Debate is raging about whether a chief information officer or IT manager should report to the chief executive officer or chief financial officer.
The consensus seems to be that it is much better for a CIO to report directly to the CEO (or COO). At companies where the CIO reports to the CEO, IT is viewed as an investment. No one argued for a reporting relationship to the CFO because detractors claimed those companies that have one see IT as a cost to be managed, curtailed or cut.
Reefe Brighton, CIO at Aurora Energy said he reports to the CEO and is a member of the executive team.
Responsible for an annual IT budget of A$10 million (US$5.6) to A$15 million (including capital expenditure and communications), Brighton said he does need to get approval for IT from the CFO and CEO.
“For our organization (relatively small with a deliberately flat structure) this arrangement is the most appropriate for us,” he said.
“IT is hardly of critical importance to our business, but it represents a substantial investment and affects all our divisions.”
Brighton said whether CIOs or IT managers report to the CEO or CFO depends on the strategic importance of IT within a business, its size and breadth of operations.
“All companies should view IT as an investment, otherwise they shouldn’t be spending the money. However, the size and importance of the investment will change with each company,” he said.
An IT manager from a consulting company, who wished to remain anonymous, said he reports to the chief operations officer (COO).
He said reporting procedures are often dependent on the outlook of the CFO and the history of IT within a company.
“But it should be like any business decision: if it will improve the company, then spend,” he said.
The IT manager said in his organization, technology is viewed as a cost to be managed.
