We've discussed previously how CIO's are influenced by their historical background and by the business environments in which they work in. But it goes without saying that their role of CIO is also many times affected significantly by the reporting relationships. We will discuss how:
- Chief Financial Officer (CFO)
- Super CIO
- CEO & COO
- Board of Directors & Other Business Units
…Impact a CIO's role within an organization.
We'll begin with the Chief Financial Officer (CFO). The CIO that reports to a CFO is typically part of the administrative side of the business, and is always expected to focus on cost reduction as a key strategy for the IT organization. The utility role of the CIO is a key expectation of the CFO, as it is for his direct reports in Finance, HR, Facilities, and related administrative business functions. In some instances, the CFO has overshadowed or eliminated the CIO role and has subsumed the responsibilities entailed. This is done partly to reduce costs and partly because the CFO wishes to drive the IT agenda directly.
The role of a Super-CIO. A business unit or divisional business model typically drives the CIO that resides in this environment, within which either a centralized and decentralized IT model can exist. Take as an example, two CIO's, one working for Lucent and the second CIO for HP. The experiences will differ somewhat due to the varying business climates.
For HP, decisions about business independence directly affected the degree of incorporation within the HP corporate infrastructure (that is, the adoption of all HP systems, the use of HP networks, HP email, and so on.). As an independent business unit, these adoptions were deemed unnecessary, but as an integrated division of HP, they became absolutes. The strategies adopted by the parent directly affected the IT practices needed. It began as an independent company and then migrated into a divisional operation, then that same division was spun off for sale. At Lucent, peers faced a more difficult reduction and downsizing scenario, and their focus was clearly consolidation and cost reduction.
Higher authorities and the current business climates clearly drove the role of the CIO at both HP and Lucent. The need to collaborate with the various centralized IT organizations, as well as the various business units supported by them, was paramount to their success. The super CIO's in these environments were absolutely expected to be business aligned and focused exclusively on strategy as opposed to execution.
The Chief Executive Officer (CEO) and Chief Operating Officer (COO). The CIO that reports to either the CEO or COO possesses a higher degree of freedom and responsibility than a comparable CIO that reports to the CFO. The CEO/COO usually has a broader base of responsibilities for the overall business and the CIO is expected to play an equally critical role in applying IT strategies to assist the CEO/COO's directions to the fullest. In this reporting relationship, the CIO's role is focused on managing a project portfolio for business results, instead of whether those projects are within a given time line or within budget. These CIO's are expected to work very closely with other business units, including the CFO, to ensure that projects are selected to bring the highest value to the corporation.
In particular, the CIO who reports to the CEO differs from other IT executives in two significant ways: The corporate role is more centered on business issues, yet they are far less likely to find themselves focusing on correcting misalignment between the IT environment and the business. It may be that the reporting relationship has helped to create, or is a sign of, a better-aligned IT function.
Board of Directors & Business Units. CIO reporting relationships to other entities are a rarity in most corporations today. The exception that stands out most significantly is that of the reporting relationships at for instance, Cisco, where the CIO reported to the executive responsible for services. This was clearly intended to build a customer service environment that utilized all the latest technologies available for the Internet, and led to a breakthrough application that enabled Cisco to provide the optimum interaction with their customers while reducing the need for direct contact.
Another example is the CIO for 3Com, who reported to the Chairman of the Board and possessed the highest degree of business focus. The strategies and associated activities resemble those of a CEO. This brand of CIO must develop and have the ability to create and manage the highest level of external and internal relationships.
Regardless of whom a CIO reports to the current economic downturn has created a crisis.A crisis for IT professionals as business leaders begin to question the value of the investments they have made in technology. The downsizing of IT organizations, initiatives, and salaries, as well as the role of IT executives in the overall business, has placed the CIO at a critical juncture in the brief history of the position.
The CIO overall is the gatekeeper of the company's intellectual assets and operational resources, who is generally taken for granted when things go well and blamed when things go badly. It is a career that no one should ever seek, yet so many cherish, seated at the center of institutions' failures and successes.
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