When CIOs live in the IT house on the hill, they live well.
In our 13th annual State of the CIO survey, 25 percent of the 722 CIOs we surveyed report that the IT group is perceived by colleagues as a true business peer—or even a game-changer—that can create and launch new products and open new markets. These first-class CIOs identify their top activities as driving business innovation, cultivating partnerships and developing business strategy. They control the majority—65 percent—of spending on IT. They have an excellent relationship with the CEO, reporting to him and sitting on the executive committee. They draw on deep bench strength in the IT group and focus on external activities, such as meeting with customers. And like the CEO and the rest of the C-suite, these CIOs enjoy extra pay when the company reaches sales and profit goals. That's good stuff.
Toiling far from that exalted place, we find the 48 percent of CIOs who acknowledge that their IT groups are viewed by fellow employees as a cost center or service provider. Life isn't so grand there. Their top activities are improving IT operations, deploying new systems and controlling IT costs. Managing IT crises is also high on the list. That sounds like a CIO job description from 1995.
Whether an IT group is a game-changer or a cost center is the subjective judgment of our survey respondents from around the world. We had a strong global response this year, with 41 percent of respondents coming from Europe, the Middle East or Africa. Yet if someone self-reports that they're viewed as a cost center, that's pretty telling. As we plow through this period of digital disruption, where established rules for competing may no longer apply, some CIOs now question what they want for themselves. The profession is changing fast in an atmosphere where colleagues sometimes look upon a traditional IT group as a hindrance to corporate success.
Take heart: Our 2014 State of the CIO research reveals that core measures look good. For example, 44 percent of CIOs report to the CEO, up from 39 percent last year. Tenure is steady at almost six years, while average pay is holding at $219,500. CIOs are carving out significant time to focus on building relationships with business leaders, some spending up to 25 percent of a typical week on it.
But the alarming split in the profession—between CIOs at the top of their game and those who aren't—will alter careers, and perhaps corporate futures as well. There are glaring differences in what the CEO wants this year from each kind of CIO. Cost-center CIOs must finish a major enterprise project, simplify IT and cut technology spending by a set percentage. Game-changers are being asked to lead product innovation efforts and enable global expansion. They make more—$249,000, compared to a cost-center CIO's $182,000—and report healthier relationships with the CEO and CFO. While the percentage of CIOs overall who report to the CEO is up, among game-changers that number is at 64 percent, while for cost-center CIOs it's only 37 percent.
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