The role of CIOs is to have “a clear direction to guide the information technology (IT) strategic plan, develop a budget, direct decisions related to systems and services, and create a functional IT governance model. The critical need for an institutional strategic plan cannot be emphasized strongly enough” (Armstrong, S., Simer, L., & Spaniol, L. 2011). Also, a CIO should be a good tutor for his employees and transfer knowledge to his subordinates so that these latest can contribute more effectively to the company’s goals. An effective CIO is the one responsible for the well development of future business IT leaders. Darwin John, who has held the CIO post at the FBI believed that “to be successful as a CIO, you need to allocate your time in thirds: one-­‐third to minding the store, a third to working with major customers within the enterprise and the other third focused externally.” (King, J. 2004).

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Besides, recent interviews have been done with twenty four top IT executives and concluded that “the job of CIO is significantly increasing in difficulty and complexity, so much so that one veteran CIO believes it may be too much for a single person to handle.” (King, J. 2004). Concerning the changing roles of CIOs, Weiss and Anderson consider that the role of CIO was created first to allocate responsibility to one executive responsible for an organization’s information processing needs. Another reason is the alignment of IT with the companies’ business objectives, which is crucial for achieving a competitive advantage. Linda Pittenger, president of People3 Inc., a Gartner Inc. company in Bridgewater said that "the role of CIO definitely isn't shrinking. It's changing," (King, J. 2004) and John Moon, CIO of Baxter International Inc. in Deerfield assumed that “The old CIO would be responsible for connecting the systems of an acquired company while today; CIOs are being asked to help govern those new organizations." (King, J. 2004). Also, according to Goodman, a senior vice president and CIO in Louisville, Ky.-­‐based Humana, “the CIO role is definitely expanding; it has to because so much of our operating model depends on IT to enable it." (King, J. 2004). Thus, the CIO “is exposed to a very wide range of issues outside the IT, must be master of a broad array of leadership, must have a wider perspective, and has a window into the drivers of the new economy.” (King, J. 2004). In the third question, Dr. Keen expanded his idea about “conversations that matter”. He thinks that effective conversation is not the one about engaging on social discussion but the one that is worth sharing, questioning and arguing about. Indeed, CIOs should be able to transmit their ideas to subordinates using appropriate language. Then, he believes that the intersection between the CIO/CxO and CIO/researcher and IT professional/educator dialog is one of conversations that matter since these conversations have for purpose to discuss not reversible business decisions that touch the whole firm. CIOs take part of those conversations only if they have something significant and different to add. Pamela Arora, CIO at Perot Systems Corp., an information technology services provider in Plano, Texas says that “as CIO, you are not going to be able to align with company strategy unless you understand it. And you're not going to be able to understand it unless you are part of the business team, that means being invited to meetings to make sure you are fully privy to what is trying to be accomplished, being involved in sales-­‐support efforts and talking with customers to see what some of their needs are." (McClenahen, J.S. 2002).

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Professor Watson also supports that idea and says that “IT leaders emerged from super-­‐technical backgrounds to find a seat at the executive table. Many struggled to communicate their goals and visions to their business counterparts, making them the Rodney Dangerfield of the executive committee.” (Watson, B. P. 2009, February 2). Besides, he stated that, in order to deal with issues and finding ways to handle them, effective conversation must use innovation. Also, he thinks that several IT organizations failed to have effective conversations because of lack of innovation. Watson reflects also on that and assumes that what the organization really needs is not the technology that keeps it humming but CIOs best performance. He highlighted the danger caused by technology invention regarding IT innovative thinking. According to the News&Analysis magazine, “The only way to achieve relevant innovation is through relevant alignment. When IT and the customers IT serves are of common understanding of the business problems at hand and can evaluate and prioritize needs in an organized and structured manner, then successful innovation follows.” In other words, CIOs should show a sense of innovation and uniqueness in their thoughts as well as the way they express those ideas in terms of experience and knowledge in order to bring an added value to the company as a whole.

The fourth question was about conversations that matter in CxO circles related to innovation more than invention. In that question, Dr. Keen believes that “innovation is about invention that can be turned into value.” (El Sawy, O. A. 2010). Meaning, invention must be converted so that it can create a certain value for the business. Thus, It professionals that adopt useless inventions are considered unrealistic professionals. Also, he relates business models that cannot produce value to a lack of realism. Then, he highlighted the fact that an effective conversation should more about innovation than invention. Kahn and Dempsey support Dr. Keen saying and assume that “innovation is one of the key drivers of everything that goes on in business”. (El Sawy, O. A. 2010). To illustrate this idea, he cited the example of RFID (Radio-­‐Frequency Identification), which is “a novel heating method which has great advantages as providing rapid and uniform heating, high heat penetration into food and having high energy efficiency compared to microwave heating.” (çakmak, H., & Tavman, S. 2011). From an IT perspective, as stated by RFID journal website, RFID is “an enabling technology, which means it doesn’t provide much value on its own, but it enables companies to develop applications that create value.” In other words,

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RFID is “the latest technology for automatic identification which allows the transmission of a unique serial wirelessly”. (Uddin, M. J., Ibrahimy, M. I., Reaz, M. I., & Nordin, A. N. 2009). In this interview, Dr. Keen assumed that RFID is good at solving organizations’ issues but yet spent a long time before turning from invention to value creation. I think that new ideas are useless unless they find a way to bring benefit and profit to the business. Furthermore, he pointed out that CxOs should not be interested that much about invention unless value generation is in sake. In fact “only when business value started to become apparent did that become a conversion that mattered for CxOs.” (El Sawy, O. A. 2010).

