I am often amused by the heated debates about the future, or not, of the CIO. The fun comes from the combination of intense emotions, arguments heroically generalised from limited data and the dismissal of evidence which does not fit preconceived ideas. Before I attempt to set out my views on the role of the CIO let me try to eliminate some of the noise and confusion.
Is the CIO really that unique?
Some of the issues raised in these debates are common to all functions and not just IT.
- CXO titles are just labels - Every enterprise needs to develop an organisation structure, including senior management roles, which best supports its strategy. None of the chief officer roles we are so familiar with are a given and, if you examine the fine details, each of these roles is unique to the organisation and the holder of the office. There are some conventions and common elements and the CXO titles provide a convenient label for similar roles. For example CFOs lead the financial discipline within their organisation and are responsible for designing, implementing and assuring the framework for sound financial management. In particular organisations the CFO may also be accountable for other functions such as facilities and audit or maybe IT. A CFO may only be responsible for a division of a much larger business and be the peer of several other CFOs. The same is true of the CEO, COO, CIO and others. In any discussion of the rights, wrongs and future of the CIO it is helpful to acknowledge that it is often just a convenient label for a particular role in a particular organisation and all of the variants that are considered or anticipated in the debates are probably already in place somewhere today.
- All CXO roles include strategic and operational accountability - Some of the CIO commentators suggest that CIOs should distance themselves from day to day operations and focus on strategy. In practice very few CIOs or other CXOs ever need to face this question. If their operations are stable and under control they will give their attention to strategic matters. If IT has major failures, aged debt is spiralling or an industrial dispute interrupts production you can be sure the relevant officer will be spending a considerable amount of their attention on operational matters and, if not, their peer group will soon point out their omission.
- CXO roles rely on influence rather than control - Most spending decisions are made by business unit managers not the CFO or their direct reports. Most staff do not report to the head of HR. Likewise an effective CIO does not need direct control of all IT spending and all IT resources in order to deliver great IT services to the business and its customers. IT spending by the CMO and other CXOs is not a cause for concern.
- CXO roles are not threatened by outsourcing - Although some types of IT outsourcing do require special management attention a lot of media discussion about outsourcing neglects the fact that almost everything that happens in every corporation is performed under contract by an external party. Permanent staff work under contract, sometimes with limited terms. Examine any “internal” IT function and you are likely to find that a significant number of staff are contractors and almost all of the IT equipment and most of the software will be sourced externally. This has been the case for decades. At any point in time a senior post in one of the corporate functions is likely to be filled by an interim. CXOs, including CIOs, are accountable for making sure the whole ecosystem works, not just a subset which carries an “internal” label.
- All CXOs have to deal with change at a breakneck speed - IT attracts a lot of attention due to the pace of technological advances. Product life-cycles for IT are very short and market prices decline rapidly. In practice the situation for CIOs is not so different from their peers. One reason is that the pace of IT adoption in corporations is much slower than vendor catalogues might suggest. Some surveys indicate that the decade old Windows XP has the highest market share in PC operating systems and many companies are still trying to establish migration paths from mainframes and 25 year old software systems which are critical to their operations. Another reason is that fast change impacts other functions as well. COOs and CMOs in many sectors have to work with product life-cycles that are as short as that for IT and CEOs and CFOs in many industries have to deal with changing regulations and react to external shocks without the advanced warning that, in most cases, CIOs can rely upon.
IT can only happen to a CIO
This leaves a small number of topics which are relevant for discussing the CIO role but which may not be relevant for C-suite roles in general.
- The CIO label has a silent “T” - Almost all CIOs would be more accurately described as Chief Information-Technology Officers. They are accountable for telecommunication networks, computers, software and associated technical services. Clearly they must be involved in the design of information systems but other executives have equal or more accountability for ensuring the enterprise has the information it needs and uses it well. For organisations that you know well think about which executives take the lead in the content of the annual report, product designs, demand forecasts, production schedules and inventory. There are so few CIOs who do not have CITO role descriptions or do not act like CITOs that they should be discussed on an individual basis. Any general discussions about CIOs which forget the silent “T” e.g. debates about Chief Innovation Officers and the like, are probably a waste of time.
