Fewer CIOs Are Reporting to CEOs, Survey Finds

Far fewer chief information officers are reporting to their chief executives, according to a survey.

Last year, 45% of those responding to a survey by the Society of Information Management said the CIO in their organization reported to their CEO. This year, that number is 31%.

“Why it dropped is perplexing,” said Jerry Luftman, vice president of academic affairs at SIM, which counts CIOs and other senior IT professionals among its members. “I’m hoping it’s just a blip.”

More CIOs are reporting to the chief financial officer or the chief operating officer. Twenty-nine percent of respondents said the CIO reported to the CFO, compared with 25% last year, and 22% said the information chief reported to the COO, compared with 16% last year.

Luftman said that the CEO isn’t the only decision maker in a company and that CIOs can be just as successful when they report to other executives.

“The point is that it helps to have the CIO report to the CEO, and I have found that [in] those organizations where the CIO does report to the CEO, their alignment maturity is clearly ahead of those where they do not,” said Luftman.

For the past few years, Luftman, who is also a professor at and executive director of the graduate program at the Stevens Institute of Technology, has been measuring business and IT alignment using a number of metrics, including an organization’s communication, its IT governance process, and the way the business understands technology and the technology department understands the business.

Each year, in addition to asking where in the reporting structure senior IT executives fit, SIM surveys its members on their top challenges, technology focus areas, budget and staffing. This year, 140 members participated. The group uses the results to set its event and education agendas.

SIM members said their biggest management challenge was attracting, developing and retaining staff, which was also the No. 1 concern last year. Companies, Luftman said, “are really hurting in being able to fill all the spots they have.” There needs to be a concerted effort on the part of all interested parties to attract students to computer science programs, he says.

Aligning IT and the business, which has been a major challenge for CIOs for more than a decade, was No. 2 on this year’s list—as it was last year.

Another surprise was how strongly human resource issues showed up in the survey.

Luftman noted that the top three concerns—staffing, business/IT alignment, and building up business skills—are all human resource and skills related and that those issues were cited by more than 40% of respondents.

In fact, human resource and skills issues popped up all over the list. Even the No. 10 concern—the evolving CIO leadership role—touched on the subject. IT leaders realize they need to change, and they need to develop even more business and industry specific skills, Luftman said.

Antivirus protection topped SIM’s list of the top five application and technology issues, followed by business intelligence and networks. Business process management and continuity planning and disaster recovery were tied at No. 4.

CIOs are making antivirus a priority, Luftman said, because they’re getting tired of having to deal with viruses and worms.

As for their IT budgets, only 22% of respondents anticipate a cut in 2008—the same percentage that expected a budget cut going into 2007. However, only 49% said their budgets would grow in 2008, compared with 61% who expected a budget increase coming into this year.

The survey found that most participants expect their companies to hire more IT staffers. Fifty-two percent of respondents said their companies are planning to increase their IT headcount in 2008, compared with the 46% who expected to bulk up their staffs heading into this year.

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