Then, Dr. Keen was asked to give example of conversations for innovation. Before running to examples, he pointed out the idea that the most effective conversation CIOs must pay attention to is the importance of IT and how it changes the financial structures of the enterprise. Besides, unlike in the past, companies are not obliged to invest on locations since they can adopt an e-­‐commerce strategy to do business. An effective conversation between the CFO and CIO is about opportunities formed by IT rather than costs of IT. To illustrate his idea, Dr. Keen gave several examples, such as Amazon, one of the most popular commercial online businesses. Amazon “was able to build 2 million stores without investing in fixed capital assets.” (El Sawy, O. A. 2010). According to Treanor, Amazon knows how to transform and adequate its business model in order to fit its customers’ needs and wants. Indeed, “Amazon buys technology that enables business transactions and customer relationships.” (Treanor, T. 2010). Amazon keeps this competitive advantage which enables it to always stay in the first places regarding customer satisfaction. Also, invention is a part of Amazon’s strategy as stated by Jeff Bezos, the CEO. In fact, he tries to invent a solution whatever the situation is and assumes that developing a culture of innovation may be more difficult than it seems. So, Amazon attracts new customers and keeps existing ones loyal through innovation and the continuously changing business model. Indeed, “Amazon reported $24 billion in annual revenue, from their 2009 year-­‐end financial results. The Media/book category delivered $5.96 billion, or ¼ of their total revenue. That’s considerably more than any of the largest companies in the traditional print or digital book business.” (Treanor, T. 2010).

The sixth question was about the transformation of cloud computing into a conversation for innovation. “Cloud computing is a rapidly emerging technology

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which involves deployment of various services like software, web services and virtualized infrastructure, as a product on public, private or hybrid clouds on lease basis.” (Kamra, V., Sonawane, K., & Alappanavar, P. 2012). It became a new model for supplying IT services and helps organizations transform their technology and business as a whole. “The emergence of cloud computing is transforming the way organizations purchase and manage computing resources, providing a fundamentally different IT model in which a cloud provider might be responsible for a range of IT activities. The result is that organizations can lower their IT capital expenditures and operating costs by purchasing on demand technology resources while eliminating the need to maintain outdated equipment.” (Garrison, G., Kim, S., & Wakefield, R. L. 2012). Thus, several companies adopted cloud computing to gain a competitive advantage and thus increase profit.

Cloud computing is very important in a business conversation for innovation since it is a new option in IT that brings a change in the way how applications work. “The idea of cloud computing solutions leads mainly to the economic benefits of saving and spending in connection with the purchase and operation of demanding financial solutions to hardware and software”. (Turcaník, M., Harakal, M., & Ockaj, M. 2011). Also, Dr. Keen thinks that the conversation for innovation should be about how cloud computing can affect positively the IT organization.

The seventh question is about how IT professional workers can bring value to the organization and their distinctive competence in the next decade. IT professionals have much strength that can add value to the business. In fact, they have distinct competences in terms of analyzing business processes; understanding scaling and know how to shift from invention to innovation, and they “really understanding data assurance, data integrity and version control.” (El Sawy, O. A. 2010). In other words, the main strength of IT professionals is their analytic way of thinking. “The perception exists that a successful IS professional blends technical knowledge with a sound understanding of the business while commanding effective interpersonal skills.” (Bassellier, G., & Benbasat, I. 2004). However, the most common mistake most IT professionals are faced with is the underestimation of implementing innovation and organizational change. Indeed, new generation of IT professionals are too optimistic about new technologies and assume that minimum efforts can bring high results.

The final question asked by Omar A. EL Sawy was about the meaning of all what have been said above for IS academics as researchers and teachers. In this last question, Dr. Keen presented his overall thoughts and assumed that CIOs are

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different from one another in terms of future vision. Concerning the main idea of the interview, he believes that staying concentrated on “conversations that matter” can be a positive point for the business as a whole. And finally, he thinks that special trainings should be done to next generation of IT leaders so that they can contribute easily on that particular concept.

