CIOs at the CrossroadsBy Eric Chabrow | Posted 01-15-2008
A quarter-century ago, I witnessed the birth of the strategic CIO.
The setting was the neo-classical headquarters of Massachusetts Mutual Life Insurance Co. in Springfield, Mass., where I interviewed the head of the insurer's information systems operation. His office was situated a few steps away from that of his boss, the CEO. Then, nearly all the IS executives reported to CFOs, because company mainframes and minicomputers mostly supported corporate financial systems.
But MassMutual's chief executive recognized the strategic importance of computers in creating new products. Without computers, it often took a year or more to match a rival's new insurance product; with them, a competitive product could be introduced in a matter of months. Having the computer guy by the CEO's side made perfect sense. Within a few years, the strategic importance of IT was clear. The CIO title surfaced, and gained status in the corporate world. Articles in academic journals and the business press discussed how strategic the CIO function is, or should be. Conferences proliferated, with sessions devoted to strategic IT and the CIO. This journal was founded at the dawn of the millennium to support CIOs in helping their companies achieve their strategic goals.
But today, the strategic role the CIO plays in the enterprise is being questioned. Fewer CIOs report to CEOs than in recent years. Indeed, nearly 30 percent of top IT executives reported to the head of finance in 2007, up from 22 percent in 2005, according to the Society for Information Management. "The increasing prominence of the CFO in IT management signals a change in the way companies view technology strategy and deployment," writes senior writer Edward Cone in our cover story, "Meet the New Boss".
In reality, most CIOs never considered themselves business strategists. Only one-third feel their role is to create business strategy; the rest see their mission as executing business strategy, according to our 2007 survey of nearly 300 CIOs (go.cioinsight.com/2007CIOsurvey).
Still, to paraphrase Mark Twain, reports of the death of strategic CIOs are greatly exaggerated. What's happening is the bifurcation of the CIO role. The smaller of the two roles is strategic--these CIOs are "change agents," in the words of Forrester research director Alex Cullen.
The remainder, he says, are "general managers" focused on operational excellence. In many companies, the strategic CIO will likely head a small group that will have the ear of the CEO and board of directors. The tactical chief IT officer will likely assume greater operational responsibilities, such as other corporate shared services.
CIOs are at a crossroads, not a funeral.