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CIOs must have IT and business sense to stay relevant, study says

Another study drives home the need for CIOs to be good businesspeople, not just good tech people. Without business sense, a CIO can be on the outside of the executive suite looking in.

Today's CIOs must be IT and business-savvy, all while exhibiting outstanding communication, negotiation and marketing...

skills. They must be a visible force within the enterprise, capable of balancing the knowledge of the company's specific area of business while simultaneously showing how IT can make possible the ambitions of the enterprise.

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The alternative to the above is marginalization, downsizing and reduced responsibility, terms that are growing in infamy amongst IT executives as budget cuts and application development budgets are moved into the hands of the lines of business (LOBs).

However, a research note released by the Robert Frances Group (RFG) entitled "CIOs: Marginalization is Not Inevitable," encourages CIOs to adopt specific strategies to remain an integral part of their business and to view the move as a positive step, not a death sentence.

RFG believes the movement of application development budget back to the LOBs and the ongoing operation budget cuts have begin to erode and marginalize the role of CIO -- however, this need not occur and is not inevitable.

In the report, authors Cal Braunstein, the CEO and executive director of research for RFG, and research analyst Sara Braunstein stress key traits they have found successful CIOs possess in the enterprise. "CIOs should build trust with executive peers by communicating in business terms, meeting expectations, having an understanding of the company's specific areas of business, and showing how IT can enable business goals, objectives and strategies," the report says.

Communication is the key

Communication is a trait touched upon several times throughout the report and is part of RFG's list of "Top 10 traits of a successful CIO." Leader, marketer, negotiator, politician and strategist also make up the list, which Sarah Braunstein compiled after conversations with RFG clients.

"We know there are CIOs who do this today, but we also know there are executives who are experiencing difficulties in the environment they are in … the fact that you were once one the world's greatest programmers is not relevant … [this is] not to say it's not important, but it does not make the top 10 list," Cal Braunstein said.

If CIOs aren't involved, they are incapable of learning about their internal customers' requirements and making wise IT investments, the analysts write.

A lack of communication between IT and business could lead to individual LOBs investing in solutions on their own and shadowing IT organizations. These solutions may not integrate well with the existing IT architecture and in the long term may inhibit the ability of the organization to be agile and competitive in the market. Thus, the CIO is needed to bring coordination and focus to technology initiatives in order to ensure the enterprise remains flexible and elastic.

Rooted in a recession

"IT to most companies represents a black hole of spending; there is no trust, no accountability -- there is a negative attitude that relates to IT. IT was something not understood by executives, [which lead to] communication woes," Cal Braunstein said.

Braunstein said that during the recession, CEOs often treated IT departments like they could other parts of the company, often cutting budgets because they did not believe it harmed the company.

IT to most companies represents a black hole of spending; there is no trust, no accountability -- there is a negative attitude that relates to IT. IT was something not understood by executives.
Cal Braunstein
CEO and executive director of researchRobert Frances Group
"Secondly, because there has been this issue with budgets overall, more and more budget money for projects has been controlled by LOB executives," he said.

Many organizations downsized staff, outsourced projects and moved application development budgets back under the realm and responsibility of the LOBs, and in the process marginalized the role of the CIO in many enterprises, Braunstein said.

Braunstein said some of the blame could also fall on the shoulders of the CIOs, who "for the most part have not explained where the money has been going."

"What we've been trying to do to is get the executive relationship executed and committed. The point is to explain money received and service provided … are you meeting those expectations, exceeding or not?" Cal Braunstein said.

"If you're an [IT] executive, you need to know something about technology, but the real point for success is knowing how to manage the technology and deliver user relations, vendor relations, employee relations -- these are more important than understanding pure technology," he said.

"My point for the note is not a statement that there is a need for people to change … if you're experiencing difficulties, then do a self-evaluation and recognize where shortcomings are … achieve objective … [it's a matter of what the strategy is versus the how, or tactics and operations of IT]."

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