CIOs Need to Talk

In March, a celebrity business speaker was booked to entertain an audience of CIOs in Amsterdam. He worried it would be a tough gig for an audience that would be hard to warm up. "The CIO is a troubled person at the moment," he explained, "Many of them think they may be losing their jobs."

Not in the conventional sense of redundancy. It's just that their role and influence in the company is changing dramatically. For the worse. Their job title might be chief information officer, but some feel they're increasingly treated like glorified datacentre managers. A recent Economist Intelligence Unit report suggests that most CIOs don't even get the final say on technology purchases in the boardroom anymore. The chief financial officer does that now, while the poor IT strategist is tied up with security and compliance regulations.

How did it get to this? Some think IT directors should never be forgiven for the billions that were lost in the Y2K fiasco. "At boardroom level they're now asking questions," explains Greg Day, a security analyst for McAfee, who commissioned the Economist study. "They say 'we keep giving the CIO all this money. When are we going to see any feedback?'"

The dot-com bubble didn't help matters. Preposterous IT industry campaign slogans, like IT doesn't support the business, IT IS the business didn't win many friends. Especially not for the blameless CIO, who became the focus of the understandable resentment this hype created. If there's an IT expert on the board of directors these days, there'll be several people wanting to kick them off.

Tug of War

According to Andy Mulholland, the CTO and technology trends watcher for consultancy Capgemini, the average CIO is being pulled both ways. "On the one hand, their energies are being channeled towards rather mundane back-office duties, which pleases the auditors and keeps everything compliant," he says. "On the other hand, they're expected to be creative, and lead on business strategy. But the work that keeps the CFO happy takes precedence." And so the role of today's CIO is more about cost cutting, control and compliance, and less about the roles that may have attracted them to the job in the first place, such as planning and strategic innovation.

"If they want to innovate and lead, they're not getting it done," says Mulholland. "We found there's been a massive difference between what CIOs said they planned to do at the start of the year, and what actually transpired at the end of the year. You can be a creative or a cost cutter, but it's a difficult juggling act to be both," he says.

"Some CIOs are happy just to worry about the technology. Not every industry, or individual enterprise, wants its CIOs to have broader ambitions," says Stephen P. Kaufman, ex-Arrow Electronics CEO and now a senior lecturer at Harvard Business School. In some businesses, IT is a supporting rather than a driving function, he argues, so the CIO might not be asked to help set strategy. "But they'd better be in the room and listening carefully as it is discussed and shaped," he warns. "On the other hand, however, some employers expect much more of their CIO. When the IT infrastructure can create a competitive advantage, the CIO has a significant role to play and will be expected to define the IT capability."

When the CIO of American Airlines pioneered the new fare structure that won it signficant chunks of new business, he could never have achieved this innovation if he'd been jumping through hoops at the behest of some uppity security worrier. He alone knew what technology was capable of, and how the application could be applied to the airline. And consequently the airline broke new ground with a system that dynamically set fares based on flight departure and arrival times, type of ticket and closeness to flight time. In Kaufman's era, the CIO had time to develop a new project. These days that's rarely possible. "Boards that confine the CIO to the datacentre to minimise costs will similarly find their companies obsolete," he predicts. However, the variable impressions of the CIO prompts the question of how you upgrade perceptions of the CIO role.

Join the CIO Australia group on LinkedIn. The group is open to CIOs, IT Directors, COOs, CTOs and senior IT managers.

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