CIOs Taking on More Strategic Role, Talent in Demand
Chief Information Officers (CIOs) have assumed a more centralized planning function in companies, according to SearchCIO.com, citing a new Forrester Research study. The study also shows that as the IT function has taken on a more strategic role, the CIO more often reports to the chief executive. The report quotes Bobby Cameron, Principal Analyst at Forrester Research, as saying, “It reflects an increased awareness of the value of IT and the impact on other parts of the business.” Cameron concludes this trend puts IT, which is becoming increasingly operational and strategic and less of a pure expense, close to the seat of power and business strategy. Moreover, CIOs are under increasing pressure to reduce operational costs, such as energy consumption, without losing such strategic perspective.
Thus, the bar has been raised for the CIO. In fact, CEO’s have big expectations for IT executives, according to InformationWeek research. The report shows companies are demanding more than infrastructure management from CIOs and their IT organizations, including “leadership, effectiveness, vision, help with optimizing business processes, and insight into new areas of growth.” As a result, executive search firm, A.E. Feldman, says doors are opening for CIOs with the operational expertise and ability to drive enterprise transformation, and facilitate collaboration and innovation within an enterprise.
Most recently, Citigroup announced the appointment of Marty Lippert as Chief Information Officer, and Corporate Operations and Technology Chief Operating Officer. Citi says Lipper will play a critical role in driving transformational change across Citi’s newly centralized Global Technology and Operations divisions. He will also join the Citi Senior Leadership Committee.
Citigroup’s CEO Vikram Pandit hopes Lippert will help lead what he calls one of the great turnarounds in U.S. corporate history. “In today’s global environment, our competitiveness is dependent on having leading technology and operational capabilities,” said Pandit. “Marty’s appointment emphasizes the importance we place on technology in driving enterprise transformation, and we’ll look to him to be a key architect of that change.”
Rising Awareness of the Value of IT
In the latest Forrester survey, which polled 503 CIOs, 34% of CEOs were the direct bosses of CIOs - a significant increase from just three years ago, according to SearchCIO.com. “If you look at what the drivers are in this shift, you see an increased awareness of the value of IT and its impact on other parts of the business. The various officers in the reporting relationships, CEO, president, COO and business-unit heads, indicate that they’re interested in having a more direct relationship with the technology,” said Cameron.
The Forrester study also shows that IT budgets as a percentage of company revenue are largest (6.6%) at firms where the CIO reports to the CEO, reports SearcCIO.com. According to the report, CIOs who report to CEOs are most likely to have a centralized planning role. Interactions between IT and the business at these firms are managed “with more structure.” As a result, firms where the CIO reported to the CEO were “among the strongest in centralized IT capabilities,” such as vendor management and project or program management offices (PMOs).
Evolving Role of the CIO
CIOs have a chance to drive the agenda because they’re at the center of the most important trends in business today: digitization and globalization, according to Information Week.
A recent Wisconsin Technology Network report quotes IBM CIO, Mark Hennessy, as saying that technology leadership is not just about understanding business strategy, but setting that strategy and executing it on a global basis. Hennessy also contends that innovations which drive integration and collaboration are part of an ongoing process, and one that CIOs can take the lead on.
WTN says Hennessy believes CIOs are well positioned to drive innovation for two basic reasons:
- They have the unique vantage point of viewing the business from end to end and knowing the location of customer service connection points.
- They know the tools and the processes that drive collaboration. Part of the CIO leadership role, he said, is to give staff the tools they need to drive innovation
CIOs Going Green
Right now as measuring, reducing and investing in energy efficiencies become a key priority in a growing number of boardrooms, CIOs are also under increasing pressure to reduce energy consumption without losing strategic perspective. The National Association of State Chief Information Officers (NASCIO) believes CIOs should be on the frontlines of corporate environmental programs and policies.
Computer Weekly quotes Director at IT specialist financial investment firm CIO Plus (and former CIO), Chris Billmore, as saying, “The recession is the perfect time for CIOs to rewrite budget proposals to take in green issues to win over company boards.” According to Billmore, doing so could sway decisions on budget requests in their favor because boards are increasingly concerned about green issues due to their effect on how firms are perceived by shareholders, customers, staff and prospective employees - all of which affect share price. Billmore adds there are few parts of an organization where CIOs do not have a role to play in “greening” the firm because it is a natural extension to their traditional role, according to Computer Weekly.
Moreover, a survey of 280 IT executives conducted by CIO.com shows two primary factors driving change: cost-cutting efforts related to energy efficiency and efforts to be more socially responsible, including “green” initiatives dedicated to environmental sustainability.
More than half of the IT executives surveyed (55%), say their organization has at least one corporate social responsibility program that includes “green” initiatives dedicated to environmental sustainability while another 25% are beginning to address the issue.
“Most organizations could double their energy efficiency by 2012 if they just tried,” says William Forrest, Associate Principal for IT at McKinsey. Industry Experts say green initiatives, particularly data center efficiency, should be a priority for the potential cost savings alone, and CIOs must be held accountable. Additionally, the CIO function can bridge the communication and technology gap which currently exists in many organizations between the facilities function (responsible for energy infrastructure) and the technology function.
A.E. Feldman’s Technology Division is one step ahead of industry trends and developments. The firm also has a team of experts already working with a number of firms to identify and place qualified professionals who can design and implement strategies for maximizing energy efficiency. For more information on these issues or job opportunities in IT, please contact A.E. Feldman’s President, Mitch Feldman or the firm’s expert recruiting team here.
