In its State of the CIO 2016 report, CIO.com found that just 46 percent of CIOs surveyed report to their CEO. While that’s an increase from the year before, it’s still alarmingly low. It means that well over half report to someone other than the Chief Executive Officer.
What’s behind this continued slump of the CIO’s authority? If companies aren’t relying on top executive-level CIOs to make tough technology decisions, who are they relying on?
A new reporting structure
The autonomy a CIO once enjoyed continues to evaporate. More often than not, the CIO reports to the CFO or COO. That’s not to say the position is endangered. With the rapid advances in tech every year, it’s still a necessary and critical role.
However, CFOs now hold more than the purse strings. They also reserve the final decision-making authority over technology purchases. Leadership is skeptical by default that IT purchases align with strategic business initiatives. Because of that, today’s CFOs don’t grant the CIO as much authority over large expenditures as before.
Other business leaders also clamber for a bigger say in how and on which initiatives IT can spend money. They make it clear that technology initiatives must be collaborative and approved by departments outside IT—or they won’t happen at all.
A fractional position at best
One trend that continues to grow is the concept of a fractional CIO. No, fractional isn’t part of the official title. It just means that not every company needs (or thinks it needs) a full-time CIO.
A fractional CIO is a part-time executive working to align a company’s IT with its business goals. The executive may work with one organization or several at the same time. A fractional CIO has to avoid conflicts of interest if he has multiple client-employers. Either way, it means the CIO’s job has shrunk or can simply be performed with less than a full-time executive.
The popularity of fractional CIOs is rising for many reasons. One is the continued erosion of the business’ trust in IT and how it governs its finances. But the major growth comes from companies not large or flush enough to afford a full-time CIO. These are the same ones that outsource other services not part of their core business competencies.
The rise of the Virtual CIO
Moving further down the outsourcing path, many small and medium businesses (SMBs) outsource all of their technology infrastructure to managed service providers (MSPs). As such, it’s natural that they don’t feel the need for a CIO, or certainly not one in a full-time capacity.
Even so, any information infrastructure needs someone to strategize, plan and oversee major initiatives. Depending on the nature of the company, the need for this planning may be frequent or infrequent. In either case, where do these companies turn when it’s time to reassess their infrastructure needs?
You’d think that this is where large consulting companies enter the picture for a one-off engagement. But SMBs outsource the bulk of or all of their IT. That’s why MSPs are offering virtual CIO services to complement their infrastructure services. And this makes sense, assuming your MSP’s staff is capable of high-level strategy. After all, who better to map new requirements into your infrastructure than your MSP?
The key, then, is to select an MSP that can do more than just provision your services. Select one that can align IT to your strategic business goals.
Wondering how a virtual CIO can help you plan a sound IT strategy for the future, just when you need it? Paranet offers CIO services that complement our suite of professional and managed services. Schedule a consultation to learn more.