CIOs Gain Influence And Responsibility

Disney has been on a fast track to link every part of its business, which is putting technology at the forefront of this huge enterprise of companies. "Every one of our business units is digitized to enable a core aspect of business," Scott says. "And you can't be a CIO if you're not thinking about that and are in the thick of the business." He says that all of Disney's executives are now more attuned to IT than they were just five years ago.

Others agree. "We've always needed CIOs to be business and technology leaders--we're simply getting clearer about the need for IT leaders to possess both skill sets," says Steve Phillips, CIO at Avnet. "I worry that sometimes we get too caught up in the fiction of the business and IT, as if these are two different groups operating with different agendas. The reality is that we all have the same agenda: to make our business successful."

KNOW YOUR CUSTOMERS
What's influencing this migration toward more business responsibilities and leadership? Top on the list is customer needs. The fact that the CIO's responsibilities have shifted to involve more interaction with customers underscores the business impact of IT. Among the CIO's main opportunities are using customer and business data to influence new products and services and to facilitate innovation.

CIOs also are spending more time with just about all of their constituents. Daily contact with CEOs is up dramatically, and weekly contact with line-of-business managers has risen nearly 50% in the past two years.

The changing role of the CIO invariably leads to speculation about whether the title "chief information officer" will accurately reflect the responsibilities and impact of the role in the coming years. As more CIOs directly impact--if not lead--some of the most important business sectors of the organization, their roles are expanding away from managing technology. While technology is still important, the influence on business operations and processes has some believing that the title should better reflect this shift.

In our survey, 88% of respondents say the CIO is assuming a different role in the organization, and 32% also expect the CIO's title to change in order to better reflect the nuances of the job.

At the top of the list of suggestions are two that tied for No. 1 at 29% each: "chief operating officer" and "chief technical excellence officer." The split among respondents between a title that's mostly business-oriented and another that's still focused on the technical side of the job underscores that the IT community as a whole sees business and technology responsibilities inextricably linked.

What of the suggestion "chief operating officer" for the next-generation CIO? Obviously, the title already exists. But many think that as the CIO is brought into the boardroom of more companies and affects operations so directly, COO and CIO responsibilities will merge. It's unclear which department would triumph in this convergence, but industry observers say they favor the CIO taking on the COO's tasks.

Another suggestion that ranked high on the list of new titles for CIOs at 19% is "chief process excellence officer." For several years, CIOs have had oversight of process improvements through technology, and companies like General Motors are set up organizationally to accommodate this. In each of the technology units aligned with GM's businesses, there are one or more process-information officers who report to the group CIO. This, global VP and CIO Ralph Szygenda says, ensures direct IT impact on business processes and that these processes are optimized through technology.

Many respondents say that these two responsibilities are on a collision course. Even if their own title isn't ready for a change, some CIOs say that the shift to a focus on processes and business impact is likely to at least cause companies to rethink the role. "I can see it happening," says Disney's Scott.

ONGOING CHALLENGES
One of the most durable challenges for the IT organization has been managing the budget, particularly increasing the amount of money aimed at innovation and growth. Over the past three years of our survey, the amount of the IT budget allocated to maintenance projects versus innovation has remained constant at a ratio of 64% to 36%, which clearly shows that despite the desire to fund more growth-related initiatives, legacy technologies continue to siphon the bulk of the dollars--and the CIO's attention. CIOs say that maintaining ERP, sales-force automation, and other enterprise-wide projects still accounts for a large percentage of the budget, but they also see potential for this to change with investments in technologies like service-oriented architecture and software as a service, coupled with an increased use of open source platforms.

Among the technologies that companies are targeting for contributing to innovation are application integration, business intelligence and analytics, desktop upgrades, business continuity, and security. In the previous two studies, security ranked No. 1. Cutting-edge tech like Web 2.0, virtualization, voice over IP, and radio frequency identification still aren't ubiquitous, as most companies are making piecemeal investments or are in the evaluation stages. But as these technologies become more prevalent, count on CIOs to be out front looking for ways to use them to make a difference to their businesses.