The role and authority of Chief Information Officer is changing. Much of it is due to a growing mistrust of IT’s inability to change, control costs and meet the needs of the business. Even more is due to the radical shift toward a cloud-based information infrastructure.
In a Gartner survey, 59% of CFOs indicated that they need improved IT support to meet critical business goals. Only 13% felt their current levels of IT planning and support were enough to effect change. So it’s no surprise that an increasing number of IT departments report to the CFO. In these cases, the CIO – if it still exists – also reports to the CFO. That means most IT spending is now approved by the finance team, not by the CIO.
What’s caused this shift? Are CIOs an imperiled species?
Who’s steering, the CIO or the CFO?
The prior year, Gartner reported that 45% of IT leaders reported to the CFO, more than to any other executive. Why?
It’s because CFOs have become mistrustful of a CIO’s ability to control IT spending. To fix that problem, they are assuming control of IT themselves. At the same time, they feel that IT has become too rigid in its old ways to support key business initiatives. And to reign in IT spending, CFOs have even taken away the CIO’s spending authority.
Where does this leave IT, when its former tech-savvy leader no longer controls the purse strings?
The cloud changes the IT infrastructure landscape
Then there’s the massive expansion of the cloud.
As software- and infrastructure-as-a-service become commodities, small and medium sized companies find they don’t want or need to maintain their own physical infrastructure. This is especially true for startup companies that, from the start, pay someone else to handle all these IT needs.
Of course, there’s more to running a business than buying some cloud storage and a laptop. As a company grows, its needs for network and data security grows, too. It then has a choice. It can staff its own IT team, or hire someone to design, implement and maintain most everything they need – in the cloud.
That’s where managed IT services come in. These providers can manage part or all of a company’s IT infrastructure needs, from on-premise phone systems and desktops to virtual servers, storage, networks and security. And that allows the growing company to focus on its core business, not building its own staff of IT experts.
So where does the CIO fit in?
For many small and medium companies, IT is now an outsourced service provided by a trusted managed IT partner. And with IT reporting to the CFO, many ask the question: Do we even need a CIO?
Consider that IT is complex. Even if a company outsources all of its IT support and infrastructure to an expert service provider, someone has to steer the technology ship. Someone has to determine the strategy and direction.
While today’s CFO often has to be tech-savvy, planning a detailed technology strategy isn’t always in his or her toolbox. Nor should it be.
That leader may be a permanent CIO, who oversees the managed services provider and ensures it follows the company’s directives. For smaller companies, it might be a part-time CIO who performs the oversight for a number of companies.
Consider a Virtual CIO
Or for some, it might be a specialized advisory service, an integrated part of their managed IT services that’s available as needed to develop an IT strategy, a roadmap and a plan for ensuring compliance.
A Virtual CIO makes sense for a virtual infrastructure and a virtual staff. Because with all the changes in technology and spending going on, you need to know where your company’s CIO is.