The changing relationship between GM and MIS

on 1 June 2004

The relationship between General Management and Management of Information Systems has considerably changed over the past few years. The structure of companies has changed, information has become strategic and so the relationship between GM and MIS has become tighter.

The relationship between general management and management of information systems in large French corporations has changed over the past few years. These are the findings reported by CIGREF (IT Club for major French companies) and McKinsey following a research project conducted by both organizations.

Among these changes, Mega highlights the changes for MIS, which must confront globalization, relocation and outsourcing. Although this phenomenon may have taken away their sense of technical responsibility, the role played by MIS has brought them closer to GM, and they are prone to participate more closely in the enterprise’s strategy.

To take stock of this issue, Mega has organized a roundtable comprising a specialist in social relations within corporations, Hubert Landier, a representative from the general management of a large entity, Marie Babel, the Assistant General Manager of CNAM TS (French national health insurance fund for salaried employees), and Alexandre Boulgakoff, a manager of information systems at a large corporation, LaSer (Lafayette Services, a subsidiary of the Galeries Lafayette Group).

A changing paradigm

“For the last 20 years, people have been talking about change management within companies. Yet they have not really changed that much,” declares Hubert Landier, who believes that the structure of today’s companies still follows the traditional model, inherited from previous centuries. This structure has four main features:

1. Taylorism, divided into two categories: decision-makers (white-collar workers) and workers (blue-collar workers).
2. The military model, more specifically the one passed down from the Napoleonic period, along with the corresponding vocabulary: “executives”, “troop mobilization”, “tactics”, “strategy” and “economic warfare”.
3. The pyramid hierarchical structure.
4. The production-oriented structure.

This organization reflects the scientific model from the 17th and 18th centuries, based on quantitative and analytical logic that served as the basis for Newton’s and Descartes’ theories. It has remained at this stage, even though science advanced considerably during the 19th century and particularly at the beginning of the 20th century with discoveries of the Heisenberg Uncertainty Principle, advances in biology, complex systems, Chaos Theory and strange attractors (which create order out of disorder) and fuzzy logic (which blurs the distinction between what is inside and what is outside of a whole – a company, in this case).

To react to this new scientific paradigm, corporations require a new model:

“The corporation is a networked, polycellular structure inspired by biology; it revolves around a single culture, a single project,” observes Hubert Landier.

Other socio-economic changes should be considered : the openness of society leaves more room for research, meaning respect for multiple points of view, eliminating clerkships withholding the truth, and respect for minority rights. Furthermore, market logic is replacing administrative logic, with the motto:”May the best person win.”

“Every company should set itself the goal of changing the world,” concludes Hubert Landier.

The CNAM TS example: transparency is essential

For a long time, CNAM TS was a production management company with a mission to produce reimbursements. This is a highly regulated, functional area. Another unique feature of this entity: the decision-maker is the State. In the 1990s, the “medical control of healthcare expenses” system was introduced, which involves accounting for medical quality. Correspondingly, it became necessary to focus on productivity due to the increased volume of data. Furthermore, part of the information system was outsourced to Sésame-Vitale. At the same time, CNAM developed man-machine interface tools to allow certain people to work with the quality component.

A gap appeared in 2000, when CNAM shifted the focus from production to medical usefulness and individual contracts, with increasingly complicated reimbursement methods, whereas it should have been coping with a ? 10 billions deficit (? 30 billions accumulated deficit). As a result, other management and reimbursement methods had to be found. It became necessary to change the information system to meet the need for reactivity and adaptation. “Our information system should be aligned with our strategy, which changed,” insisted Marie Babel. “In today’s context, a new relationship has been established between the MIS and GM: they form a buddy system in which one helps the other.”

La nouvelle organisation se fonde sur une clarification des responsabilités et la gouvernance du système d’information. Le premier point implique de recentrer le DSI sur son cœur de métier afin de répondre aux besoins de l’entreprise ; de s’adapter à la demande des utilisateurs internes et externes (l’Etat et les organismes complémentaires) ; d’être au service du client final, qui est l’assuré social ; de garantir un niveau du système d’information. La gouvernance du système d’information implique que toute l’exploitation pourrait être externalisée ; de repositionner les maîtrises d’ouvrages métiers ; d’intégrer dans les structures de gouvernance les utilisateurs du système d’information.

“The new organization is based on a clarification of responsibilities and governance of the information system. The first point involves shifting the MIS towards its core business, so as to meet the company’s needs, adapt to requests from internal and external users (the State and complementary organizations), serve the end client, who is the welfare recipient, and ensure an adequate level for the information system. Governance of the information system means that the entire operation could be outsourced, to reposition the business owners, to integrate the users of the information system into the governing structures.

“The key to the GM-MIS relationship is partnership. It is founded on the MIS’s credibility and thus understanding of the company’s strategy, on the multi-partner vision and openness to outsiders, on accounting for 110,000 internal users: the work tool should function,” emphasizes Marie Babel, who estimates that “the importance of the MIS is managerial and not technical,” even if technical is an obvious prerequisite. He should know the business processes, the terminology. “In the GM-MIS relationship, there should be clear communication about the risks, lead-times and possibilities,” she concludes.

The experience of LaSer’s MIS: a trusting relationship above all

LaSer is a leading European group in the fields of customer relations management and enhancement, offering services based on six areas of expertise: financial and non-financial services, brand-loyalty, long-distance contacts, points of sale and cards. With 5,000 people, the result of a collection of multiple companies, the corporation changed its MIS three times in less than three years, even though “the information system is a differentiating factor for LaSer,” Alexandre Boulgakoff promises.

The company’s restructuring two years ago involved transforming the job of the MIS and the projects to revamp the information systems. The MIS’s functions changed from a basic level, consisting of “ensuring daily operations”, to an intermediate level involving “controlling, optimizing and industrializing the information system”, to an advanced level of maturity, consisting of “creating value for the company”.

In return, the MIS had the following expectations of GM :

•  that it dedicate more time to the information systems
•  that it acknowledge and trust the MIS more
•  that it get the business managers involved
•  that it take better advantage of the MIS’s intradepartmental knowledge.

“The relationship between the MIS and GM should be one of trust above all else,” states Alexandre Boulgakoff, who expresses this relationship using the equation :

trust = credibility x closeness x 1/risk x value added x shared identical culture

“The things that should constantly be improved,” he comments. “The MIS simultaneously serves as a strategist, a manager, a decision-maker and an integrator.” LaSer’s experience also shows that the MIS, quite the opposite of a “Diafoirus”, is a vehicle of the modern age for his company or organization.