In LinkedIn Answers this week, director at IBM Global Services Yaseen Babbar raised the question, “What is the future of the ‘CIO’ position in organizations?”
“Some people popularly refer to this as the ‘Career Is Over’ position and we have seen more people in this role get the severance during this downturn than any other ‘C’ level position,” writes Babbar. “What is the rationale behind this phenomena?”
“IT in most cases is a cost center,” responds Saqib Azmat, executive search consultant with People Perfect. “And like most cost centers, whenever there are costs to be cut, these centers are the first to get a stare. And so the story goes.”
Some CIOs just fail to perform key aspects of their job, argues Simon Brocklehurst, general partner at Ash Biotech and CEO of Psynixis.
“In the last decade, some CIOs have really failed to enable their businesses to use IT as a competitive weapon that directly enhances the core businesses. So IT in many organizations is, in reality, simply a cost center. In tough times, companies look to reduce costs. Exit CIO,” he writes.
Even when CIOs succeed in using IT as a “competitive weapon for business,” Brocklehust continues, they may fail to communicate this value properly to their Boards in a way the Boards can understand.
“When people don’t understand the ‘value’ of something, all they can do look at is the cost,” says Brocklehurst. Therefore, IT is again perceived as a pure cost center and there goes the CIO.
CIOs are devalued because boards and shareholders don’t understand what the role is to begin with, echoes records and information management consultant Paula Smith.
“The executive/management boards and shareholders simply don’t understand what the CIO does,” she writes. “If you do not understand what the role does, how can you assess the value it brings to an organization?”
Not all companies necessarily need a CIO, points out John Wurl, technology and business process improvement strategist. “Some companies really need this position and some need to focus more on appropriate business segments…it does not have to be only one person,” he writes.
Combining “under the umbrella of one CIO” was somewhat easy when IT departments were considered back-office operational areas, expense-driven, understood only by a handful of people and the technologies were few, says Wurl.
But this is no longer the case, Wurl argues. “Technologies are no longer just internally focused and operational in nature. They are external and they are used to generate revenue,” he says.
“Some companies have made changes in that they have separated their technologies operations by the customer segments that they serve and they no longer roll-up to a single CIO,” writes Wurl.
Many CIOs focus on operational solutions, notes Peter B. Giblett, but these problems are often solved by the use of operational applications.
“The key to success is leveraging the information from business intelligence solutions to make better decisions in the interests of the corporation,” he writes.
“The future of the CIO position is largely about the value added. Where there is none, then no CIO,” says Giblett.
To increase value, CIOs need to change their image, suggests Smith. “It is time that we stopped thinking of the CIO as simply the superior IT manager and see them instead as executive guardians of our core asset – information,” she writes.
If the CIO role continues to be defined as it is today, careers will truly be over, according to leader, strategist and management consultant Nitin Kumar.
Kumar says the CIO role will stay. While it might not continue to be called CIO, the position won’t be rolled into a CFO or other areas, she writes. It does, however, need to be reinvented.
“CIOs need to be strategic and have the ability to turn technology into a competitive advantage that plays a vital role in the growth of an organization,” writes Kumar. “A typical suit-clad CIO running a cost center and maintaining the IT will cease to exist, as that function get outsourced more and more – and perhaps in the future gets automated or even run from the cloud.”
Custodial CIOs that focus on IT expenses – often payroll and infrastructure – are probably doomed, writes Howard Wiener, technology executive and principal consultant. But those who consult, strategize and manage costs provide value to their companies, he says.
“Many companies can get by with a custodial CIO while others need a strategist to survive and grow. Based on their size, those companies will find a way to obtain that service, either by having a strategic CIO or renting one via consultancy,” says Wiener.
CIO may disappear as a full-time position, according to M. Anis Motiwala, strategic change management at Abacus Consulting. “The downturn merely happens to draw attention to a fact that existed anyway. If we pick up random job descriptions of a CIO and disassemble them into components, some interesting facts do emerge,” says Motiwala.
“The result is obvious: bifurcation of the position, a portion of the job moving parallel to CFO’s and getting merged within that position and the other portion remaining with the second tier in the IT division resulting in a convenient removal of a position altogether,” Motiwala continues.
“Instead of saying ‘Career Is Over,’ I Would say ‘Consulting In Offing’ – these specialists have not finished their worth, only lost the rational to sit on full time jobs,” writes Motiwala.
IT functions in most organizations – from small to large – will be farmed, predicts George Koeninger, VP at BFC Consulting Group.
“This includes all the IT functions from programming to repair of the networks. The CIO function will fall under CFO and will be a purchased service,” he states.
Koeninger suggests CIOs form their own consulting companies and “go after the business.”
Outsourcing is the answer for two reasons, according Saqib Azmat, executive search consultant with People Perfect.
“The best way is to let others deal with your headache (at a price of course). There is absolutely no way we can measure the cost of tension. Secondly, when it’s time to cut down, these once-ago assets now turned liabilities are yours to keep. Not the case in outsourcing.”
Consultant John James O’Brien thinks CIO responsibilities will split appropriately.
“Technical skills will be recognized as more appropriate to technical levels and demand for expertise related to strategy and governance related to the extraction, use and preservation of meaning in multi-media information resources (mapped to business value) will rise,” writes O’Brien.
But Josh Chernin, general manager at Web Industries, says the future is bright.
“Almost everything an organization does is reducible to information, and as more organizations understand, the important of seeing the big picture with an IT lens will increase,” he writes.
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