Is the CIO Obsolete?

By Daniel Gingras

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Increasingly the role of the CIO is being diluted by organizations who simply have no clue as to the full nature of the role, and thus deflate the role by assigning it to individuals who have neither the temperament or the span of control or influence which defines a “true” Chief Information Officer.

It is painfully evident in many of the ads for “so-called” CIO’s we see advertised in most of the on-line job boards or regional newspapers. Requiring “in-depth” knowledge of specific applications or technologies, mean it’s obvious these roles have been defined by someone with no clue of the true nature of the CIO. They see the role as “technical” as opposed to a true business leader and change agent.

Other Articles by Dan Gingras
Reaching for the Brass Ring

It’s Time for New IT Governance Models

The Death of the Internet?

Surviving as the First CIO

It’s not that what they are seeking is wrong, it may be that they really need a technical leader to keep things under control, but don’t call it a CIO.

I used to have a simple metric as to whether the role called “CIO” was in fact strategic, it was a simple question which defined the nature of the role. Tell me where the role reported, and I’ll tell you where it’s focused. If it reported to the CFO, then it was not (in general) strategic, it was a financially focused role, viewed as a “cost of doing business” within the organization.

I have had CFO’s ask me why the head of IT was more important than the head of the Facilities department, explaining: “We can’t operate without computers, but we also can’t operate without the right buildings either.”

What's Next

I’ve been increasingly pessimistic about the growth of the role over the past decade, evidenced by a relatively flat percentage of CIO’s who report at the highest level being stuck at around 40% and showing no movement for years. This means the bulk (60%) of CIO’s are CIOs in title only.

I recently saw some corroboration around my thinking by none other than the famous Jack Welch, former chairman of General Electric in a recent Business Week column titled 'A Twisted Chain of Command,' which I strongly suggest you not only read, but print out and save in a binder

Complaining about the “Rasputin-like dominance of the CFO” in the organization, Welch says “… it’s not going too far to say that chief financial officers, and very often do, wield too much influence within companies. And if it’s not the CFO, it’s the so-called chief administrative officer, who has excessive power, overseeing finance itself, human resources and any number of other staff departments.”

Welch continues, “So why does it happen? With IT, the explanation is easy: It’s an historical hangover. Initially, IT was mainly seen as good for lowering costs and increasing efficiency. In those days, decades ago, there was some logic to having IT report to the CFO. Most good companies, however, took IT out of finance when its broad strategic utility became obvious.”

The question may be more complex than Mr. Welch postulates, because, some, if not all, IT organizations simply have a difficult time rising to the level of what Mr. Welch calls “broad strategic utility." This has caused a crisis in the whole view of technology by business, best illustrated by the infamous Nicholas Carr article 'IT Doesn’t Matter', and his later book, Does IT Matter?

I think Carr has missed the point in a lot of ways, not the least of which is his use of the false analogy, but there’s been enough learned criticism of his work. I do think he has a point however; driven by a number of fundamental problems within organizational structure of many companies, and predicated upon the problem with the role of the CIO in most organizations.

These problems break into really two major classifications: A false or mis-constructed view of the role of the CIO within the organization, and/or the wrong person in the job.

Time for Change

How can we break this cycle? First, we must accept the premise not all IT organizations will be strategic. We don’t need to go as far as Nicholas Carr, but many companies, particularly those in manufacturing, commodities and other industries where the focus is primarily on lowering costs, IT will play a major role by creating efficiencies, but will struggle to rise to the level of “strategic.”

I had indicated in an earlier article “Where does your organization fit?” that few organizations fall into the “strategic” category, and every organization should decide where they fit before they structure their management team.

Secondly, we must truly understand the role of the CIO and we must slot it appropriately in the organization. In addition, we need to hire for this position appropriately.

The true CIO is a senior officer of a company, formulating strategy and a core member of the senior management team. As a peer of the CFO and COO, the attributes necessary for the role do not include his understanding of Microsoft server technology.

If we focus on this, we will be able to effectively use IT within the modern corporation. If we don’t, we will continue the wasteful policies of the past.

Daniel Gingras has been CIO of five major companies and is a partner at Tatum, LLC. , a nationwide professional services organization of senior-level technology and financial executives who take on leadership roles for client companies. He has more than 30 years of IT experience and teaches computer science at Boston University. He can be reached at dan.gingras@tatumllc.com.