It is not surprising in our line of work (Value Engineering) because our studies show that less than 50% of IT projects ever set out to achieve any business benefits and a fraction of those ever measure the value created for business.

There are great CIOs that are not only reporting to the CEO but are sitting on the board. I think ultimately this is really very simple.
If you are viewed as someone that constantly creates business value for the enterprise and help drive the business then you will be in the boardroom. If not, you are infrastructure cost and should be slowly but surely reduced as a drag on earnings.

Christopher,

I appreciate the research and concur with your assertions that the CIO and IT need higher visibility under the CEO in order to be viewed as a strategic component of the organization. Speaking of IT as a strategic partner versus that of a support role, Allan Alter (see http://blog.eweek.com/blogs/research_central/archive/2006/09/01/When_CIOs_Report_to_COOs.aspx) noted from a recent eWeek survey that "CIOs in support/staff IT functions are twice as likely to report to CFOs, and considerably less likely to report to CEOs."

These findings corroborate the CIO survey as to the strategic versus support role IT plays - as indicated by their reporting relationship to either the CEO or CFO. However, reporting directly to the CIO by no means guarantees that the IT function will be viewed as being strategic, or that IT will have a positive contribution to business change and growth towards competitive advantage. In this regard, my assertion is that CIOs needs to lead their IT organizations (including people, processes, tools, and technology) in such as to be effective and efficient simultaneously - a difficult task, but with the tools available today, this will mark the future of the flexible IT organization that is able to respond to business demand as a strategic partner - regardless of reporting relationship.

The lack of IT flexibility as a means to achieve equilibrium between IT "supply" and the ever-growing demands of business is evident in both research and practice. In fact, when IT cannot delivery technology-based solutions that are both effective and efficient, then IT becomes viewed as barriers to business growth rather than as enablers. Therefore, is it any wonder that IT is typically viewed as being a support organization and not as a strategic partner? Will changing organizational titles or alignment improve flexibility? Forrester thinks so...

A recent Forrester Research study indicates that the causes of IT ineffectiveness rest with the CIO as well as the lack of strategic understanding and/or funding provided by the CEO. In their report titled: "Business Technology: Do Business Execs Get IT?" (see http://www.forrester.com/go?docid=40373), Forrester elaborates on ways to solve this apparent gap. These are in the areas of alignment (i.e., CIO reporting to CEO); organization (IT renamed to BT, for "business technology"); and awareness, in that, the CIO needs to create greater awareness as to the strategic value of IT (BT).

In conclusion, there appears to be multiple factors involved whether IT is viewed as a strategic partner or simply as a support function/utility provider. Organizational alignment certainly affects perception and possibly funding, but is it the sole or even primary factor that keeps IT organizations from being effective? In my opinion, CIOs and IT as a whole need to continually innovate and to "compete" - just like their business counterparts. When IT gets complacent and does not innovate, then IT risks being viewed as a support role rather than a strategic partner that is able to adapt and change to more effectively meet the business need and to achieve sustained competitive advantage.

Best Regards,

Since when is "an efficiency maker or cost reducer" not strategic? Why is it strategic to outsource manufacturing to save cost, why is it strategic to create an effcient inventory process; yet the IT system which achieve this are not? That ain't the root cause for IT reporting down the chain, the root cause is the CEO's knowledge of IT. They just don't understand the costs (support) and technical complexity, and therefor don't want to deal with it. That is what I believe the real reason is.

Another item for thought, the PC, which itself is another problem. We should have called it the BC "Business Computer". What is un-strategic is the fact that so many others in the oganization think they are CIOs, and have a better knowledge of how IT can be strategic, becuase they understand a PC. Go figure, sales people call them, and they get ideas that really are nothing but a bunch of.... , and then start to trump them, when they dont have a clue. That and PCs are personal, you use them for personal things. Like your PC for CIO mag., how often do you use this for your own personal use, more then you would like to admit. Unless business ever comes to terms that a computer is a BC and not a PC, it will never think IT is stratigic as well.

I think your article is awesome! It hits at the heart of a lot of the issues that CIOs have to deal with. I see it a little differently though, which you did not cover.

For one, for years people have been assigned the responsibilty of CIO but without all the bells and whistles. Then you notice the organization and how they do IT and you'll know the reasons. You will also notice the problems within organizations in IT planning, you will see that their mistakes are relatively basic IT operation issues; not planning properly or not researching issues.

Then when all the dust settles, the CIO is sitting there pointing fingers because they do not know better. I think this is why CFOs are the ultimate person responsible. Within organizations this has to change for the issue of efficientcy alone and start getting QUALIFIED CIOs that know their business and know it well. Especially in the listening department and allowing IT professionals to do the blunt of the work.

I agree with you though, CIOs should and must be part of the reporting factor to the CEO. CEOs will start seeing the benefit very quickly on the reasons why. Just my opinion.