CIO Reporting Relationships


Found these interesting paragraphs in a story in CIO Magazine on their annual CIO survey:

There has been a corresponding change in your place on the org chart. Just over three-quarters of you now sit on the company's management committee. Your most prevalent reporting relationship is to the CEO. That's been true in all of our "State of the CIO" reports, but since 2002, in response to the cost-cutting fixation that gripped many companies and the fearful reaction to Sarbanes-Oxley, the percentage of CIOs reporting to the CEO had been going down while the percentage reporting to CFOs had been going up. This year, however, the percentage of CIOs reporting to the top boss rose from 40 percent to 42 percent, while those reporting to their CFOs dipped sharply from 30 percent to 23 percent.

The significance of this shift is both personal and professional and can be seen in the diverging circumstances of these two groups of CIOs. Of those CIOs who report to their CEOs, 91 percent sit on the company management committee, whereas only 61 percent of CIOs who report to their CFOs do so. The CFO reports say they struggle more with alignment and spend more time putting out fires than do the CEO reports. The CEO reports have much more money to spend (their average annual IT budget is $27.5 million versus $12.5 million for the CFO reports), and they take home more money as well ($196,800 in average annual compensation versus $180,700).
From Your Agenda 2006 Page 2 - Editorial - CIO
Referenced Thu Jan 05 2006 11:37:16 GMT-0700 (MST)

When budgets were tight, moving the CIO to a CFO reporting relationship must have seemed like a good idea because it made sure that reducing cost was the number one priority. It's no wonder, however, that this reduced business alignment. CFOs, as a rule, aren't particularly strategic--that's not their job.

I think the problem's even worse in those anachronistic situations where the CIO reports to some business line manager. How can you serve the business when only part of the business determines your budget and priorities? You can't.