Is the CIO footprint destined to resemble that of the CFO?

Career Steps

Among the functional C-suite roles (i.e., CFO, CIO, CMO, etc.), the CFO has traditionally been positioned and viewed as being more broadly and fundamentally intertwined with the operating dimensions of the business.   Consider the following contrasting views of the CFO and CIO:

  • A 2011 Heidrick & Struggles study reported that about 30 percent of CEOs come from a finance background (sales and marketing came in second)
  • In August of last year Forbes reported that 81% of Fortune 1000 CFOs surveyed felt that their finance group was viewed as a “strategic business partner” and that they themselves were involved in “top-level decision-making” to an unprecedented degree.
  • CIO Magazine reported in its “State of the CIO 2014: The Great Schism” that:
    • Only 25 percent of the CIOs they surveyed in their 13th annual report indicated that the IT group is viewed as a “true business peer–or even a game-changer” by their colleagues, while 48 percent acknowledged that their groups were viewed as a “cost center or service provider”.
    • However, in the same survey 86 percent indicated that “their role is becoming more important to business.”

What has driven this difference between the role of the CFO and that of the CIO, and will new factors drive the CIO profile and organizational dynamic closer to that of the CFO?  (Hint: I think the answer to the latter question is “Yes”)

The Role of Context

In my opinion, the single greatest factor that places the CFO on a different level than his functional peers derives from the notion of CONTEXT.  The CFO’s role in the management dynamic is fueled by his ability (and responsibility) to understand how all the pieces fit together and relate to one another financially.  This view is a critical prerequisite for at least one dimension of strategic thinking.

CFO’s achieve context on a quantitative front from the standard processes of financial consolidation and budgeting.  Each business unit is a piece of the puzzle and one can easily understand how it financially relates to other units and to the whole (at least on a basic level), and CFO’s can overlay the potential impacts of economic trends to have a sense of how this may be changing.

But technology trends and the velocity of the change is making context increasingly important to the CIO’s world, especially the trend toward the ubiquity and consumerization of IT.  Technology is no longer a tool to be used; it is now the air that we breathe, and no one understands that better than the younger generations in an organization.

This means that CIO’s will increasingly have to step into a role that aligns with the CFO dynamic, but on a qualitative, technology front. They need to understand how each business unit is impacted by numerous technologies . . . How this matrix of technologies relate to one another when “consolidated” into a company-wide view . . . How accelerating technology trends will impact the business unit and consolidated view (moving parts within moving parts) . . . And finally how accelerating technology evolution and innovation will shake and shift the entire foundation upon which the view is built.

Given the intertwining of technology into everything we do and its rapid evolution, understanding of technology is often critical to understanding how the company pieces fit together and relate to one another WITHIN THE BROADER SOCIETAL AND COMMERCIAL LANDSCAPE.  Savvy CIO’s will recognize this opportunity to influence the company’s strategy and direction more than ever before.

The CIO’s Challenge

Reading this you may conclude that the CFO has it easy, relatively speaking.   And you’d be right.  The CFO has a Rosetta Stone of accounting principles and the common currency of numbers and quantitative metrics.  The CIO has no equivalent guide.  Their task is much more daunting.

This is not meant to imply that this isn’t currently happening at many companies.  World-class CIO’s earn that distinction by being ahead of the curve on this trend.  And to some degree, this has always been a component of any CIO’s role.  But it is quickly becoming a price of entry for every CIO for companies to maintain competitive position.  No one asks if a CFO can consolidate and budget the numbers and interpret the results and future trends. A similar blanket assumption will be applied to all CIO’s as it relates to technology and it will take new functional operating models to meet these expectations in today’s complex socio-digital world.