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CIOs still vie for business credibility

A new survey reveals that CIOs want to drive strategy, but the opportunity continues to elude them.

Despite ambitious efforts on their part, the opportunity to play a major role in their companies' business strategies continues to elude most CIOs.

According to a recently published IBM CIO Leadership Forum Survey, 86% of CIOs want to participate in creating corporate strategy, but only 43% are actually doing it.

CIOs are definitely getting more involved in setting business strategy and directing business transformation, according to Larry Bonfante, CIO of the United States Tennis Association (USTA), the White Plains, N.Y., organization that governs professional tennis. But it's slow progress.

"I certainly think the potential is there, but I think it's a cultural shift and an educational process and it's going to take some time," said Bonfante, who is part of the 43% that plays a role in driving his organization's business strategy. "There are some organizations that are further ahead of the curve than others. I think it's a trend that's picking up speed."

I think we've gotten to the point where we're viewed as a business partner. But we're not viewed as a strategic enabler yet.
Larry BonfanteCIO, United States Tennis Association

A key reason why they are not called upon to play a more active role as business leaders is this misperception on the part of other executives about what the role of the CIO should be, said George Pohle, global leader for the IBM Institute for Business Value.

Indeed, IBM's survey asked about 170 CIOs to name the primary barrier preventing them from having greater influence as business leaders. The leading answer, cited by 31% of respondents, was the misperception of the CIO role by other executives. A failure to understand the importance of IT was given by 12%. Another 28% said a lack of business skills and competencies in IT holds them back.

Pohle compared the evolving perception of the CIO to that of the CFO. Today, the CFO is a key member of any management team, but that wasn't always the case.

"The CFO function was primarily an accounting job," Pohle said. "The present CFO role emerged over time because a lot of aspects of financial management changed how businesses are run. Now the role of the CIO has changed. In the world before PCs, there were fewer applications to run and less of a company's operations were dependent on a CIO. Now technology is so integral to most businesses that they can't possibly extract themselves from technology."

Despite this dependence, many executives still view CIOs as caretakers of a utility.

"I think executive management in the business and people on a board level need to think differently about IT," Bonfante said. "IT has been viewed either as a utility or a service provider. There is a business case for IT to be viewed as a business partner and as a strategic business enabler driving innovation. Unless the business is in a field where technology drives the industry, it's just a mind shift that's happening over time."

So close, yet so far

The IBM survey found that 42% of CIOs report directly to the CEO, so CIOs obviously have the ear of their business leaders. The key problem is what should CIOs say and do to get more involved in setting corporate strategy.

Jim Prevo, CIO of Green Mountain Coffee Roasters Inc. in Waterbury, Vt., said the DNA of the company is now run on information systems. "There are a lot of moving parts that are all integrated. The old days of data processing and accounting, people entering data and printing out orders, has gone by the wayside."

Prevo said all of Green Mountain's business processes are run through transactions on its IT systems.

"It's all on one system, so I think it's very important when talking about changing the business, mergers and acquisitions, moving into new categories -- all of those discussions have an impact on transactions," Prevo said.

Prevo was part of the conversation when his firm recently acquired a brewing company and was trying to figure out how to integrate that data.

"By having me at the table, they could talk realistically about the amount of effort it would take to pull off the integration or whether we would want to do that integration. It just helps getting all the information into the room so no one is laboring under the false impression of the work it will take to do it."

Prevo said he participates in his company's weekly leadership team meetings, where Green Mountain's future is regularly discussed.

"I do interject my two cents, not only on technology, but overall strategy, whether technology is involved or not," Prevo said. "I can credit the founder of the company, Bob Stiller. When I was hired in 1993 as the company's first formal IT leader, it was a CIO position and I worked for the CEO. I had a seat at the leadership table. Bob saw information systems as critical to moving the company forward."

So why aren't more CIOs sitting in these leadership meetings?

Bonfante said his organization was viewed as a utility when he first joined it.

"I think we've gotten to the point where we're viewed as a business partner. But we're not viewed as a strategic enabler yet," Bonfante said. "We're working on that process. I think that you've got to demonstrate and communicate the way IT has contributed to the bottom line through revenue generation, business process reengineering or new efficiencies. You've got to articulate and demonstrate how IT can be leveraged to change the game."

Bonfante said his organization invites him to the strategic table some of the time, "but not as much as I'd like it to be."

He cited one small example of how he was able to contribute to strategy that he hopes will drive revenue.

"We had a meeting regarding our support of the U.S. Open, and what we were trying to accomplish. We were able to articulate that through the use of wireless technology, we could potentially enable standalone food concessions to take credit rather than just cash. We'll see this year [whether it drives revenue]. We're implementing it at the end of August."

Let us know what you think about the story; email: Shamus McGillicuddy, News Writer

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