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State of the CIO 2014: The Great Schism

Kim S. Nash | Jan. 3, 2014
Digital strategist or traditional CIO? Our 13th annual State of the CIO research reveals the great career divide.

CIOs must recognize that old IT structures may no longer work, says Mike Heim, CIO of Whirlpool. Since joining the $18.1 billion appliance manufacturer in May 2012, Heim has reorganized IT to better respond to business demands—he calls it "aligning our operating model to the business model." It took his outsider's eye to spot the need. Before coming to Whirlpool, he spent 33 years at Eli Lilly, the last eight as global CIO. Pharmaceuticals and appliances couldn't be more different, he says. Lilly is a high-margin business focused on corporate customers. Whirlpool is a lower-margin consumer business with quick product cycle times.

What he learned quickly about Whirlpool was that different parts of the world require different shapes, sizes and functions in their appliances, which means the giant global company is a surprisingly regional business, he says. Yet when he arrived, he found a centralized IT organization that was slow to respond to local needs and too focused on internal IT processes and metrics rather than business metrics. IT defined itself as a supplier rather than an innovator, he says. "The model created IT scale but not competitive business advantage."

Heim moved e-commerce and applications to regional offices under regional CIOs. Now both nuances and broad differences in local markets get quicker IT attention and, therefore, faster business results, he says.

Relationship Problems
Despite the talk from Gartner and others that the CMO and marketing group are poised to take dollars away from IT, our survey finds that CIOs expect the portion of tech-investment money under IT's control will remain pretty much the same in the next three years: 65 percent now and 66 percent in 2017. Maybe CIOs are sticking their heads in the sand on this issue. Or maybe they're interpreting the facts differently: For Adduci at Boston Scientific, the worried talk about how entities other than IT are funding technology projects misses the point. For example, 61 percent of enterprise technology projects are not financed by IT, according to a recent survey of 1,200 business executives conducted by IDC. But that's as it should be, Adduci says. If a project has a clear business value, funding and sponsorship should come from the non-IT business groups that benefit, he says. We've moved beyond IT for IT's sake, after all.

CIOs may lose control of some IT spending. But the smart ones accumulate capital in the form of credibility and influence. It's in the ability to build relationships, however, that the divide between CIOs is most stark.

The activities that game-changer CIOs plan for elevating IT's relationship with peers this year differ from those of cost-center CIOs. Game-changers, for example, more often plan to deepen the IT bench. Doing so, of course, makes a stronger IT group. But it also makes delegation easier, freeing up time for strategic pursuits. And it instills confidence in business peers that the IT team can handle demands, Carmody says.

 

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