Cloud Cuts CIO Clout, Study Says
CIOs are losing their influence a little at a time as off-premise technologies such as SAAS grow in popularity. That’s according to a new survey by technology consulting firm Diamond Management & Technology Consultants. As SAAS continues to weaken IT’s role in organizations, VARs who rely on budget from the CIO’s office may need to take a close look at their sales and service strategies, and realign focus to where the budgets are: the operational the lines of business.
Ten years ago, the CIO’s office was the place to pitch the majority of technology solutions—whether those solutions were technology appliances or end-to-end enterprise application solutions from SAP and Oracle. Sure, the sell was a cross-organizational effort, but, for the most part, the budget sat with the CIO. And, the IT organization possessed the ultimate "thumbs up" or "thumbs down" on new implementations. That is drastically changing.
Diamond asked 724 senior business and IT executives from large companies their opinions on topics relating to the CIO’s role in the organization. Less than 25 percent of respondents thought the CIO’s primary role in innovation is to drive new business value. Only 55 percent viewed the lead IT executive as both a business and IT leader.
Causes of this shift are numerous according to the firm. One of the reasons is the growing adoption of emerging technologies that tend to "side-step" the CIO such as Software-as-a-Service (SaaS) and external cloud solutions. Instead of giving IT domain, technology line items are placed in line of business budgets. Shockingly, Diamond’s recent survey reported that 60 percent of senior business and IT leaders had no idea how much their companies spent on technology last year.
Off-premise technologies are not the only thing driving the weakening of the CIO. Chris Curran, Diamond’s CTO and co-author of the study puts the blame squarely on the CIO.
"The business clearly wants the CIO to drive growth as well as lead the IT function, but it appears nearly half of CIOs aren't delivering on the organization's hopes," said Curran.
The CIO’s responsibilities are numerous; they are the only executive to fill what Diamond calls both "staff" and "line" roles. This means that the CIO has to provide information to run and control the business like compliance information and measurement data while also driving business value through productivity increases, sale impact and innovation that leads to growth. Unfortunately, what occurs is the CIO tends to focus on the tactical, and is never seen as a strategic business executive who drives significant business value.
What’s this mean for VARs? If you’re selling strategic business solutions into the IT shop, you may want to expand your fishing net and branch out into the line of business that owns the value proposition of your solution. This can mean long, hard and piecemeal relationship building as you go from one department to the next closing a deal. However, don’t discount IT, as you may still need to be certified and approved onto the vendor list.
And, it’s not every organization that is putting the CIO in the back seat. Some CIOS are excelling at straddling the line of staff and line roles. When identifying a key CIO target, look at how your customers and prospects align their leadership. If the CIO is a member of the executive management team, involved in decisions affecting growth strategy, and if the tech budget (including SaaS spend) is owned by the CIO office, that’s a good sign to start the process there.