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One of the more difficult challenges a CIO may face is whether their CEO understands how to manage the uses of technology. Managing IT can be a difficult challenge for the CEO, but there are certain best practices that can be followed to achieve success and maximize the benefits.

Also See:
Langer Report: The Balanced Scorecard
Langer Report: How to Create Better IT Staff

By Dr. Arthur Langer

What represents a technology mature CEO?

One of the provocative challenges for CIOs today, is whether their CEO understands how to manage the uses of technology. What then represents the technology maturity that a CEO should possess?

When attempting to define CEO best practices to manage technology, one is challenged with the myriad of material that attempts to determine the broad, yet important role of the CEO. As with most best practices, they are typically based on trends and percentages of what most CEOs do-assuming of course that the companies they work for are successful. That is, if their organization is successful, then their practices must be as well. This type of associative thinking leads to what scholars often phrase as "false generalizations." Indeed, these types of inadequate methods lead to false judgments that foster business trends that are misinterpreted as best practices. Reputation is what would better define these trends, which usually after a period of time can become ineffective and unpopular. We must also remember the human element of success-certain individuals succeed based on natural instincts and talent, hard work and drive, etc. These components of success should not be confused with theories that are scalable and replicable to practice; that is what best practices need to accomplish.

This article focuses on technology best practices of the CEO. These best practices will be based on my research, as well as other positions and facts that provide a defendable context of how and why they appear to be effective. Many of the CEO best practices reconcile with my interviews with more than 50 CEOs over the years. Other published definitions and support will be referenced in this discussion.

In February 2002, Hackett Benchworking, a part of Answerthink Corporation, issued its best practices for information technology. Their documentation states: "In compiling its 2002 best practices trend data, Hackett evaluated the effectiveness (quality and value) and efficiency (cost and productivity) of the information technology function across five performance dimensions: strategic alignment with the business; ability to partner with internal and external customers; use of technology; organization; and processes¹." Their findings as they apply to the CEO function provide the following generalizations:

• There was an 85% increase in the number of CIOs that reported directly to the CEO. This increase would suggest that CEOs need to directly manage the CIO function because of its importance to business strategy.


• CEOs that supported outsourcing did not receive the cost cutting results they had hoped. In fact, most break even. This suggests that CEOs should not view outsourcing as a cost-cutting measure, but rather foster its use where there is identifiable business benefits.


• CEOs have found that IT organizations that have centralized operations save more money, have less help-line calls than decentralized organizations, and do not sacrifice service quality. This suggests the CEOs should consider less business-specific support structures especially when they conduct their business at multiple locations.


• CEOs are increasingly depending on the CIO for advice on business improvements using technology. As a result, their view is that IT professionals need advanced business degrees.


• CEOs should know that consistent use of IT standards has enabled firms to trim IT development costs by 41%, which has reduced costs for end-user support and training operations by 17%.


• CEOs need to increase support for risk management. Only 77% of average companies maintain disaster-recovery plans.



Next: Digging Deeper Into Best Practices




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