Conclusion: This interview conducted by Omar A. El Sawy spoke about how IS can be converted to what called “conversations that matter”. Dr. Keen, an international consultant, educator, public speaker and writer answers some questions to deeply analyze that viewpoint. CIOs that communicate to their subordinates how to get value out of IT rather than the form are perceived as value contributors to the firm. CxOs are not interested in the technical part of IT but on the benefits it brings to the company as well as the drawbacks it may involve. Also, CxOs should be clearly aware of the business’s objectives because adopting inadequate information systems will be useless for the company even if this IT is among the latest. However, due to a lack of business communications, IT became a heavy cost for the company that must be carefully controlled. One way to deal with that cost is outsourcing, which is the best way to get rid of IT problems and to allow businesses focus more on the business part of their job. Besides, outsourcing IT should be very well managed since it can be considered as a significant innovation for the company, as stated by Dr. Keen: “IT outsourcing leads to significant changes in the management processes”. Thus, not managing correctly IT outsourcing can be very dangerous for the company’s development. For a better communication within the company, CIOs should use appropriate language to transmit ideas to subordinates. Effective conversation is the one that is worth sharing, questioning and arguing about. The intersection between the CIO/CxO and CIO/researcher and IT professional/educator dialog usually ends up with important results since it has for purpose to discuss not reversible business decisions that affect the company’s business goals. Some organizations failed to have effective conversations because of lack of innovation. Innovation and invention are two different concepts .Dr. Keen believes that “innovation is about invention that can be turned into value.” An effective conversation should more about innovation than invention. Innovation can also be associated with e-­‐ commerce and cloud computing can be a good way to develop this idea. Finally, IT professionals must educate the next generation of IT leaders so that they will contribute also on the “conversations that matter” concept. The future and well development of the company rest on the shoulders of CxOs who will think about business in terms of innovation.

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References: El Sawy, O. A. (2010). ENGAGING IN CIO-­‐CxO "CONVERSATIONS THAT MATTER": AN INTERVIEW WITH PETER KEEN. MIS Quarterly Executive, 9(1), 61-­‐64. Weiss, J. W., & Anderson, J. (2004). CIOs and IT Professionals as Change Agents, Risk and Stakeholder Managers : A Field Study. Engineering Management Journal, 16(2), 13-­‐18. Brandel, M. (2004). EDUCATING YOUR CXOs. Computerworld, 38(30), 31-­‐32. Perelman, D. (2007). CIOs MUST MEAN BUSINESS. Eweek, 24(23), 22. Bajec, P., & Jakomin, I. (2011). THE NEXT BIG OPPORTUNITY TO BUILD COMPETITIVENESS : INTELLIGENT LOGISTICS OUTSOURCING. Transport. Armstrong, S., Simer, L., & Spaniol, L. (2011). Models of technology management at the community college: The role of the chief information. Karlsen, J., & Gottschalk, P. (2006). Project Manager Roles in IT Outsourcing. Engineering Management Journal, 18(1), 3-­‐9. Mangal, V. (2009). Sustainability -­‐ is it for the CIO?. Electronic Green Journal, 1-­‐ 11. Innovation: 5 CIOs speak out. (2007). eWeek, 24(21), 26-­‐30. Watson, B. P. (2009, February 2). Failure to communicate. eWeek. p. 50. çakmak, H., & Tavman, S. (2011). RADIO FREQUENCY SYSTEM AND ITS APPLICATIONS IN FOOD INDUSTRY. GIDA / The Journal Of FOOD, 36(6), 365-­‐372. Uddin, M. J., Ibrahimy, M. I., Reaz, M. I., & Nordin, A. N. (2009). Design and Application of Radio Frequency Identification Systems. European Journal Of Scientific Research, 33(3), 438-­‐453. Kahn, K., & Dempsey, J. L. (2012). An Investigation of Centers for Innovation. International Journal Of Innovation Science, 4(2), 89-­‐100. Treanor, T. (2010). Amazon: Love Them? Hate Them? Let’s Follow the Money. Publishing Research Quarterly, 26(2), 119-­‐128. doi:10.1007/s12109-­‐010-­‐ 9162-­‐7 Breeding, M. (2006). Examples of Web Services-­‐-­‐Amazon and Google. Library Technology Reports, 42(3), 19-­‐26.

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Kamra, V., Sonawane, K., & Alappanavar, P. (2012). CLOUD COMPUTING AND ITS PRICING SCHEMES. International Journal On Computer Science & Engineering, 4(4), 577-­‐581. Turcaník, M., Harakal, M., & Ockaj, M. (2011). IMPACT OF CLOUD COMPUTING SOLUTIONS TO NETWORK ENABLED CAPABILITIES. Proceedings Of The Scientific Conference AFASES, 646-­‐652. GARRISON, G., KIM, S., & WAKEFIELD, R. L. (2012). Success Factors for Deploying Cloud Computing. Communications Of The ACM, 55(9), 62-­‐68. doi:10.1145/2330667.2330685 Bassellier, G., & Benbasat, I. (2004). BUSINESS COMPETENCE OF INFORMATION TECHNOLOGY PROFESSIONALS: CONCEPTUAL DEVELOPMENT AND INFLUENCE ON IT-­‐BUSINESS PARTNERSHIPS. MIS Quarterly, 28(4), 673-­‐6 94. King, J. (2004). THE Wide-­‐Ranging CIO. Computerworld, 38(14), 31-­‐33 McClenahen, J.S. (2002). CIOs SOAR TO STRATEGIC ROLE. Industry Week/JW; 251(7),27. Citing Websites. In RFID Business Applications. Retrieved 2005, from http://www.rfidjournal.com/article/view/1334/1 Citing Websites. In The global speaker bureau. From www.speakers.co.uk

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