- CTOs are often not associated with IT - IT is very important but commentators often forget that other types of technology are also important. In some businesses the CTO is concerned with fluids, optics, heat, chemical reactions and mechanical stress and would think it odd that they should concern themselves with data architectures and the strategy for ERP - they would think it natural to consult the CIO about these issues. In some businesses the CTO is very interested in IT as the business provides IT products and services to its customers but they are just as likely to report to the COO or CEO as they are to the CIO. It is very important for organisations to consider these relationships and how different roles can best support the business but sometimes the public debates in relation to the CIO are undermined because some of these subtleties are ignored.
- Cloud computing, “Bring your own device”, Consumerisation etc do not fundamentally change the role of the CIO - There are comments about outsourcing, the pace of change and the balance between CXO influence and control earlier in this blog. Cloud computing and other trends definitely introduce new requirements or new solutions and CIOs need to consider these as part of the IT ecosystem which they manage on behalf of the business. However, none of these new trends fundamentally change the CIO role and few introduce considerations which other CXOs have not already dealt with. For example, consider businesses which have particularly high or critical electricity demands. These could include railways, minerals firms and even cloud computing providers. Even though they can get flexible access to cheap power through the grid, these businesses put a lot of thought into their electricity supply ecosystem. They will have access to more than one utility supplier together with selective on-premise generation using fossil fuels. They will use or will be actively investigating micro generation, renewables and energy recovery technologies and also financial instruments to hedge against price changes. Why should the availability of cheap and flexible utility scale cloud computing mean that businesses which are critically dependent on IT should stop thinking very carefully about their IT ecosystem? They might decide it deserves CXO level attention!
Be nice to your CIO - you are going to need their help
It may seem that there is little left to discuss. I think that would be the wrong conclusion to draw. Each organisation is unique and so executives would be wise to seek, challenge and adapt ideas from a wide range of sources so that they can attempt to fine tune their particular organisation and the executive roles. There is also one IT topic left which originates in discussions about the CIO but may end up impacting the whole of the C-suite significantly.
- Enterprise IT services have rapidly extended beyond the boundaries of the enterprise - Relatively recently equipment and telecoms prices reached a level which allowed wide spread consumer computing. In the last few years prices have reached levels where it is possible to include networked computing in almost any consumer device. Although people are already taking this change for granted it has not yet reached its conclusion. It is possible to see increasing digital content in almost all product categories. Some product categories have been replaced by digital alternatives but even where this is physically impossible market place changes, such as web facilitated sharing, could be just as disruptive to the businesses involved.
Businesses need to give just as much attention to this kind of “action technology” as they have been giving to “information technology”. We don’t yet have any Chief Action Officers so instead CIOs have been adding marketing, retail, customer service and R&D to their portfolios alongside the traditional back office requirements from finance, HR and manufacturing. Often these new areas demand much higher levels of service than the IT function has been used to providing.
For some small organisations these new demands will be balanced by more powerful IT services and management tools and you will still find a single, busy CIO in charge (who is possibly the part-time head of procurement, facilities and HR too). Larger organisations would be wise to review the portfolio of accountabilities across their executive team and make changes to balance the load and make sure critical risks are not over looked (as Starbucks has done). Some high-technology organisations already distinguish between “action technology” and “information technology” covered by two executives. Others are developing their people to make more aspects of IT part of general business management, just as many aspects of finance, procurement and HR already are, with a head of function at executive level.
And the winner is…
To close this post here are my answers to some of the common questions in the CIO role debates:
- Is the CIO role going to change? - Of course. It has regularly over the last 30 years and the rise of “action technology” has a couple of decades left to run.
- Will the CIO role exist for ever? - No, but the COO, CFO and the rest are likely to disappear at the same time.
- Should the CIO role be split or merged with another CXO role? - Sometimes, yes. Almost every combination of executive roles you can imagine is in place in some organisation right now, usually for good reasons.
- What should the CIO be called? - Who cares? Just get on with running the business.
- Should the CIO report to anyone other than the CEO? - Who cares? Just get on with running the business.