In this difficult economy, CEOs are looking over IT’s shoulder more than ever, getting deeply involved in IT strategy and buying decisions, say CTOs and other IT executives involved with technology purchases.
“(The CEO) is very involved when it is an IT-related acquisition at the business level, but depends on me and my team for typical vendor decisions,” says Allan McLaughlin, senior vice president and CTO of LexisNexis in Miamisburg, Ohio. McLaughlin maintains his own team of advisors within the LexisNexis business groups and within the industry that he turns to for advice.
Nearly 92 percent of the CEOs responding to the InfoWorld 2003 Compensation Survey report that they are participating in IT strategizing and planning. Many of the CTO respondents come from small- to medium-sized companies, but IT vendors and other experts say that CEOs at larger companies are also scrutinizing technology buys more carefully.
The size of the purchase affects who has the final say and who is a key adviser more than it did just a few years ago, says John Dinnig, vice president of strategy and planning at Teradata in Dayton, Ohio. “More (IT) decisions are going up to an executive committee. The threshold has come down for any capital-appropriate request. Sales (as low as) US$250,000 to the $500,000 range (are) now in executive committee overview.”
Nonetheless, IT executives still have control when it comes to defining corporate technology standards. Nearly 92 percent of the CTOs, 75 percent of CIOs, and 82 percent of IT directors who responded to the survey say they are choosing their technology standards for their companies. Seventy-eight percent of the CEOs who responded say they set the standards, and most of these — nearly three quarters — work at technology providers.
There are some areas of IT where CEOs are less likely to intervene. “For storage, hardware, and networking, we find those decisions are made by and largely left to the (IT executive),” says Ben Gaucherin, CTO of Sapient Corp., a technology consultancy in Cambridge, Mass. “The only caveat that I’ll put on this is the connectivity and networking infrastructure. We have seen increasingly the other Cs wanting to know about the high level of the connectivity decisions.”
But experts say the CEO may be keeping an eye on IT choices even in areas where IT talent is still at a premium. For example, the enterprise architecture category is one of the bright spots in the job market, as companies look for talent to ease system complexities and drive changes through the business. About 58 percent of those working as a chief architect or enterprise architecture manager say they are key influencers for strategic architecture and buying decisions.
The final decision maker? Eighty-two percent of both CEOs and CTOs say this is their domain.
Because enterprise architecture touches much of corporate IT, the decisions are crucial, affecting everything from revenue generation to accounting practices to compliance with federal legislation. For that reason, top executives feel they must be involved, Dinning says. “We are seeing more CEOs involved in the acquisition decision.”
