Redouane Bouabid

MIS

Critique to Peter Keens Interview

Peter G.W. Keen, researcher, speaker and advisor to top management has been
interviewed by Omar el Sawy, a Professor of Information and Operations Management on
engaging into conversations between CIOs and CxOs that matter. A statement that is
elaborated by Peter Keen in the interview throughout questions in which he talks about
raising change on CIOs focus, towards controlling operations cost. Furthermore he
introduces the concept of innovation and invention as conversations that do matter and
should be debated by CIO and CxOs before concluding the interview by giving insights on
the profession of IT, the core characteristics of IT professional workers and also on
academics as researchers and teachers.
In fact, Peter Keen claims that IT executives and specialists should care more about
the form to deliver rather than the content. His idea behind this claim is that other
employees or executives, who are not familiar with technical details of IT, should have a
clear, cohesive and understandable idea about the IT. The CIO should then put Information
technologies ahead, in front of every technical detail or process concerning IT that will only
irritate other executives or even frustrate them.
Keens idea is that an IT specialist or executive, as of his initial formation and ideas
and systemic way of thinking, should also have a business perspective and become
business-savvy as Keen said. A CIO should be able to combine his two profiles, the
technical one to discuss the content of the technologies, and the business profile to lead his
team in compliance with the strategic objectives with the company, as well as communicate
in a simple and business-oriented manner his ideas to CXOs. What all CXOs want to
understand from a CIO is the business added-value of the information technologies. The
question for businessmen is not how?, it is rather the what? why? and what will it
bring? Therefore, it is not the fact that CXOs are not interested in IT, but it is rather their
failure to pay attention to technical details due to:

Time constraints of executives

Remoteness of IT departments in terms of communication
Complexity of the content (programming, IS and IT systems)

Because of these many problems that hinder the productivity and comprehensive
integration of all functions in the organizations, the CIOs role throughout the history,
specifically in the last decade, has evolved very much. The CIO is no more a pure IT
specialist, but a business-oriented executive as well. Companies and multinationals have
learnt about the importance of integrating IT to strategies, and Executives started to involve
the CIO in strategic decisions and meetings in order to get insights, new perspectives from
the IT specialist and eventually help accelerate the transformation of the invention to
innovation.

What Keen means from mentioning invention and innovation, is that IT experts,
employees and executives are stigmatized as nave and as employees providing burlesque
technologies that do not have any added value from a pure business perspective. Indeed, in
the history there have been many examples of technological inventions that did not serve
any business purpose or that took so much time to be transformed and put down to reality,
to serve as an added value for companies. Therefore there must be awareness from CIOs
that the main objective, the main goal of any organization is to make profits, and profits
come from innovation, which means an invention that is valuable, that adds value in
business. Michel Porter (1986) adds that the reach of competitiveness is conditioned by
innovation. He claims that this innovation maintains a certain level of competitive
advantages in our instable markets, and that this innovation is key to sustaining such a
competitive locus.
By using innovation, businesses are more likely to enhance their performance and
productivity levels, as well as develop core competencies and side skills that will eventually
benefit the company and improve quality of its products. The survey report of EMC-The
Economist Intelligence Unit (2013,) stresses on the importance of technological innovation
in businesses and in national levels. It point out that investments in research and
development (R&D) as well as physical and human capital, determines the growth dynamics
of businesses and economies and shape competitive opportunities in foreign markets.
Innovation as a technological process is the adoption of new or significantly improved
production methods. These methods may involve changes on equipment or organization of
production. It allows the production of new products for the company or to increase the
efficiency in the production of existing products (OECD, 2004). Innovation can take many
forms. Oslo Manual (OECD, 2004) defines four types of innovation:

Product innovation: the introduction of a new good or service. It includes significant

improvements in technical specifications, components or other functional
characteristics.
Process innovation: the implementation of a new or significantly improved method
of production. This concept implies significant changes in techniques, hardware or
software.
Marketing innovation: the implementation of a new marketing method involving
significant changes in design or packaging, placement, promotion or pricing of a
product or service.
Organizational innovation: the implementation of a new organizational method in
practices, workplace or external working relations.

