The Interaction between IS and Business Units in Setting IS Standards

Judith R. Gordon, Associate Professor of Management, Boston College, and Steven Gordon, Associate Professor of Management, Babson College

8/29/2008
(Original Publish Date: 10/1/1997)

In this paper we examine the process of setting and enforcing standards for information technology and systems in companies having multiple business units. Unique challenges to this process include managing the extent to which standards should be set; dealing with language, cultural, and geographical differences; the choice of centralization or decentralization of standardization; the alignment of IT and organizational strategies and their impact on standards; and the role of organizational structure in handling standards. Within these challenges of the marketplace, companies with multiple business units have demonstrated a focus on the primacy of the business units in the delivery of information systems services. This paper attempts to delineate the role that business units play in the standard setting and enforcement process. We report the results of a pilot study that, among other issues of IS service delivery, examined the nature of the setting and enforcing of standards within eight Fortune 500 manufacturing companies. The study answers three questions: (1) What prototypes describe the IT-business interaction with regard to standards? (2) What are the advantages and disadvantages of each prototype? and (3) What are the outcomes of these approaches to standard setting? This paper concludes with a set of implications and conclusions that highlight lessons for CIOs and general managers regarding developing effective relationships in the setting and maintaining of standards.