Critical Analysis of a Chief Information Officer’s (CIO’s) Strategy
Introduction
The advancements in information technology have revolutionised the way of working of the corporations throughout the world as the information systems have simplified the operations. This essay carries out a critical analysis of the CIO of GE, Jim Flower’s strategy as deciphered from an interview conducted by Computer Weekly(Computerweekly, 2016).
General Electric is a USA based conglomerate operating across multiple product segments like renewable energy, manufacturing, lighting and digital industry to name a few(GE, 2020). Information technology has been adopted by the management of the company initially for keeping up with the trends in the business environment(Informationweek, 2005).
Information technology and digitalisation had been taken up in the company for maintaining records in addition to streamlining communication amongst the departments and the customers.
GE has used ERP software developed by SAP for managing the business operations and allocate the resources of the organisation properly. The organisation had undertaken major projects like CustomerNet for establishing a permanent connection with the clients over the internet(Lea, 2005).
Additionally, IT has been used by the company for creating a sales portal for the customers to place orders online. IT has been used by the firm for improving customer service with the help of VoiceXML.
This essay identifies the themes from the interview consulted with the CIO GE and conducts an analysis of his perspectives. This essay will provide the context of usage of the management information systems in GE in addition to the assessment of issues that require concern of the CIO. Future strategy for the firm has also been identified here.
Body
Innovation and transformation in business
Innovation is the process of undertaking a significant amount of risk to devise solutions for enhancement and simplification of a business process or a product that can be made replicable at an economical cost(Carayannis, et al., 2015). Transformation is the process of bringing change to keep up with the present trends of the industry for remaining competitive(Gabriel & Drayton, 2016).
The business organisations operating in the competitive market are required to innovate their products and services, besides, to ensure that they do not become obsolete and continue to improve themselves for gaining a competitive edge over the rivals. Innovation and transformation have been the cornerstone for achievement and popularity for the company as GE had been operational for more than 120 years(Computerweekly, 2016).
The CEO of GE, Jeff Immelt has been able to recognize the opportunities having potential as well as capitalise on the new information and updates in the industry for transforming the business before the competitors.
The management of GE faced issues related to the implementation of transformation in their business as the company had initially outsourced up to 70% of the information technology operations(Computerweekly, 2016).
This was done as a strategy to reduce the expenses due to IT the domain was not considered as a core part of the business. GE faced issues related to digitalisation in their business as they were unable to initially predict that organisational data and information would be merged.
The innovation strategy of GE is to identify the trends in the market which are shaping business in addition to focusing on the unachievable business goals by coming up with innovative solutions.
Digital transformation at GE is governed by the needs of the customers as well as the quest for establishing synergy amongst the departments(GE, 2020). The CIO of GE suggests that the people working at the position are required to act as an overall business leader and move beyond the confinements of performance and availability which is not agreeable.
However, the CIO stated that it is essential for changing the mentality of the workforce to integrate innovation and change for sustaining the buses operations in the long term which is a positive aspect for a leader.
Internal and external data efficiency through IT systems
The internal and external data efficiency within the IT system of the organisation benefits them in retrieving and protecting crucial data in terms of performing their activities with the highest efficiency(Lloyd, 2017).
The internal data within the IT system comprises of sales, marketing, and finance that enables the establishment in taking control over their operations. Whereas, the external data for the IT system comprises information about the customers and competitors.
Both internal, as well as external data, bring the highest efficiency for the business operations of the IT system because it gathers data from both the sources and uses it to determine future growth strategies for the management. The CIO of GE Jim Fowler states that the internal system of the organisation tries to culminate a new wave of innovation that helps the organisation in transforming the business to increase the efficiency of the IT-enabled task within the business establishment(Computerweekly, 2016).
Furthermore, the CIO of GE business enterprise also focused on eliminating the escalated cost on the IT system along with determining the ways through which the cost reduction policies within the business entity can be implemented so that it controls the overhead expenses in the internal IT system. Previously it has been noticed that GE used to outsource huge chunks of external IT data as because then it was not considered core to the business.
It has been noticed that evaluating the sources of information from the article that previously GE used to outsourced 70% of their IT data from the offshore service provider(Computerweekly, 2016). Examining the IT history of GE business organisation it has been identified that the company was about to transform its IT task to the platform of digitisation.
Adding to his statement Fowler also stated that the company is trying to digitalise all of its business operations so that it offers better opportunities to the firm to increase its efficiency towards IT integrated tasks. The strategy that the CEO of GE enterprise Jim Fowler undertook for themselves includes eliminating the process of outsourcing.
The positive aspect of the theme was that cutting down outsourcing which made IT ill-prepared for the digital transformation. Whereas, the positive point that has been identified is eliminating the threat of outsourcing from GE’s IT system derived next level of the industrial revolution(Computerweekly, 2016).
Investigating the background of the management of information system the CEO should be addressing the important aspect of mind + machines strategy to improve the overall performance of the management.
In house IT and insourcing
The theme which is based on the notion of in house IT and insourcing reflects upon the decision of the CEO to reduce their dependency on external data on outsourcing.
The theme is based upon the idea of developing and strengthening their in house IT system so that they can build competency to perform their overall activities(Senft, et al., 2016).
Evaluating the sources of information from the article important information has been gathered that includes when Jim Fowler become the CIO of GE 18 months ago he was that the IT form used to outsource 75% of GE IT data(Computerweekly, 2016). The CIO also identified that it was due to the fault of the outsourcer that GE was suffering from a broken business process.
