CEOs CIOs not in Sync

Lead Analyst: Cal Braunstein

According to a post on the Harvard Business Review blog CEOs and CIOs are not in sync when it comes to the new challenges and issues CEOs are facing. Study findings point to the fact that CIOs do not understand where the business needs to go, and CIOs do not have a strategy to address business challenges or opportunities.

Focal Points:

• Key findings from their research are almost half of the CEOs feel IT should be a commodity service purchased as needed. Almost half of the CEOs rate their CIOs negatively in terms of understanding the business and how to apply IT in new ways to the business. Only 25 percent of executives felt their CIOs were performing above their peers. Moreover, 57 percent of CEOs expect their IT function to change significantly over the next three years, while 12 percent predict a "complete overhaul" of IT.
• The above findings are attributed to four trends that are changing the CIOs role. Many CEOs are moving away from ownership and return on assets or investment (ROA or ROI) analyses and are thinking about renting IT equipment for items not directly tied to value creation. The shift from efficiency and scalability to agility and efficacy translates into a movement away from transactional systems to new systems that provide agility, collaboration, and transparency. Thirdly, the boundaries between contractors, channels, customers, partners, staff, suppliers, and even competitors are diminishing and in some cases disappearing, creating a whole new user community for enterprise IT systems. All of this changes how companies manage and organize work and resources, which suggests the need for more unique, niche applications with integration of information and systems across organizational and agent boundaries.
• In summary it states there new systems, business and delivery models, types of information, technologies, and whole new roles for IT in the enterprise's ecosystem. These new business insights, tied to the emergence of new technologies, are creating an opportunity for IT to lead business transformational efforts, creating new business models, initiating new business processes and making the enterprise agile in this challenging economic environment, the report concludes.

RFG POV: Business executives that think IT should be a commodity service purchased as needed do not perceive IT as a business differentiator. That is problematic for their businesses and for IT executives that work for them. IT executives in those organizations need to enlighten the business executives on the flaws in their thinking. As to the four trends identified, RFG and other studies have also found these to be true, which is why RFG has been pushing for IT executives to transform their operations. Business and IT always exist in a state of change, including disruptive innovation, and the next decade will be no different. IT executives must work with business executives to help transform the business and expose them to new process possibilities that are available due to the emerging technologies. IT executives must believe (and pursue) their role is to sell the business – e.g., sell cereal if they work for Kellogg's – and not be a "tech head" if they want a seat at the business table.