Most CIOs ‘not involved’ in key business decisions

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Despite a growing awareness among companies of the need to align the business and IT side of their operations, the boardroom table remains off limits to a majority of CIOs, a recent survey indicates. Conducted by global research firm Penn, Schoen and Berland Associates, the survey was commissioned by technology behemoth HP.

It polled 75 CEOs and 75 CIOs from enterprises in the U.S., Western Europe, Eastern Europe, India, China, Japan, Asia-Pacific and Latin America.

Ninety-nine per cent of the CEOs and 86 per cent of CIOs interviewed agreed that technology is integral to business success.

Despite this consensus, most companies aren’t taking necessary steps to align business and IT, the survey revealed.

For instance, only 32 per cent of companies involve CIOs at the very start of crucial business planning initiatives. Less than half of the CEOs (43 per cent) and just over a third of CIOs (38 per cent) state that technology decisions are included at the early stage of strategic planning.

Companies tend to “either overstate IT’s current role or understate its potential value,” according to an HP statement.

Release of the survey results coincided with an HP announcement that it is undertaking a “portfolio refresh” to support the growing role of the CIO.

“The new reality is that technology doesn’t just support the business – technology powers the business and helps drive growth,” said Ann Livermore executive vice-president, technology solutions group, HP.

Nearly three-fourth of CEOs say accelerating growth, lowering cost and mitigating risk are “very important” reasons to integrate technology with business goals and strategies.

The report said CIOs believe their CEOs and other officers are only now realizing that IT can deliver business value “well beyond the back office”. Only 38 percent of CEOs say they are involved in technology decision making process, but 20 per cent of both CEOs and CIOs would like to see greater involvement.

Although attitudes are changing, many enterprises still perceive IT departments as strictly technical domains, according to Michelle Warren, analyst, Info-Tech Research Group Inc., London, Ont.

She said “huge blocks of the business society still view IT as expenditure rather than a revenue generator.”

But she said, in Canada, the integration of IT and business functions is happening at a faster pace.

That’s because “we have a large number of SMBs (small and medium scale businesses), where CEOs and CIOs wear multiple hats and have a greater chance of broadening their view,” she said.

HP says the industry such initiatives to align business and technology is leading to the advent of the “era of business technology (BT)”.

The transformation highlights the growing importance of CIOs in the corporate environment, according to Geoff Kereluik, vice-president, marketing and alliances, HP Canada.

In response to the changing business climate, HP is developing tools aimed at enabling business decisions, lowering cost and mitigating risk, said Kereluik.

One such product is Neoview, a high end data warehouse management system designed for complex query handling and 24/7 data centre operations, said Dick Bird, business unit manager, HP Canada.

Bird said Neoview provides IT administrators with a greater ability to generate reports that are vital for product lifecycle management, security and regulatory compliance.

Bon-Ton Stores Inc., a department store chain based in York, Penn., was among the U.S. companies that tested Neoview.

The system was deployed at the time when the chain was undergoing a rapid expansion that saw its 137 stores increase to 279, said James Lance, senior vice-president and CIO, Bon-Ton.

He said Neoview was instrumental in reducing his department’s application development time and cutting server operation cost.

Using Neoview’s development tools, Lance’s team was able to create a vendor analysis application within three months time. He said it would have taken them six months to accomplish the same work with their previous tool.

Excluding CIOs from the boardroom table would be a major disadvantage for corporations, according to Warren.

She said companies should take advantage of the expertise CIOs bring to the table.

Many C-level executives have yet to “utilize IT to its fullest potential,” an HP advisory said.

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