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More CIOs report to the CEO, underscoring IT’s rising importance

Clint Boulton | May 25, 2016
With digital strategies increasingly taking center stage in many businesses, more CIOs are reporting to the CEO. However, the tech talent dearth threatens CIOs ability to conduct their work.

Snyder says the CIOs' rise to direct report and partner to the CEO means that talk of turf wars among CMOs, and more recently with CDOs, is fading. For example, while the number of CDOs spiked to 17 percent in 2015 from 7 percent in 2014 in their previous surveys, Harvey Nash and KPMG found that the number only rose only 2 percent to 19 percent for 2016. This suggests the CDO hype has peaked and that CIOs remain the most integral C-suite leader to shepherd the current transformation wave.

Moreover, Snyder says that evidence that CMOs will control the bulk of technology spending is not materializing. While marketing may be spending more money on technology than it has in the past, it still requires CIOs to connect systems of engagement to back-end systems, including connecting newer cloud software to legacy systems. As a result, Snyder says IT (16 percent) is almost twice as likely to “own” digital as its marketing peers (9 percent). "The whole digital thing is not just digital lipstick on the marketing pig, but is rather a move to create stable, sustainable systems," Snyder says.

Other data points of note from the survey:

  • 57 percent of CIOs sit on their corporate board, up by more than half from 11 years ago.
  • CDOs are twice as likely to report to the CEO (46 percent) than to the CIO (21 percent).
  • Women in senior IT leadership roles has risen by a third, up from 6 to 9 percent in the last year.
  • 16 percent of the U.S. survey respondents were female, compared to 11 percent of the global respondents.
  • A third of IT leaders have a formal diversity initiative in operation, and a further 23 percent have plans for formal initiatives in future.

Curb your enthusiasm

While the tone of the Harvey Nash/KPMG survey is bullish overall, it’s still the early days for the current digital transformation wave. Another recent study by KPMG (conducted with Forbes Insights) reported that based on a poll of 509 executives in North America only 25 percent of enterprises have an integrated digital strategy and just over 20 percent believe their organizations are highly advanced at applying digital initiatives to deliver business value. That could pose a problem at a time when digitally native companies such as Uber, Amazon.com and comparable disruptors across various industries are poaching customers from analog companies.

The survey offers a sober window into a harsh reality. Most companies don't have a progressive strategy that meshes and mobilizes the online and physical worlds. Those businesses risk losing customers to more digitally savvy rivals. Moreover, companies that have fragmented efforts or bet on the wrong strategy entirely can lose years in market momentum.

“Digital startups are eating away at pieces of legacy value chains and completely disrupting the business world,” says Rick Wright, KPMG U.S. digital and mobile solutions leader.

 

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