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Does it matter who CIOs report to?

Gather the typical left-brain, articulate, umm-less group of CIOs around a conference lunch table and, guaranteed, the talk will eventually turn to reporting relationships. You answer to whom? Since when? How is that working out?

CIOs, as I take the editorial liberty of saying in my story today on, tend to scrutinize reporting lines like entrails or tea leaves- a portent of how well they’re doing and where they’re headed.

Any CIO I’ve queried on the topic thinks it’s best to have a direct line to the CEO. Makes sense. Sure, you’re turning somersaults to please the business, and likely with a polite smile on your face — who can you escalate to, if the CEO is telling you what to do? But better to have the ear of the head honcho than not.

The Forrester study of 503 IT execs by analyst Bobby Cameron pretty much bears this out.

CIOs who report to CEOs have the largest budgets, as measured in terms of percentage of total company revenue. Your job comes with a centralized planning function and so you are more likely to manage IT through centralized offices — PMOs, vendor management. But – and maybe this is a function of playing in the big leagues by big-league organizational rules – you’re a little down on IT’s ability to be a game changer for your business, unlike your counterpart who reports to the COO.

Woe to you who report to the CFO. I feel your pain, right through the measured tones of Cameron’s data-filled summary of the survey.

By the way, the CIO-to-CEO reporting relationship now constitutes the largest cohort, while the number of CIOs reporting to the CFO has shrunk over the past three years. As business becomes more appreciative – and, yes, knowledgeable – about the impact IT can have on the company, Cameron says he expects to see another shift of CIOs reporting to operations officers.

Check out the story for more details.

When I caught up with Cameron on his cell phone last night, he told me a couple of interesting anecdotes about CIOs expanding their reach. (Like most Southerners, he’s a natural story teller.) At Jet Blue, for example, the CIO owns marketing. Hewlett-Packard, for a time anyway, put the CIO in charge of supply chain. He sees the trend continuing as IT makes the transition that Forrester has been pushing for years – to BT, business technology.

Let us know to whom you report, and the plusses and minuses of that reporting relationship.

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Interesting reading indeed; last week in a round table meeting with the editors of another IT publication, which had conducted a survey of 500+ US CIOs and 400 odd CXOs, it was evident that the reporting relationship is one of the nemesis of the IT organization. Their illustrations on the priorities as seen by the CIO and their business functions were far removed from reality which tends to indicate that the IT Organizations in the US are as yet struggling with the basic paradigm of getting noticed and heard, leading to minimal participation in the strategic directions of the enterprise (there may be exceptions, but they are exactly that, exceptions). The dozen odd CIOs present in the room (in Mumbai, India) almost unanimously contradicted the survey by turning the priorities upside down. It was also a function of the fact that everyone, repeat everyone in the room reported to the CEO and a few had positions at the Board of the Company. If only one third of CEOs are willing to spend time with their CIO, the struggle for the CIO will continue and such organizations will rarely move beyond incremental benefits with the help of IT. In Asia and more specifically India (the capital of IT outsourcing, and hoping to drive adoption too), there is a learning for the CEOs in US to assess how IT can indeed be a differentiator to their business growth and profitability if managed well and actively with the CIO. IT is too important a function to be under the jurisdiction of another CXO; this reality continues to elude a lot of CEOs and Board of Directors.
Good article. Their is high correlation between to whom the CIO reports and how the company understands the value of IT (as a critical business enabler or necessary evil).