State of the CIO 2014: The great schism

State of the CIO 2014: The great schism

Digital strategist or traditional CIO? Our 13th annual State of the CIO research reveals the great career divide.

When CIOs live in the IT house on the hill, they live well.

In our 13th annual State of the CIO survey, 25 per cent of the 722 CIOs (including 43 from New Zealand) we surveyed report that the IT group is perceived by colleagues as a true business peer - or even a game-changer - that can create and launch new products and open new markets. These first-class CIOs identify their top activities as driving business innovation, cultivating partnerships and developing business strategy.

They control the majority - 65 per cent - of spending on IT. They have an excellent relationship with the CEO, reporting to him and sitting on the executive committee. They draw on deep bench strength in the IT group and focus on external activities, such as meeting with customers. And like the CEO and the rest of the C-suite, these CIOs enjoy extra pay when the company reaches sales and profit goals. That's good stuff.

Toiling far from that exalted place, we find the 48 per cent of CIOs who acknowledge that their IT groups are viewed by fellow employees as a cost centre or service provider. Life isn't so grand there. Their top activities are improving IT operations, deploying new systems and controlling IT costs. Managing IT crises is also high on the list. That sounds like a CIO job description from 1995.

Whether an IT group is a game-changer or a cost centre is the subjective judgment of our survey respondents from around the world. We had a strong global response this year, with 41 per cent of respondents coming from Europe, the Middle East or Africa. Yet if someone self-reports that they're viewed as a cost centre, that's pretty telling. As we plow through this period of digital disruption, where established rules for competing may no longer apply, some CIOs now question what they want for themselves. The profession is changing fast in an atmosphere where colleagues sometimes look upon a traditional IT group as a hindrance to corporate success.

Take heart: Our 2014 State of the CIO research reveals that core measures look good. For example, 44 per cent of CIOs report to the CEO, up from 39 per cent last year. Tenure is steady at almost six years, while average pay is holding at $219,500. CIOs are carving out significant time to focus on building relationships with business leaders, some spending up to 25 per cent of a typical week on it.

Read the special report on the New Zealand results of the 13th annual State of the CIO research in the upcoming issue of CIO New Zealand.

But the alarming split in the profession - between CIOs at the top of their game and those who aren't - will alter careers, and perhaps corporate futures as well. There are glaring differences in what the CEO wants this year from each kind of CIO. Cost-centre CIOs must finish a major enterprise project, simplify IT and cut technology spending by a set percentage. Game-changers are being asked to lead product innovation efforts and enable global expansion. They make more - $249,000, compared to a cost-centre CIO's $182,000 -and report healthier relationships with the CEO and CFO. While the percentage of CIOs overall who report to the CEO is up, among game-changers that number is at 64 per cent, while for cost-centre CIOs it's only 37 per cent.

"There is a polarization to what's happening," says Rich Adduci, CIO of Boston Scientific, a $7.2 billion medical device maker.

This fracturing threatens the vitality of the CIO role. The divide is not due only to seemingly less capable CIOs; both the executive and the company play a part. In times of tumult--and the current dismantling and remaking of whole industries certainly qualifies--leaders often don't know quite what they want. A strategic CIO and an organisation that views IT as simply a cost to be managed are as badly mismatched as a tactical CIO trying to keep up at a place that demands fresh thinking from IT. As Adduci puts it, "Either the CIO will win people over, either way, or he will get gone."

We see the angst. While 86 per cent of CIOs in our survey say their role is becoming more important to business and 90 per cent say being a CIO is increasingly challenging, just 65 per cent say the CIO role is becoming more rewarding. And a worrisome 28 per cent of respondents say they feel CIOs are being sidelined.

The question is, what can we learn from top CIOs who are flourishing in the new digital age?

Next: Keys to the castle

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