Should any doubts linger, CIOs and CTOs are techies first no more.
The corporation’s top IT executives are spending more of their time than ever on business issues, such as finding ways to generate revenue and speed products to market through the adoption of new technology, rather than worrying about day-to-day operations of data centers or networks.
The trend of CIOs and CTOs focusing on management concerns rather than IT infrastructure isn’t new. But experts say it is accelerating as corporations emerge from the latest recession, offload more IT functions to outsourcing companies, and adopt cloud-based applications.
“That trend — CIOs more involved in business issues that involve technology instead of focusing on technology infrastructure — has been gaining steam for years,” says David Foote, president and CEO of Foote Partners, which tracks IT hiring and compensation in North America. “[I’m] noticing that the CIO job has vanished at several employers as they distribute IT strategy, investments, staffing and decision-making all over the enterprise. At some companies, the CIO now just manages external relationships with vendors and managed service providers and participates in tech and information strategy.”
“Running IT infrastructure hasn’t been a top priority for CIOs for a long time,” agrees Mark Polansky, managing director of the Information Technology Officers Practice at recruiting giant Korn/Ferry. “What’s been happening is that CIOs are delegating their infrastructure either internally to a CTO or externally to an outsourcer or more recently to the cloud. … Infrastructure is not strategic. It has no value-add. It’s all about providing world-class service and availability on a world-class price/performance basis.”
A recent survey of CIOs and CTOs by the Society for Information Management (SIM) highlights this trend.
The SIM survey found that 84% of CIOs were “always” engaged in the allocation of IT infrastructure resources, but only 20% of CTOs were “always” engaged in the allocation of IT infrastructure resources. On the flip side, 4% of CIOs and 47% of CTOs said they were “never” involved in these decisions.
These numbers were surprising to Professor Jerry Luftman, executive director of graduate information systems programs at Stevens Institute of Technology, who conducted the SIM survey.
“Only 84% of CIOs are always engaged in IT infrastructure. That should be 100%,” Luftman said. “This shows confusion about the CIO and their role on IT infrastructure. … Even if they’re outsourcing their infrastructure, they’ve got to be involved in the decision making. They can’t let the vendor do it all.”
Luftman said the results for CTOs were “even nuttier.”
“IT infrastructure ought to be part of the CTO’s job,” Luftman said. “The CTO in a commercial environment is the engine room guy. This is the guy in charge of the network, the hardware and the systems. … The titles must be changing.”
Luftman said CIOs and CTOs appear to be less focused on IT infrastructure as they increase their use of outsourcing companies to maintain existing systems and applications, create new applications and operate data centers. The corporate push to cloud-based services will accelerate this trend, he said.
“The trend clearly is to reduce the amount of IT infrastructure that is run or maintained in-house,” Luftman said. “The cloud is something that will facilitate that. …We’ve learned that IT infrastructure is not how we differentiate ourselves. We differentiate ourselves with applications and services that run on the infrastructure.”
The shift is evident in how CIOs spend their time. In the 2011 SIM Survey, CIOs said they spend 77% of their time on business issues — such as managing relationships with business units, IT staff and vendors — and 23% of their time on technical issues such as architecture, operations and software development. In 2010, the split was 74% of time spent on business issues and 26% on technical issues.
CIOs are more “business people than techies,” Luftman said. “A good CTO is somebody who is focused on the technology. … But I think the less technical the CIO, the better.”
Polansky agrees CIOs should not be too technical.
“Leadership, leadership and leadership. Those are the three things that you most need in a CIO,” Polansky said. “You need the ability to lead the IT staff, to lead your peers and to provide IT leadership for the senior-most executives and the board. This means being able to create a vision, to couple an IT strategy to the business strategy, and to deliver against that vision. It means you need the power of influence and persuasion that makes people have confidence in and believe in and follow the CIO and his vision for IT.”
Polansky says that CIO is still the title of choice when corporations hire their top-most IT executive. Most CIOs have delegated IT infrastructure to one of their direct reports, often with the CTO title. CIOs also typically delegate responsibility for IT applications to one of their direct reports.
What’s new for CIOs is that they’re focusing less on using IT for cost-cutting and more on revenue generation, Polansky said.
“Three years ago, the emphasis was heavily on cost containment, cost management and even cost reduction. So the skills and abilities to cut costs while having minimal or no impact on service delivery were key,” Polansky said. “Today, most forward-thinking companies have done most of the cost cutting they will do. Now the emphasis is on driving the top line, creating value through facilitating new products, new services, new markets.”
Polansky said the need for CIOs to focus more on business versus technical issues is strongest at large multinationals. The CIO of a Fortune 25 company, for example, might focus 100% of his or her time on business issues, while the split might be 50-50 for a small business.
“Corporate America is moving past legacy hardware, software and IT management into IT being more strategic and enabling more transformational leadership,” Polansky said. “So the demand for the good ideas from CIOs is actually accelerating.”
That’s certainly the shift at Denver-based Red Robin Gourmet Burgers, where Chris Laping has two titles: CIO and senior vice president of business transformation. He likes the second title better.
“My No. 1 responsibility is enabling and driving change,” Laping said. “We can change people with technology. We can change people with learning. We can change processes. Technology is a tool in the toolbox around change, but we don’t orient the organization around just technology.”
Laping says that he is in his 11th year of having the title of CIO, which he finds too vague.
“People just don’t get that [CIO] title,” Laping said. “The rest of the world thinks I’m a press person in charge of disseminating information. CTO is actually a more cogent way of explaining externally what we do.”
Some IT execs prefer a different title than CIO or CTO altogether. Jon Green, vice president of IT at Den-Mat, a Santa Maria, Calif., maker of dental supplies, said he is revamping his staff to focus more on business issues and less on technical support.
“I cut my IT staff in half last year and doubled my IS staff,” Green said. “We’re no longer running laptops. We’re out in the business, figuring out processes and educating people on systems.”
Green said his team covers everything from IT infrastructure to business analytics, and that his vice president of IT title covers the gamut of his responsibilities.
“I’ve had the CIO title. I’ve had the CTO title,” Green said. “In this job, I report directly to the CEO, and all of us work as a team. The title is less important to me than the business infrastructure.”
The CTO title remains popular with software companies, where it usually refers to the person in charge of product development rather than internal IT systems. Sometimes, the CTO handles both functions, as in the case of Gregory Carter, who recently became CTO of EDGAR Online of Rockville, Md. Carter is leading the company’s push into cloud-based services but also oversees IT operations.
“I’m going to be setting the technology and product vision around expanding our horizons and taking the tacit knowledge that we have as experts in financial filings and disclosures through our full-service disclosure business and turning that into software and cloud-based services,” Carter said. “I’m also responsible for developing all of our internal products … the tools that our internal financial analysts use to process corporate data and turn it into highly accurate regulatory filings.”
Carter said it makes sense for him to handle both the CTO and CIO job functions because there is so much overlap between the technologies that EDGAR Online provides to its staff and customers. “As we move to software as a service, it’s just a natural for me to handle the IT operations because instead of building two of everything, we want to build one of everything,” he said.
Carter said he prefers the CTO title to the CIO title. “Being a CTO is a much more customer-focused and customer-facing role, and it’s about producing things to sell,” he said. “CIOs are focused on financial and other metrics. It’s an inwardly facing role.”