CIOs have been advised to promote themselves as business-focused innovators, rather than IT experts, following...
news that Boots and House of Fraser have axed the IT director role.
Both retailers decided that they no longer required an IT director at board level after the completion of major technology projects.
As reported in Computer Weekly last week, House of Fraser will not be filling the vacancy left by IT director Frank Berridge, who retired last month. Responsibility for managing IT will instead be split between the director of systems development and the head of computer services, who report to the chief financial officer.
Berridge, who joined company as IT director in January 1991, represented IT at board level for 16 years. His last project involved integrating the IT systems of Beatties, which House of Fraser purchased in 2005.
House of Fraser was acquired by the Highland Consortium last October, and the changes in management followed a review of its IT departments, said a spokeswoman.
Boots, which was taken over by private equity firm KKR in April, has outsourced much of its IT function to IBM, Tata Consultancy Services and Xansa.
A source inside the company told Computer Weekly that Rob Fraser's role as Boots' IT director was to oversee large integration projects, including a six-year, £350m SAP implementation, and these projects had come to a natural and successful end thanks to Fraser's involvement.
Following a management review, and in light of these major projects being completed, the new owners decided that they no longer required the IT function to report directly to the board.
Despite the retailers dropping the IT director role, Berridge believes CIOs still have a lot to offer businesses. "They should be represented at board level directly. Often, they know as much as other executives about how the business works, in addition to having an understanding of technology," he said.
Laurie Orlov, principal analyst at Forrester Research, said many chief executives admit to having low expectations of the role that IT plays in the enterprise in terms of contribution to innovation, process improvement and asset management.
"CIOs own half the responsibility for shaping the CEO's low expectations - which means educating the boss to expect more," she said.
John Ponting, who was CIO at the Met Office before becoming head of legal and procurement services when the CIO role was dissolved, said, "The key question for any organisation is at what point does IT cease to be innovative and become a tool of business?"
Dave Aron, research director at Gartner EXP, said IT directors believe they are trusted and respected business leaders and, to a great extent, they are right. But few CEOs share the same unqualified view.
"This is partly because CEOs have a broad span of control, with IT just one of many priorities. It is also because of CIOs' technology and operations focus, which does not always allow them to show traditional business leadership styles and behaviours," he said.
Robin Dargue, CIO at drinks company Diageo, said IT directors could lead decision making in the boardroom more effectively if they found ways of proving that IT delivers business results and innovation.
This could help overcome the view of some chief executives that IT is "just a cost centre" that could inhibit business growth.
"CIOs should work hard to convince the CEO of the significance of IT's role in delivering innovation and growth, but they should place a time limit on this. If after three months the CEO still does not appreciate IT, the CIO should find another company where IT is appreciated," said Dargue.
He said the role of the CIO must evolve, moving from managing technology to managing the delivery of business results through innovation.
Tesco IT director Colin Cobain said, "IT directors should not have to sell IT to the board. They should work with them to solve problems. Part of this involves the IT leader having a clear vision of where the business is heading and making sure that they leverage the most relevant technologies to this end."
Robina Chatham, a former IT director and visiting fellow in information systems at Cranfield School of Management, agreed that CIOs must be able to contribute to every item on the boardroom agenda - not just technology.
"If IT directors sit in board meetings in silence on every topic but technology, their value at those meetings and place on the board will be questioned," she said.