The changing role of the CIO in the business

Although the notion of the hybrid or dual-role CIO has been around for at least a decade, the creation of such positions is only now starting to become a...

Although the notion of the hybrid or dual-role CIO has been around for at least a decade, the creation of such positions is only now starting to become a trend.

Although bestowing several job titles on heads of IT is still not the predominant model - and is unlikely to become so any time soon - Gartner says, nonetheless, that the phenomenon is here to stay.

Barbara Gomolski, a research vice-president at the analyst company, says, "Probably less than 20% of the CIOs who I work with have multiple roles and multiple titles, but if you think back only a couple of years, it was under 5%, so it is a growing trend."

The most common additions to the CIO moniker include head of business transformation, head of business process change or management, head of service delivery and even head of supply chain. In some companies, CIOs are also being called chief technology officers (CTOs), and in others, the role of CIO is divided between two people.

Tim Jennings, a research director at the Butler Group, says, "We are starting to see organisations split IT roles into CIO and CTO, which means that they are splitting IT into its supply and demand sides."

In this instance, the more traditional IT role is undertaken by a CTO, who is an expert in delivering technology and this "is where the majority of current CIOs have come from and still are". The true CIO, on the other hand, is "really a specialist in the application of technology to the business, especially in the context of business processes and improving their efficiency".

The latter often - but not always - has no IT degree, but is instead likely to possess an MBA, although they have generally done at least a stint in IT, sometimes as a result of having been involved in a large project with a significant technology component.

A common reason for bringing in such a non-technical person from the business side, meanwhile, is because the relationship between IT and the business has become strained, and so the goal is to have the CIO act as a bridge between the two.

Cathy Holley, a partner at CIO head-hunter firm Boyden, "We do not generally see senior managers actively going for an IT role, because it is tough and a lot of people fail or do not last long. It is hugely visible, and in some organisations, the position is used as a scapegoat. There is also the fear factor as it is a specialist area and so not that many people want to dabble in it as they cannot see what is in it for them."

Nevertheless, she points out that it is important not to get too hung up on job titles because they tend to mean different things in different companies.

"If you look at the content versus the title, it is almost random. Everyone wants to be called a CIO as it sounds more elevated, but the real point is whether you are steering and shaping the company strategy and whether you are on the board or not. You really have to look beyond the title," Holley says.

Fewer than 5% of IT heads are in this situation in the UK, however, and Holley says, "I could count and name them." This is mainly because the creation of such influential positions and the addition of a second business-related responsibility is usually linked to the organisation's attitude to IT.

Gomolski says, "If you are in an organisation where running IT is perceived as a cost of doing business and the aim is to do it as cheaply as possible, you are not usually going to be in the type of company that will allow you to take on additional roles."

The type of company that will, however, generally shows one or more possibly overlapping characteristics. The first is that it will tend to see IT as an enabler, a differentiator and a tool to introduce innovation into the organisation. IT will also generally be embedded deeply into the business rather than simply being viewed as a standalone function.

The second likely trait is that the company will have outsourced much of its technology infrastructure and require someone at the top to manage the portfolio of services, whether they are delivered by a third party or in-house.

The third attribute is that the organisation may well be going through a period of business transformation, process standardisation and change, and will see IT as a catalyst for this.

One organisation that has created just such a dual-role position on the back of its business transformation initiative is Siemens Financial Services. The company provides services ranging from sales and investment financing to fund management and insurance, but about 15 months ago decided to embark on a wide-ranging programme to improve its business processes. The aim was to increase efficiency and boost the quality of its service delivery.

It was at this time that Steve Mason, the then head of finance also took over the role of head of IT. "Our business had evolved over a long period, but we needed to do a major systems upgrade," he says. "That gave us an opportunity to think more carefully about how to organise people and processes around IT, so it meant me getting involved from the outset to ensure that the IT project started and ended with them."

This led the organisation to create a cross-functional team called the Corporate Transformation Group, which included project managers, process change experts, compliance specialists and technical staff.

"We are trying to avoid traditional silos such as IT and finance with a project manager sitting to the side because the aim is to create a common vision across all of those silos in order to break them down and use people across different functions," Mason says. "So we have created a cross-functional team with different skills, which is important because you have to recognise that there is a time when finance knows best or IT does or whatever. But it is a balancing act."

The secret to managing such a wide remit, however, is to have strong reports in place and to ensure that "people are aligned behind what you are trying to do". This means that learning to let go and delegation are key skills as is programme rather than project management.

"It is no different to any other management job in that you have to have the right people around you as well as a sound human resources strategy, with a commitment to develop people. But the relationship with your direct reports also needs to be robust enough to enable you to question what people are doing," Mason says.

Being responsible for both finance and business processes is "quite useful", however, Mason says, as "you find that IT overarches them both," and all of them contribute in a synergistic fashion to providing more effective processes for the business.

"You can argue that the solutions are partly technical and partly process-based, but there is also compliance going across all of these areas. And once you start thinking about it at that level, things end up being less fragmented because everything is put into context," Mason says.

Specifically on the technology side, meanwhile, he believes that a good head of IT has to understand the key business issues in order to decide where technology can assist. "So it is about the IT function using technology to solve business problems rather than technology being the be all and end all," Mason says.

For those CIOs with an IT background wanting to move into such a dual-role position, however, the most common traits are those of being proactive and seizing the initiative.

Brinley Platts, chairman of CIOdevelopment.com, says, "The notion of talking to the right people, and saying that you would like this opportunity, and this is what you would do if you got it, does seem to open doors. Few CIOs are offered an expanded opportunity by the business as there is always someone else. So in every case I have come across where CIOs have an extended mandate, it is because they have been proactive about getting it."

This means that it is crucial for CIOs to not simply sit behind a bunch of systems with flashing lights, waiting for someone to ask them to get involved with the business. Instead, it means getting out and about and engaging with staff and management at all levels, not least to better understand business priorities and to look for tangible ways to help the organisation run more efficiently.

Another thing to bear in mind here, however, is that most people tend to be promoted from inside the business rather than from moving to a new employer because the issue of personal credibility is important. "People are most likely to trust you more if they have seen you in action, so you are better off trying it with your current organisation. Then, once it is on your CV, it is easier to move elsewhere," Holley says.

Another key to success is to focus on developing "soft" interpersonal and communication skills rather than "hard" technical skills. "It is about demonstrating leadership and emotional intelligence and relationship-building. A sense of humour looms large because it is about being clubbable at the top level," says Platts.

This implies that CIOs not only need to be commercially astute, but also have to be able to add value - in a way comprehensible to the business - across the whole range of subjects discussed at board level. Having presence and a dash of charisma also does not go amiss.

But although all of this may sound like a tall order, the gains - if you can get it right - can be high as such expertise is in demand, and is likely to remain so for some time to come.

"There will still only be a minority of companies employing CIOs with multiple roles for the next few years, but that could change into the longer term, depending on how they decide to use outsourcing. It is a growing trend though and is likely to continue to be," says Gomolski.

Cath Jennings




 

This was last published in January 2008

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