CIOs must 'fulfill revenue targets'

update IT heads will increasingly be expected to be more sales- and customer-oriented, even taking on roles such as identifying new markets, says U.S. researcher.

update SINGAPORE--Chief information officers (CIOs) 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 CIOs from more than 30 countries, including eight from the Asia-Pacific region. 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 Thursday at a conference in the island-state that an increasing number of CIOs are indicating that they have to "fulfill revenue targets" and improve share prices. The event was organized by Tata Consultancy Services (TCS), which is a research patron of the CISR.

U.S.-based Weill added that CIOs are currently 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.

D. K. Sharma, Citi's head of international technology organization for global consumer group, noted out that CIOs, including himself, are also assessed on how they can minimize--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 organization.

K. Ananth Krishnan, chief technology officer at TCS, told ZDNet Asia at the sidelines of the meeting that CIOs need a balance of both technology and business orientation.

"CIOs 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 CIOs: 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 CIO handles tasks not necessarily within the usual scope of an IT head.

Weill noted that CEOs interviewed in the study expected their CIOs to spend up to nearly 20 percent of their time wearing the customer hat, compared with the 7 percent to 8 percent that CIOs actually spend working with clients.

Going forward, Weill said that CIOs 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 digitization into the 'DNA' of the company," he said.

Weill warned however, that it would be impossible to expect CIOs 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 organization.