CIOs under pressure to meet revenue targets
Chief information officers are increasingly being assessed on their ability to drive IT to achieve revenue targets, according to a study by the Massachusetts Institute of Technology (MIT) Sloan School of Management.
Conducted in 2007, the study covered over 220 chief information officers from more than 30 countries. A number of senior executives in non-IT positions as well as over 1,250 IT executives were also interviewed.
Peter Weill, senior research scientist at the school and director of the institute's Center for Information Systems Research (CISR), said at a conference in Singapore that an increasing number of chief information officers are indicating they have to "fulfil revenue targets" and improve share prices. The event was organised by Tata Consultancy Services (TCS), which is a research patron of the CISR.
Weill added that chief information officers are also assessed for their management of IT service quality and costs, the ability to attract and retain talent, project and budget management and their contribution to "strategy conversations" with other top-level executives within the company.
DK Sharma, Citi's head of international technology organisation for global consumer group, noted that chief information officers, including himself, are also assessed on how they can minimise -- if not remove -- the complexities of applying technology to the business.
The banking industry veteran, who has been with Citi for the past 19 years, added that his personal scorecard also indicated the number of innovations he must introduce to the organisation.
K Ananth Krishnan, chief technology officer at TCS, told ZDNet.com.au sister site ZDNet Asia at the sidelines of the meeting that chief information officers need a balance of technology and business orientation.
"Chief information officers will have to be [more than ever] the link between what their businesses are about and what technology can deliver to those businesses," he said.
According to MIT's Weill, there are four distinct categories of chief information officer: the "services CIO" manages and provides the IT infrastructure; the "embedded CIO" works closely with non IT colleagues on corporate and business strategies; the customer-focused CIO works with external stakeholders; and the non IT or project-related chief information officer handles tasks not necessarily within the usual scope of an IT head.
Weill noted that chief executives interviewed in the study expected their chief information officers to spend up to nearly 20 percent of their time wearing the customer hat, compared with the seven percent to eight percent that chief information officers spend working with clients.
Going forward, Weill said that chief information officers will be expected to participate more in sales and customer interaction, as well as take on more "portfolio" roles, such as driving new markets, products and services or leading "green" efforts.
"The CIO of the future will incorporate IT service provision and business process digitisation into the 'DNA' of the company," he said.
Weill warned, however, that it would be impossible to expect chief information officers to be good in all the areas, adding that tradeoffs in time allocation among the various roles would be necessary according to the needs of the organisation.