The Evolution Of The CIO

The role of the CIO is at a critical point of change. It's time for CIOs to step up -- or step back.
John Zarb, a long-time technology manager, now an independent consultant, is unfazed by predictions of the CIO's demise. "When are we going to accept the fact that the CIO is vital, needed, and here to stay?" he says.

Churn in the CIO ranks isn't new and it doesn't necessarily mean the position is in danger of extinction, at least not any time soon. Umesh Ramakrishnan, vice chairman of executive search firm CT Partners, says his company is conducting more CIO searches this year than last, with eight to 12 going on at any given time. Also, the number of companies wanting the CIO to report to the CEO has increased in that time, he says, and current searches indicate an almost even split between the CIO reporting to the CEO and the CFO. That data point in the SIM survey may turn out to be a blip after all.

CIOs seem to be gaining respect, at least at some organizations. In the InformationWeek Research survey of C-level executives, 41% say the influence of the CIO at their company is on the rise, while 40% say there's no appreciable change, and 19% say that influence is declining.

chart: Knocked Down A Peg -- To whom do senior IT execs report?
So what's changed in terms of what companies are looking for in a CIO? "We're seeing a lot more business leaders being brought in to fill the CIO role," Ramakrishnan says. Those with proven records of solving business problems and increasing revenue streams are the ones most in demand; those who come in with a new set of toys ... not so much. "There's a bias against those who have implemented the latest technology but not solved any business problems," he says.

Tim Stanley, the hard-charging CIO of Harrah's Entertainment, the hotel and casino company, is a good example of the evolved CIO. Besides holding the title of CIO, Stanley is senior VP of innovation, gaming, and technology. In that role, according to his lengthy corporate profile, he's responsible for "the strategy, architecture, program management, development, support, and operations of the entire portfolio of Harrah's gaming and IT-enabled business capabilities in the U.S. and abroad, as well as the identification and enablement of new business & IT innovation within the company." Back to Krishnan's thesis: Business process ownership and oversight go hand in hand with Stanley's many technical responsibilities.

CIOs who want to step up must refocus the culture of IT, become more of a technology venture capitalist, says Dave Aron, a VP of research at Gartner. As such, they must challenge the value of projects, suggest alternatives, and make sure the proper procedures are in place, both inside and outside the IT department, to ensure success. CIOs must "exercise influence rather than just control," Aron says.

For Ken Harris, senior VP and CIO of Shaklee Corp., it helps that he works in a midsize company, and it isn't just the big-fish, small-pond factor. Harris, the former CIO of Gap and before that Nike, came to Shaklee two years ago, after the company was acquired by a private equity firm, to determine the role IT would play in helping the company "become relevant again to a younger generation" and figure out how to get "the biggest bang for the buck."

What's different about this current position, Harris says, is that it's much more about strategy than tactics. "I can help them make decisions that are doable from a technology standpoint," he says.

Harris is a believer in software as a service, not only for the low up-front costs but also for the rapid deployment capabilities, having implemented several SaaS projects at Shaklee in the last two years, such as RightNow's CRM service, Web analytics from Visual Sciences, and address verification with the help of data services company StrikeIron, which customer service reps had been clamoring for. "On the business side, users are demanding so much more, more quickly," he says.

chart: Changing Roles -- Are business managers in your organization taking on more responsibility for IT projects compared with a year ago?
One of the virtues of Web 2.0 technologies, according to Rod Smith, VP of emerging Internet technologies at IBM, is being able to act quickly on emerging business opportunities. Chief among them are partnerships, but partnerships create integration work, and the time frame for that work is collapsing rapidly, Smith told a group of financial services technology managers at a recent conference. Customers tell him that in the current business environment, 20% of relationships last less than six months, and that "drives IT crazy, because it takes IT six months to get started on a project," Smith said.

Those dynamics--speed, change, partnerships, business process transformation--will only accelerate in the coming years. "The next decade will not be about control. It will be about innovation without permission," says Jeremy Burton, CEO of Serena Software, a vendor of software-configuration and mashup technology. "Guys who made a reputation with control will struggle."

Or maybe they'll just stay where they are, consolidating data centers, maintaining applications, and managing server boxes, instead of leading business-process change through technology innovation. That change agent is a role that will surely be filled by someone. But if not by the CIO, then by whom?

Write to John Soat at [email protected].
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Illustration by Mirko Ilic

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The Inexorable Rise Of The New CIO