Mastering innovation allows the entrance of new actors to the market while others
disappear because they have not been able to modernize. Degree of innovation in a sector
therefore determines the level of barriers to entry for new competitors (Bobb & Harris,
2008). However, the managers must keep in mind that innovation calls for structures able to
take technical risks, financial, commercial, human and legal issues. To be innovative
companies must reduce rigidities, power distance among boss and employee etc. In large
structures, the spirit of entrepreneurships and the behavior of entrepreneurs innovation
tend to disappear because of the lack of communication, organizational flexibility, and
freedom of initiative. Traditionally flexible, small businesses are a place of creativity
privileged because of their entrepreneurial organization (Mintzberg, 1983) that encourages

risk-taking associated with innovative projects and provides decision .Innovation is then key
to success of a CIO.
Keen have talked about economic crisis and downturns, specifying that in these
situations companies consider IT and IS are only costs that need to be controlled. He claims
that outsourcing is one of the best decisions for cost cutting, and is an opportunity for IT
departments to focus on their core competency which is Business process management
and cross-functional problem solving (Keen, 2010).
The change that occurred in CIOs focus in the organization is the continuous and
rapid search for innovation. Product life cycles are rapidly shrinking and companies need
new innovative ideas from technological advances to implement and launch in the markets
to make profits. CIOs are more involved with other executives in the strategies of the
organization, and work closely with them to ensure effective communication. They are also
new leaders, creative, thinking outside the box, rather than systemic-thinkers and robots
implementing and programming orders just like they are implementing and programming
new software, which was their label for so many years. The figure below summarizes Keens
insights and depicts the change occurring in the role of CIOs in the past and now.

Before

Alignment
IT Strategy
Investment
Enablingchange
IT Solution
Technology
deployment
IT governance
and structure
Running IT like a
busines

After

Co-evolution
Business
priorities
Value Realisation
Shaping change
Business
Capability
Informationexpl
oitation and
interpretation
IT governance as
behavior
Running IT for
the business

Figure 1: Summary of Role change of a CIO

Personally, I think that looking at IT as a pure cost to be controlled in economic

downturns can be categorized as one-dimensional thinking. Indeed, the Case study adapted
by William Brandel (2009) featuring CISCO emphasized that indeed cost-saving is crucial
during economic downturns, but it should not be directed towards IT (). The case stated that
actually investing in an integrated Information System or ERP, that is fully comprehensive

and controls the whole integrated supply chain is one of the best strategies to win over an
economic downturn. The example the case gives is CISOs win over the huge dotcom bubble
collapsing in the beginning of the 21st century and take strategic decisions to invest in IT to
better control costs over the large supply chain that was going through fluctuations during
the downturn. CISCOs ERP has even helped the company have precise forecasting results,
and display information for all the stakes (suppliers etc.) in order to keep visibility and avoid
additional costs that could be created by bullwhip effects or others.
Consequently, I do agree with Keen (2010) concerning the first rank significance of
Information Technology in tough economic situations. The efficiency, broad reach, and
integration of functions and departments of information systems are a major asset in the
success of a business. Today, an Information System is not only an instrument of
communication and facilitator of operations, but is an important tool for aggregate
management and control of a company, and evaluation of productivity. It is also a precise
element to forecast and gather historical information, like the case of CISO. It became a
strategic instrument providing the means for changing the company's business (Schwalbe,
2000). Therefore, IT and IS should not only be chosen for the basic criteria of performance
of specific actions, or as pure communication platforms, but should take part of adding
value, therefore for the value creation.
As for outsourcing, I agree with Keens (2010) perspective of outsourcing the IT
departments. In our modern economy, each entity is specialized in their core competency
where they have a competitive advantage. Specialization is an economic concept that has
been mentioned more than once by Ricardos theory (1817) of comparative advantages, and
the theory of Heckscher (1919) and Ohlin (1933). Indeed, modern companies have large
product lines. Lets take the example of Unilever that produces products from food to
beauty products (Unilever Website). This company is in front of make-or-buy and
outsourcing decisions, and knows it cannot produce everything in-house. Most of
companies know that they will be incurring additional fixed costs by tackling support
activities that are not in their core competencies. The preference to outsource it to
specialized companies saves millions to companies. Therefore, IT departments will have the
freedom to do what they do best, and companies will no longer have the need to invest in
expensive software and hardware, their maintenance and management.
Outsourcing is an option, but there are also other options as much interesting. Outtasking is one. It is not outsourcing the whole thing, but retaining the capability and outtasking the capability like the figure below demonstrates.

