Here are several excerpts from an article by Linda Tucci, Senior News Writer for SearchCIO.com, More CIOs Report to CEO than CFO:
CIOs tend to look at reporting lines like entrails or tea leaves — a portent of how the job will play out.
A Forrester Research Inc. survey of 503 IT executives suggests the interest in chain of command is well-founded. While a CIO’s reporting relationship doesn’t make a radical difference in the job, says author Bobby Cameron, it absolutely colors how IT will likely be viewed, managed and funded in your organization.
Of note, CIOs reporting to CEOs now represent by far the largest group, 34% of all respondents. At the same time, the percentage of CIOs reporting to the CFO has shrunk over the past three years, from about 25% to 18%, which is probably a good thing.
“If you look at what the drivers are in this shift, you see an increased awareness of the value of IT and its impact on other parts of the business. The various officers in the reporting relationships, CEO, president, COO and business-unit heads, indicate that they’re interested in having a more direct relationship with the technology,” said Cameron, principal analyst at Cambridge, Mass-based research Forrester.
So, the CIO’s star is rising?
“Overall, I think this is good news,” Cameron said. The survey results are supported by data from an earlier Forrester study that strongly shows the business attitude toward IT is improving, he said.
Reporting to the CEO could represent the ideal reporting relationship, in Cameron’s view, because it puts IT close to the seat of power and business strategy, regardless of the CEO’s knowledge of technology. As the appreciation of technology increases among business executives, Cameron said he would not be surprised to see more CIOs reporting to operational executives, like the COO, who are more likely to understand and execute on IT’s potential as a competitive advantage in the marketplace.
Other highlights: IT budgets as a percentage of company revenue are largest at firms where the CIO reports to the CEO and, no surprise, smallest when the CIO reports to the CFO. CIOs who report to presidents spend the greatest portion of their IT budgets on new investments, and CIOs reporting to business units, the least. The perception that IT has improved over the past year was highest at firms where the CIO reports to the COO. Improving the customer experience and improving operational excellence dominated the CIO goals for next year.
