CIOs no longer just techies in charge of other techies
Elsevier Food International Vol.9, Number 2, May 2006 Len Lewis
Chief information officers, once relegated to the backroom world of in-house technology, are taking on a broad range of new responsibilities ranging from strategic planning and marketing to revenue building and global expansion.
The role of the chief information officer may be one of the most misunderstood of all executive positions these days. Yet, internal and external forces are redefining the post and pushing it centre stage in the corporate arena.
CIOs, once confined to IT matters, are finding new status and even boardroom acceptance within their organisations as a result of broader bottom-line responsibility for everything from technology and security to global expansion and government compliance.
Making changes
“The CIO position has changed drastically,” said, Bob Suh, chief technology strategist for Accenture, Boston, Massachusetts. “Look at what companies need from technology and how they gain access to it. CIOs are no longer just intermediaries. They are in charge of making changes inside a company. They are playing a very strategic role because delivering technology-enabled capability into the core business has become more crucial than ever,” he said.
With retailers like Wal-Mart, Tesco and Metro focusing on the long-term benefits of IT and every retailer trying to stay ahead of rapidly changing consumer and operational trends, CIOs are long past being what one observer called: ”Techies in charge of other techies.” They are members of senior management who are responsible for driving and overseeing such things as outsourcing and regulatory mandates like Sarbanes-Oxley in the US. While some observers feel they have yet to reach the same status as chief financial officers in terms of boardroom activities, companies are recognising that having the right CIO is a real competitive advantage and not just another cost on the balance sheet.
Coming of age
The role of the CIO really started changing eight to ten years ago during the tech boom of the late 1990s and when the tech bubble burst. “It went from a back office function to being central to the business in terms of driving down costs and making the business more productive through the use of technology,” said Abbie Lundberg, senior vice president and editor-in-chief of CIO magazine. “In the past couple of years, there’s been a big shift in the perception and expectations placed on CIOs. It’s gone beyond productivity, efficiency and cost cutting and more towards using technology to growth the top line,” she said.
Clearly, the CIO position came of age during the tech boom of the late 1990s when harnessing and managing knowledge became essential to success and companies worldwide pumped an estimated US$40 billion annually into information technology.
As far back as 1998, major changes were seen among CIOs, according to a survey of CIOs in the United States, the UK, Germany and France by Korn/Ferry International.
Some key trends which hold true today, include the fact that the CIO’s role was moving away from technical planning and implementing and into strategic planning. This also required a major shift in human resources as skill sets associated with the CIO position changed. Toward this end, respondents noted that the ideal resume for a CIO still included technical and engineering qualifications but increasingly required a background in finance, marketing and strategic planning.
However, it was also clear the CIOs surveyed at the time were somewhat ambivalent about the changing nature of their jobs because their training was primarily in engineering and computer sciences and they tend to identify themselves as high-level technical experts.
In the boardroom
In a recent survey of global executives, Korn/Ferry found that about 46 per cent of more than 2,000 respondents felt that the CIO has a role to play on a company’s board of directors. “It has evolved over the years into a segmented position serving both as a primary driver of operational efficiency and change as well as an elite technologist,” noted Richard Spitz, global managing director of Korn/Ferry’s technology market.
However, there is a sharp contrast in the high percentage of executives who believe CIOs should play a role on the board of directors and the number who actually sit on the boards of Fortune 1000 firms. In fact, another recent report indicated that only about eight per cent of North American boards of directors include a former or current CIO.
Part of the reason for this shortfall may be due to a lack of aggressiveness on the part of CIOs. “Make absolutely sure you’re on the hiring team's radar,” said Dora Vell, managing partner of Vell & Associates, an executive search firm. “Attend conferences, speak at industry events, write articles for publications and network with key decision makers,” she recommended.
“With regulatory compliance issues, outsourcing and offshoring, more boards need someone that understands technology and more CIOs are being invited to join,” said Lundberg.
