CIOs risk being sidelined if they fail to change C-suite approach
- CIO still perceived as the organizational “watchdog” and leader of a support function
- 38% of CIOs report a lack of support from executive management team
- 60% of CIOs think they add strong value to fact-based decision-making when setting corporate strategy, yet just 35% of C-suite peers agree
Singapore, 16 October 2012 – As the business world evolves, CIOs can, and must, refresh the outdated perspectives that other executives still hold about their role in order to succeed, according to Ernst & Young’s DNA of the CIO report released today. The report, based on a survey of over 300 senior IT professionals globally, also draws on in-depth interviews with a further 25 CIOs and 40 respondents from across the rest of the C-suite, to capture business views about the CIO role today.
The central role that technology has played in every industry and sector of business over the last two decades emphasizes just how big an opportunity CIOs have already missed. CEOs are in clear need of “co-drivers” who combine technology expertise with business skills; however, too few CIOs are currently regarded as true members of the executive management team. While they have technological expertise, they are not perceived to have the right level of business skill – limiting their potential for change.
Gerry Chng, Partner, Advisory Services, Ernst & Young Advisory Pte. Ltd. comments: “The clear message is that the CIO needs to be both a competent technology champion, and a strong communicator and negotiator. The role, in essence, bridges the needs of the business and the team that delivers the results. The lack of support, as indicated in the survey where CIOs think they are adding more value to the business than their C-suite peers, stems from the fact that CIOs are not necessarily and sufficiently ‘selling’ the value of technology to the business. For example, when making mobile emails possible, the value that CIOs need to communicate across the business is how this IT change is helping to improve business productivity; and not just the change itself.”
Securing a place in the C-suite
If CIOs are truly going to deliver on the potential remit of their role, and the potential of IT, they will need to work harder to secure their position at the top table. Less than half (48%) of the Csuite executives think the standing of CIOs has improved in recent years on a range of issues, from product innovation through to helping deliver on the operational agility of the company. While 60% of CIOs think they add strong value to fact-based decision-making when setting corporate strategy, just 35% of their C-suite peers agree, resulting in just 43% of CIOs reporting that they are deeply involved in strategic decision-making.
This low level of involvement is reflected in nearly 4 in 10 (38%) respondents reporting a lack of support from the executive management team as a major issue, particularly within larger companies with revenues of over US$1b (46%). Most leaders aim to keep any discussions with the CIO centered on IT budgets, ignoring the chance to engage in a wider discussion about the value of technology. CIOs acknowledge that it will be difficult to change such perceptions of being a purely cost control function, but doing so will be a prerequisite for recasting the role of the CIO, and IT, within the wider business in the future.
Gerry comments: “Burdened with the legacy lack of mutual understanding, it is no surprise that C-suite peers do not always see the CIO as an equal. To break the deadlock, CIOs need to focus on earning the trust by delivering quick wins and selling to their peers how such technological successes are creating real value for the business. CIOs should also go back to fundamentals on project management to ensure that business units have an active voice in IT projects and are regarded as key stakeholders for the entire project lifecycle. Over time, this will help the business to better understand the value that IT brings, and have a vested interest in the success of IT projects.”
More than IT budgets
Previously, IT leaders have not done enough to reach out to the rest of the business to develop long-lasting relationships that can support their wider change efforts. As befits IT’s long-running history as a cost control function, CIOs hold the closest relationship with the CFO, but CIOs recognize that by expanding discussions to encompass the CEO and other leaders, CIOs can move the conversation onto matters about IT value and its role within the business, rather than getting tied up in budgets alone.
Gerry concludes: “Future CIOs will need to be able to show proactively how IT can be used as a source of innovation within the business, rather than merely a support function. Naturally, a part of this will be securing the chance to support a major business project of some kind, which can, in turn, make a specific impact on how the rest of the business operates. The value of this is clear: once business leaders start to recognize an IT leader as someone who can transform the way they operate their business, perceptions can quickly start to shift. This will be especially clear if the resultant changes in the business operating model impacts top line revenue growth.”
To find out more information and download the report, visit www.ey.com/dna-cio .
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