Close links with CEO essential for CIOs, study finds

The UK's CIOs may be less successful than their counterparts in other countries because they are less likely to report directly to the CEO of the company, according to a global study being conducted by Booz Allen Hamilton.

The UK's CIOs may be less successful than their counterparts in other countries because they are less likely to report directly to the CEO of the company, according to a global study by Booz Allen Hamilton.

Fifty per cent of CIOs in organisations surveyed report directly to the CEO, although more than 90% report to one of the chief officers. The study has found that one of the keys to success for a CIO and the IT organisation appears to be a direct reporting line to the CEO of the company.

In addition, although 66% of overall survey respondents say that IT is well aligned to the business strategy of the company and fulfils business requirements, more CIOs are perceived as utility managers - managers of a commodity - than as improvers of business processes or entrepreneurial innovators.

The study also reveals that UK IT workers are the most negative about their departments. They report poor translation of decisions into action, frequent second guessing of decisions, and a lack of successful reaction to change. IT is more likely to be seen as sending conflicting messages with information generally not flowing freely.

The global survey, which is still in progress, seeks to understand what differentiates successful IT organisations from their competitors. It uses Booz Allen's OrgDNA Profiler system to diagnose the health of companies. Since its launch in October 2007, the IT OrgDNA survey has been undertaken by 1,500 participants - widely distributed across a range of industries. The majority of respondents are in management positions, typically senior or middle management, and many have been in their positions for more than six years, indicating that they are well placed to judge the health of their IT organisations.

The CIO and the healthy IT organisation

Booz Allen's analysis has revealed a number of links between the health of IT organisations and attributes of their CIO.

CIOs that have better visibility - through advantages such as being closer to the CEO - tend to have healthier IT organisations. These companies are able to transform decisions into action quickly, and staff understand the impact of their actions they tend to be well aligned to business strategy and fulfil business requirements.

CIOs whose style has identified them as "utility managers" are less likely to preside over healthy IT organisations than those who improve business processes or innovate. Their organisations are characterised by a lack of clear responsibility and slow information flows. The perception of CIOs does seem to depend on the respondent's perspective, however, with non-IT staff more likely to label the CIO a "utility manager" than IT staff.

Centralised IT organisations were found to be healthier than other structures. More than 60% of participants in the survey have centralised IT organisations, with separate demand and supply structures being less common. Decisions are less likely to be second guessed, and these organisations are better able to deal with change information flows more freely within these organisations, and they are more likely to be aligned to business strategy. It is worth noting, however, that the respondents with centralised IT are likely to be smaller organisations. Larger companies are likely to need more sophisticated models.

Half of IT organisations are 'unhealthy'

About 50% of the IT organisations surveyed have been conclusively diagnosed as unhealthy, indicating that the organisation's key characteristics - a combination of decision rights, information, motivators and structure - are dysfunctional.

Organisational characteristics go some way to explaining the health of IT organisations, but survey respondents' perspectives may also impact these results. For example, senior managers are far more likely to describe IT as healthy than those in line management or staff functions furthermore, non-IT staff have a slightly more negative view of IT than those in the IT department.

How to become healthier

Although national, industry and respondent characteristics seem to influence the evaluation of IT organisations, there also appear to be some controllable factors that may drive organisation health.

Non-IT respondents describe less healthy IT organisations than those who work within IT:

- Only 34% of non-IT respondents agree that IT translates decisions into action quickly, compared with 43% of IT respondents.

- 42% of non-IT respondents feel that IT is not aligned with business strategy, compared with 34% of IT respondents.

- 45% of non-IT respondents state that IT does not meet business requirements, compared with 33% of IT respondents.

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