The paradox of information systems: strategic value and low status
Introduction
Information systems (IS) can transform business and revolutionise the way business is conducted. Yet, senior managers and others often perceive the information systems function as having a secondary status within organisations. Information systems are judged in terms of speed of delivery, quality and cost—in the same way as contract cleaning and building maintenance might be judged. These comparisons and measures are not appropriate for a function that can transform business, yet they exist, perhaps, because of the low and inappropriate status attached to the IS function.
Jarvenpaa and Ives (1991) argue that general managers need to be involved in information systems due to the magnitude of expenditure involved, the ability of IS to enable business initiatives such as business process re-engineering, total quality management, globalisation and downsizing, and the weight of evidence which demonstrates that when general managers are not involved in IS, investment is wasted on automating inefficient processes. General managers are more likely to be willing to get involved with functions they perceive as having high status.
In order to investigate this paradox of high impact but low status, it is necessary to be able to describe the status of a function and those within it. Investigating status raises problems of formal definition, and its operationalisation in any study. Status concerns position, rank or importance. Status is an element of power, and while there has been little previous research on IS status, there is work on power—the ability or the authority to do something—which can inform the analysis.
Power is the ability to influence others’ behaviour. Lucas (1984) posits that the IS function “will be powerful” as it displays the characteristics that Hickson et al. (1971) identify as being sources of power. These sources are:
- 1.
High coping with uncertainty—units which help to absorb and control uncertainty should have high power.
- 2.
Low substitutability—easily substituted departments have low power.
- 3.
High workforce pervasiveness and immediacy—these capture the extent to which a department is connected to others and how quickly the rest of the organisation would be affected if the department ceased operating.
- 4.
High interdependence.
Since this work was carried out, the role of the IS function and hence its power (and status) have been affected by a number of countervailing forces. The moves to IS outsourcing may have the effect of reducing IS power. On the other hand, IS becoming increasingly strategic is likely to have increased its power. Similarly, the growth of inter-organisational systems and end-user (distributed) systems may well have had a positive impact in power terms.
This paper investigates one element of power, that is, status. There are a number of aspects to status that can be operationalised. The status of a function may be revealed by its position within the hierarchy and the value of resources given to it. It may be that function status is reflected by that of the function head. For example, the high status of the finance director might be reflected in a place on the board and a large budget. Yet, many indicators of status are more subtle and context-specific. The finance director's allocated space for a large company car, the size of the office and the colour of the chair might all contribute to the aura of a high-status employee. Status provides the power to influence others and control working practices in the organisation. It is unlikely that a group with a low status could transform a business. The effectiveness of the IS function depends, in part, on its power vis-à-vis other departments. As Lucas (1984) argues: “to a large extent, the success of information processing in a firm is dependent on the information services department and its relationship to other departments, managers and users”. There is also an associated issue of credibility. A function that lacks credibility with users and other managers is unlikely to be perceived as one that can effect major change in the organisation.
There is no universal set of status indicators. Status is largely dependent on internal context. For example, a desk by the window in Japan might indicate low status whereas in the West it would generally be considered desirable and thus suggests higher status. Indicators need to be found that participants agree, point to relative status within their particular environment. In this research, these indicators emerge through the study of four organisations, which were investigated using in-depth surveys; they do not necessarily translate between organisations. In exploratory, qualitative research, broad categorisations of status only are possible but this should not be seen as inhibiting the investigation. However, the evidence suggests that information systems (IS) and the supporting information technologies (IT) have crucial importance to the success of each organisation; although this is not reflected in the status of the IS function within these organisations.
This paper also uses evidence from the literature which further demonstrates this paradox. Johnson and Scholes’ (1993) cultural web model is used as a framework for assessing the literature and is also applied to the material obtained through investigating the four organisations. The paper concludes by considering ways of addressing the situation.
Section snippets
The strategic importance of information systems in organisations
We will first review the literature which comments on the strategic importance of information systems in organisations and the status of the IS function. There is a widespread view that IS can play a major strategic role in organisations. Lee and Kim (1996) argue that “the role of IS has changed dramatically over the last three decades, from passive automation or augmentation tool to a strategic, competitive device for transforming organisational structures”. In some business sectors,
Model selection
The assessment of status is largely a matter of judgement and there is no prescriptive method for assessing that of IS/IT. Though the subjective nature of status assessment is problematic, it is the purpose of this paper to question rather than resolve the contradiction between the capability of information systems to transform organisations and the status of the IS/IT function. The study, based mainly on four organisations, is largely qualitative because there are no quantitative indicators of
Perceptions of the information systems function
The literature is reviewed through each strand of the cultural web.
Research method
Having explored the elements of the cultural web in an IS context, we wished to assess the status of the information systems function as represented in organisational life using empirical evidence. We first designed a questionnaire and this was sent to 120 organisations. This attempted to reveal the status of the IS function as evidenced by elements such as size, structure, job titles and responsibilities. However, this provided a shallow analysis, ranking the status of IS/IT in terms of easily
Strategic value and low status?
A convenient and purposeful sample was chosen, providing good contact with a variety of organisations in the following four different industries.
(a) The aviation company (Aviation Co): Aviation Co is part of a portfolio management organisation. It manufacturers aircraft and supports and upgrades existing fleets. It has 2500 employees at their manufacturing site. The parent organisation has an annual turnover in the region of £3,500 M of which Aviation Co forms £250–300 M.
The transforming
Discussion and conclusions
A variety of experiences might be expected from each of the four cases. Some differences were startling, for example, representation in the executive and the extent of storytelling. Other differences were less apparent, for example, in controlling the IS budget, though the IS group in one organisation did not influence the setting of the budget. This leaves little room for general conclusions and this was not the intention given the exploratory nature of the research. However, the investigation
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