What do you think of dual reports? IT reporting to both the CIO and business management?
I feel dual reporting, for IT managers serving an individual business unit, is difficult to avoid because in a geographically dispersed organization, CIO sits usually at the head office and IT manager sits in the same office as the business head so not only reporting comes into play but also the personal bonding. Nonetheless, on an organogram, IT manager should not be reporting to the business head and it is only the coodination that is the relationship between him and the business head. But because business head is usually a senior designated employee therefore IT manager must listen carefully to his suggestions.
"But whenever possible, outsourcing might be the right solution. "
@hounhosp: I think it still depends on the nature of IT services the business requires. While in most cases outsourcing makes sense, there are cases where companies may be better off having an in-house team because of security reasons or the critical nature of the issues they face.
@Mitch - with regard to dual reports, a business unit CIO dual reporting to the business unit and the organizational CIO works successfully and is frequently implemented. I am not a big fan of organizational CIOs dual reporting. That level CIO should report to the President/CEO.
IT strategy should always be managed internally by the organization. Whether pieces are outsourced/cloud hosted should be determined by the CIO. If business units start outsourcing on their own, you will have a major chaos and possible vendor lock-in with rising costs and no place to turn to.
@Waqas - I think the IT organization needs to maintain proper records. Internal marketing/promoting the value of the IT organization to the business is a critical component of the CIO role. I discuss this in greater detail in my article about CIO roles.
Outsourcing the routine or operational nature IT work is preferrable so is the management of MISs such as SAP or Oracle to specialists. However, there should be enough IT managerial staff supervising the services so that at no point of time the organization becomes dependant on a vendor esp. in the long run.
So often I have seen debates and disagreements between business units regarding method of allocation of IT costs. Business units often complain that IT does not have a proper record of the service utilized by each business and therefore one has to bear the burden of other which is unfair. If outsourcing of services is made, atleast the records of service utilization are ensured by the vendor.
I am not a supporter of decentralization of IT function atleast and Mansur has almost explained all the reasons why it is not desirable. However, in case of geographically dispersed organizations, it is important to allow some sort of decision making to local IT managers. Having said that, those local IT managers should report to a central IT head/VP so that standardization exists and so does centralization.
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