Figure 2: Building the Capability

Figure 3: Out-tasking the capability

As for the cloud services, Keens claims are very insightful. Indeed, cloud services
comply with cost-saving strategies. Because of their model, the user needs to pay for any
usage. Therefore there are not associated fixed capital costs with the cloud. It is said to be a
pay per use model. It is an advantage for the big companies as well as for the start-ups
that do not have cash and capital on hand to invest on IS or IT costs (Garcia-Gomez et al,
2012). However, one must not think of cloud services as a magic bullet. Indeed, the cloud
also has drawbacks and disadvantages. When IT cloud service is outsourced, it could raise
huge security problems if there is not a thorough and comprehensive risk analysis (OKeeffe
& Vanlandingham, 2011). A company outsourcing its IT department will be then depending
on another entity, there will be loss of managerial control and a risk of potential leaks of
confidential information.
In Al Akhawayn University, I have informally interviewed Alumni Saad Bahri, who has
deployed a cloud service for governmental use in fulfillment of his Capstone class. He claims
that when your business is growing, major IT costs will apply if you are not using the cloud.
While with cloud computing, you have the possibility to add as many nodes as you want,
free or with little costs. Saad Bahri, with the support of his capstone team in Al Akhawayn
University has deployed a Cloud service whose aim was to simply Moroccans lives by
implementing a system that will generate papers such as Citizenship, Certificates of birth
etc., without the use of paper and without so many manuscript databases of people in the
administrators offices. He says "in the CRC project, we were aiming to computerize the
citizens' data in order to make the processing of official documents easier. As we cannot
control the growth of the population, we chose to put these data on the cloud, in order to
eliminate the huge additional costs associated with having more and more citizens every
year, with their respective paperwork and archives in offices" (S. Bahri, personal
communication. November 2014). Therefore, his claims support what Keen (2010) said
about the diminishing costs associated with operating a cloud services.
Going back to conversations that matter as Keen stated, in the CIOs job, daily
activities and interactions should be built around issues that matter, that are relevant to the
business. The CIO should give an added value from his insights and perspectives answer
questions and address anomalies in an innovative way, using effective and efficient

communication, which should be part of the organizations internal communication

strategies and tools (Johnson & Lederer, 2005).
In this sense, the CIO should also grow awareness in the employees under his control
in the IT departments. I personally think training and development should be organized for
employees and managers of this department because they lack communication skills
(Grover et al, 1993). The Human Resource perspective states that managers that want to
comply with strategic objectives and be aware of the direction their companies are taking
should be emphasized on in their jobs. In a framework developed by Hackman and Oldham
about Job characteristics, they claim that the Job should provide task significance, should
have an identity and the tasks should be varied in order to create specific psychological
states that in their turn accelerate communication, motivation and performance. The
desired psychological states come from the task characteristics stated above, from
autonomy and from feedback. These states are meaningfulness of work, responsibility for
outcomes, and knowledge of results.

Figure 4: Source: Hackman & Oldham (1975 )

Therefore, a CIO that effectively communicates with the executives and with his
employees, directly, and gives feedback will stimulate a process that will eventually be
profitable for the organization and will create synergy, integration of the processes with the
people and with people of different functions (Hackman & Oldham, 1975).
Keen has failed to consider the internal communication and importance of
communication as a coordinator with all stakes in the company. It is a Success factor
towards ensuring energetic and smooth communication. Managers should not overmanage, or micromanage in the management jargon. Employees should be given
autonomy, but they need to be given feedback. Autonomy and avoiding micromanaging
directly leads to stimulating creativity of employees, who become creative and innovative.

We can see all the implications of an enhanced internal communication of a CIO with his
employees and other executives, as it works as a booster for all aspects of the organization.
Internal communication also implies communicating among each other. Social
networks are the best example of fast and easy to use tools, such as Facebook, MSN, twitter
etc. Indeed, people cannot live nowadays without social networks and use it on a daily basis
to communicate even nonsense. Therefore, a company that is strategically interested into
enhancing its communication internally must make use of the advantages of a social
network in order to lower communication gaps. Using specific IS and IT that are fast and
easy to use make the employee non-reluctant and more likely to use a system that will
eventually create interactivity in the company. As Keen have said, The most performing
companies are users not of IT information technology but CT coordination
technology(Keen, 2007).
A framework developped by Venkatesh and Davis (2000) about the use of IT and its
acceptance from the users found that the IT and IS must be characterized by easiness of use
before users accept it without reluctance to change. Indeed, the model that has been put in
research under various forms using various variables (Venkatesh et al, 2003) has showed
that there are many other factors that can contribute to accepting an Information system,
and using as part of the job to enhance productivity.

The initial model contains two main parts:

Perceived usefulness: This was defined by Fred Davis as "the degree to which
a person believes that using a particular system would enhance his or her job
performance".
Perceived Ease of use: Davis defined this as "the degree to which a person
believes that using a particular system would be free from effort" (Davis
1989).

Keen has failed to emphasize the importance of such characteristics of an IS when

introduced by the CIO, when specifying its requirements before making it, or even when
designing such software. I think that ease of use and usefulness are very important and key
elements towards the success of a CIO, and the success of his choices in the organization.
We can finally say that Keens interview was a success because he has tried to touch
practically all aspects related to CIOs, their relationships with all the stakes in an
organization, the changing environment of business and their job specificities. Although
Keen has not considered some aspects, I think that his interview was fruitful for every one
interested in the matter.

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