Meanwhile, CIOs are starting to recognise their own value as their responsibilities expand. A study of 300 members by the CIO Executive Council, a prominent group with members in the US, Canada and Australia, 97 per cent said they had direct impact on their organisation’s bottom line and nearly half emphasised that they have greater influence at the executive table due to their expanded roles in managing non-IT businesses. Another 64 per cent reported that they are already immersed in global activities and 82 per cent believe that their organizations and their own careers are benefiting from their access to an international network.
In fact, ten per cent of respondents noted that between ten per cent and 25 per cent of employees directly reporting to them work from a country other than the one in which they are based. Nearly half of respondents also said they have key suppliers in other countries.
Outsourcing experts
“Look at the whole offshore movement. This is a big change and comes at a time when companies in Europe and the US are not only constrained by budgets but also by a lack of technical talent in general. Procuring resources globally is a very complicated journey and in the last five years, CIOs have had to become global sourcing experts,” said Suh. By contrast, seven or eight years ago, most of them felt global sourcing was best left to associates on the manufacturing side of the business,” he said.
Whether the CIO has really become a boardroom position depends largely on the industry. “Many of them go to board meetings because of security and compliance issues although not usually as a member. But IT is being treated as a boardroom-level discussion and those companies who know how to implement and execute quickly will be the ones that will win. It’s a differentiating factor,” he said.
New business acumen
While there is no standard model for the ideal CIO, Suh noted that the best ones are those who may not have the deepest technical expertise but are technically inclined. “The best CIOs are the ones who have spent as much time in business and operations as they have in technology and are intimate with the things needed to run a business. They are also people who know how to get things done and execute properly. Basically, the most successful ones are those who are respected not only for their prowess with technology but for their business acumen.”
Vell noted that the CIO’s only function is not just bridging the gap between business and IT. Rather it is to provide input on a wide variety of topics ranging from financial affairs to marketing strategy.
This may be particularly difficult to achieve in retailing, according to Suh, noting that barriers still exist between merchants and technology. “It’s an odd industry. In some ways, retail is one of the most advanced in technology when it comes to supply chain issues and product coding. This is also an industry which makes legacy systems into a fine art. Companies don’t upgrade as rapidly as they should so systems are more complicated than they need to be,” he said. “Big box retailers have become accustomed to less than perfect systems and have a learned behaviour of not asking as much from IT as they should.” Overall, the CIO is the one to make IT part of the company’s core strategy. But if the CIO has a strategic vision and the CEO is not receptive, then it is a non-starter, according to Suh.
Interestingly, there are still companies out there that think they can do without a CIO. “Most in retail accept a certain level of performance and don’t use information as a tool to leverage their supply chain the way Wal-Mart does. And when they set low expectations, they usually want someone in the CIO job that won’t surprise them,” he said. “I think most of retail is in this place. But then why are they spending one per cent of all revenues on technology.
A collaborative partner
Looking ahead, Suh and others firmly believe that CIOs will have to acquire even more skills in years to come. “In the past, they were largely focused on building systems and supporting applications. But systems are changing to a point where it’s more important to focus on information than applications. The CIO is going to have to be more adept at understanding the value of the information and the value of providing the right information to the right people within an organisation.
“CIOs are going to have to be much better collaborators and influencers in retail. The most successful retail projects are highly collaborative in nature and that’s a skill which should be rallied by the CIO not only within his organisation but across the entire supply chain,” he said.
CIO Skills
| Strong communication skills | |
| Extremely important | 85% |
| Very important | 14% |
| Somewhat important | 1% |
| Fluency in multiple languages | |
| Extremely important | 3% |
| Very important | 7% |
| Somewhat important | 37% |
| Not Very important | 44% |
| Not important | 9% |
| Sensitivity to cultural differences | |
| Extremely important | 41% |
| Very important | 48% |
| Somewhat important | 11% |
| Delegation skills | |
| Extremely important | 38% |
| Very important | 54% |
| Somewhat important | 7% |
| Not very important | 1% |
| Determination | |
| Extremely important | 55% |
| Very important | 36% |
| Somewhat important | 10% |
.jpg)