Considering the past situation of GE when the company used to outsource the majority of its IT task the CIO took up the decision of strengthening its internal IT process. Fowler argued that obsolescence, performance, and availability are certain kind of traits that every CIO needs to have while they execute their job responsibilities.
The CIO of GE decided insourcing where he changed the mind-set of the internal IT personnel to undertake IT related projects and develop strategies and plans to carry out the process successfully. Examining the IT history of GE it has been noticed that the organisation took up the decision of developing its own IT integrated system to churn out results that suit the overall process of the internal IT organisation(Computerweekly, 2016).
The strategy of the CIO towards the theme was to develop and organise product along with product lines that enable the IT team to focus on the business more tangibly. The CIO also identified that IT people take long-term ownership of the respective products that they develop. Determining the article the issues that have been identified include struggling to improve productivity.
Recently GE acquired $ 915 million of field Service companies to bolster their digital platform. But instead, the firm faced issues of sustaining productivity. The issues of legacy software were also being faced by GE organisation which cost them higher IT costs in terms of driving digital business initiatives(Computerweekly, 2020).
The future strategy that the CIO needs to pursue comprises of implementing a deep learning system within their IT system that will help the management understand the behavior of machines and increase its overall efficiency.
IT legacy
IT legacy is the terminology used to describe the Information Technology and computer systems that are obsolete due to the presence of the availability of upgraded versions(Cassidy, 2016).
The evolution of information and communication technology in a continuous manner in addition to the advancements and simplification of digitisation has resulted in many IT systems and business processes of GE becoming obsolete(GE, 2020).
Previously, the datacentres of the company used to have magnetic tapes for storing data which took almost two hours to change every day in the morning. CIO of the company, in the interview, said that the organisation still has 9,000 applications in the legacy category(Computerweekly, 2016).
The legacy applications of GE are largely non-strategic and are on the process of being removed or replaced by an updated version by the company for the optimization of business processes(Computerweekly, 2016).
The legacy information systems of the company identified as of strategic importance are provided with the maximum portion of the IT budget for transformation. IT legacy is a business problem for GE and has been correctly identified by the CIO of the company. The strategy of the CIO is to get rid of the obsolete applications which cost the company thousands of dollars despite being used by one or two individuals.
The approach of assessing the cost of every application by the CIO is appreciable which enhances the overall sustainability of the business operations and IT systems of the company(Gray, et al., 2016). Treating the legacy IT systems as a wider business problem is justified and would save the overall operational cost of the company.
The digital platform and information systems
The theme that has been underpinned in this section and describes digital platform and information systems it revolves around GE’s digital flagship platform for the industrial internet(Baller, et al., 2016).
Through this theme, it has enabled the IT to analyze and present applications to connect the system and develop a seemingly simple solution to the problem. The organisation spends around $ 250 million on the fasteners to develop 3D models across every GE business platform to identify the problem of duplicity.
Moreover, the CIO of the GE organisation also stated that the adaptation of the 3D model within the organisation will help the engineers to design the products faster. The engineers will also be able to pull in products that will directly meet from other parts of the business(Computerweekly, 2020). Examining the IT history of GE the information that has been gathered from the article is that the CIO of the firm plans to introduce digital threads.
The introduction of the digital thread within the business firm of GE will help the firm in achieving higher productivity internally through the help of different initiatives that include the deduplicating fastener to create commercial products that the organisation of GE is planning to sell them externally.
Considering the strategy of Jim Fowler the CIO of GE the head of GE manufacturing are also reaching out for the manufacturing software system that will support the IT team in regards to building products that can be commercialised by the business venture(Computerweekly, 2016).
Evaluating the history of GE it has also been understanding that the recent acquisition of ServiceMax will help the IT team of Fowler to develop an external support system to create the next great set of applications to run down the operations of the company.
The strategic approach of the CIO towards the theme was to develop internal strength for the IT department of the GE organisation to develop and design IT services that facilitate the overall operations of the organisation and generates the best possible results for the management.
The positive points that have been drawn out are it will significantly grow the competencies of the engineers as a result of which it will gain efficiency(Computerweekly, 2016). Whereas, the negative point that has been identified that it also increases the risk of duplicity that makes it difficult for the business organisation to sustain its IT process for a longer period.
The issues that arise within the IT department of GE includes of risk of application of coding and architecture design that disrupts the operational activity of the management. Based on the identified issue the CIO of GE also needs to focus their attention on developing a coding system so that it can help the IT teams within GE to perform the programming task with higher accountability.
The CIO of GE also focuses on improving the reliability and safety of the IT services that will comprehend the services that will be developed within the organisation of GE to sustain high-performance computing and networking activities.
Conclusion
From the essay, it is concluded that information technology had been initially integrated as a means of keeping records and communicating with the customers at GE. Innovation and transformation of business operations had been crucial for the company for remaining ahead of the competitors wherein information technology had played a crucial role in ensuring coordination amongst the business departments of the company.
The legacy systems of GE rank more than 9,000 in numbers and are on the process of being overhauled for achieving efficiency and minimisation of cost. Evaluating the internal as well as external data efficiency of the GE IT system it has been noticed that it helps in gathering data and then analysing it to determine results that increase the overall activities of the management.
Evaluating further, it has also been noticed that the GE firm is also facing a serious threat from outsourcing as a result of which it is becoming difficult for the management to maintain their IT cost.
Moreover, the strategies of the CIO of GE has also been devised within this report to eliminate outsourcing and strengthening the internal of the GE operations. The future strategies that the business establishment needs to undertake within its business operations include increasing the usage of 3D seismic analysis within their IT operations which will deliver high-performance computing results for the GE organisation.
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