How changes in MIS affect the CFO and the CIO.

• Author: Exley, Charles E., Jr.
• Position: Management information systems, chief financial officer, chief information officer - Technology

Change has been a constant throughout history. In fact, change is history. But what makes today's changes different is that the pace of change has rapidly accelerated.

Tom Peters describes the situation this way in his book Thriving on Chaos., "It's a world turned upside down .... No company is safe .... There is no such thing as a solid lead over one's competitors. Too much is changing for anyone to be complacent." Peters cites a staggering statistic: 46 percent of the companies that were listed in the 1980 Fortune 500 no longer exist as independent entities in 1990.

The phenomenon of rapidly accelerating change hurls tremendous challenges at information management.

First, timeliness has become absolutely critical to business success. Because of short product life cycles, a business must be early to market with the best offering. This means that streamlined support logistics are needed to create effective links with suppliers. Flexible information systems are needed to support the expanded flow of product information. And, as information becomes a larger part of the product itself, applications to implement and deliver the product need to be developed quickly.

Second, short product life cycles make it necessary for new products to be of high quality at the time they are introduced. David Kearns, chairman and CEO of Xerox, the 1989 winner of the Malcolm Baldrige National Quality Award, believes that "we are only beginning to fully understand the power of quality as a competitive weapon."

Today, customers are looking not only at the quality of products but at the responsiveness of service and support organizations as well. To respond effectively to customer needs, managers at all levels in the business are demanding more timely access to customer information.

And, third, a short learning curve is critical. Information systems must support business managers in disseminating knowledge necessary for greater productivity at all levels. The information systems manager must provide this knowledge while protecting the organization's considerable investment in its current information

These and other effects of the accelerating rate of change are taking place against a background of increasing globalization of markets. Even those businesses that choose to limit their efforts to domestic markets face new competition from around the globe. in a shrinking world, organizations need systems that support the company's local and international operations. Two examples of such systems are the worldwide order-processing capabilities made possible by Electronic Data Interchange (EDI) and the linking of global financial markets.

New relationships and new ways of working

As Fortune magazine put it in a recent article, "A shrinking world will mean an expanding clock. Managers will have to shape organizations that can respond quickly to developments abroad. As speed and agility become paramount virtues, we will see even more decentralization, with responsibility closer to the operating level.

The aggregate effect of these challenges has brought about new ways of working.

Organizations are flatter. Alliances are formed. Dynamic new work groups spanning several organizational units come together on an ad hoc basis. Such interaction increases the need for effective working relationships among organizations and for enterprise-wide information management capabilities.

Among the most important of these relationships is that between the CFO and the CIO. They complement each other: the CIO knows the existing information resources and the opportunities for improvement offered by advances in technology- the CFO understands the business and the points at which new or more timely information will facilitate major improvements in the conduct of its affairs.

The roles of both the CFO and CIO are changing. According to Peat Marwick's 1989 study, CFOs have an increased influence over operating decisions; they are increasingly involved...