CIOs undervalued and under-utilised: Ernst & Young

CIOs undervalued and under-utilised: Ernst & Young

Summary: Only 17 percent of CIOs are considered part of top-level management, with many other executives perceiving them as lacking in business skills or experience, according to Ernst & Young.

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TOPICS: CXO, IT Employment
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CIOs in some organisations have been under-utilised and excluded from the executive management team, according to Ernst & Young.

In the professional service firm's report, The DNA of the CIO, only 17 percent of CIOs are counted among the top management group, and just 43 percent of people in that role are involved in executive decision making.

Ernst & Young surveyed over 300 companies around the world, ranging from multinationals to SMBs, to compile the report. With organisations increasingly turning to technology to drive business efficiency, productivity, and cost reduction, it is paramount that the CIO is in the same league as other top-level executives, according to Ernst & Young IT advisory leader Jason McLean.

But the report revealed surprising sentiments from other C-level executives, many of whom have apparently failed to support their CIOs. Around 38 percent of CIO respondents said that they lack support from other executives, especially in companies with revenues of over US$1 billion.

While 60 percent of CIOs think that they add strong value to their companies, only 35 percent of their executive peers agree. According to the report, many still don't view IT as a business enabler, with a number of executives interacting with CIOs purely to discuss IT budgets, instead of how technology can drive business outcomes.

"Business executives felt the role of the CIO was not driving the types of enterprise value they may expect," McLean told ZDNet.

While CIOs are recognised for their technological expertise, many executives still don't think that they have the right level of business skills or experience, he said.

"I don't think there's blame to be put on any stakeholder group, but it was an interesting perception of business executives around that role," McLean said.

He stressed that this view is not widespread, but did come through in pockets of the organisations surveyed.

Top-level management needs to be educated on the speed of change in technology agendas, and new IT opportunities should be integrated into business plans through the delivery of new technology capabilities, according to McLean.

The report also revealed that 49 percent of CIOs have a degree in IT, while only 10 percent hold a master of business administration. Most CIOs also spend their careers dealing with IT alone.

Last week, Commonwealth Bank CIO Michael Harte said that it is vital for IT professionals to be well versed in both technology and business management.

"The further education agenda and engaging with broader executives is a crucial role for CIOs," McLean said. "The ability to be 'multilingual,' in a sense, being able to understand technology and business environments, is crucial for that role to be successful and sustainable."

Even so, he was unsure on whether CIOs will escape from the predicament of being overlooked by senior executives in the near future.

"Certainly, it is an important thing we should change," he said. "I don't know if it will change in the next few years completely across the board."

The DNA of the CIO report also created a profile for the average CIO: a 43-year-old male who has been in the role for five years, who usually works in the role for around seven years, has less than one in five chance of getting a seat at the top management table, and can improve on communication and leadership skills.

Topics: CXO, IT Employment

Spandas Lui

About Spandas Lui

Spandas forayed into tech journalism in 2009 as a fresh university graduate spurring her passion for all things tech. Based in Australia, Spandas covers enterprise and business IT.

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  • This proves...

    that top level executives are very perceptive. They may not know exactly how they are being snookered, but they know they are. Why not put IT under the business unit head and leave what would have been the CIO position open? Martin Marietta used to do this, and it worked well. Each department could then grab a Computer Services person to help them on demand instead of IT pushing the cart. The business lead should, hopefully, be a LOT more skeptical on the multimillion dollar IT projects that promise the moon.
    Tony Burzio