Report: CIOs Must Sit at Management's Table

The best IT organizations are run by administrators who have input on the running of the business, says a new report. And whether or not the CIO reports directly to the CEO matters much less so.
The best IT organizations are run by administrators who have immediate access to top executives and have input on the running of the business.

And whether or not the CIO reports directly to the CEO matters much less so.

''It's not so much about reporting structure,'' says Beth Hayes, an IT practice leader with the Atlanta-based Hackett Group. ''Is that senior IT executive participating in top management? That's what's important.''

This is all according to a new study by The Hackett Group, a business advisory firm that benchmarked 200 companies over the last two years. The report also finds that 'world-class' IT organizations spend 18 percent less than median companies and run with 36 percent less staff.

The Hackett Group categorizes an IT organization as 'world class' based on several criteria, including productivity, cycle times, cost per end user, organization and the effectiveness of partnering. An organization must score in the top 25 percent to be deemed world class.

The Hackett report shows that CIOs at world-class companies are more likely to report to the CEO or other senior executive and less likely to report to the CFO. But analysts say more importantly, the study shows that heads of the best IT organizations have a ''seat at the table'' with senior management. The report points out that 100 percent of world-class companies have made their senior IT executive a member of the senior management committee, compared to 69 percent of median companies.

Hackett's Hayes says it's clear that there is no evidence that it's more important for the CIO to report directly to the CEO, than it is for the CIO to be sitting at the management table, engaged in discussion and decision making.

Five years ago, Hayes adds, most CIOs reported to the CFO or another officer -- other than the CEO. But today that situation has flipped, and Hackett's study shows that 87 percent of CIOs report to the top executive.

''We've seen this fluctuation in the reporting structure, and we're finding that it is much less relevant who the CIO reports to,'' says Hayes. ''It's more about whether the CIO has a voice and sits at the table with other senior management who are governing that organization.

''If that senior IT executive is helping to directly run and govern the business, then that is a strong driver for world-class performance,'' she adds.

The Hackett Group conducts a CIO dinner series and Hayes says talk inevitably turns to reporting structure. Most CIOs are eager to report to the company's top officer.

''If I was CIO, clearly I'd want to be reporting to the CEO,'' admits Hayes. ''That may not be a battle to be won. The bigger battle to be pursued is to be a member of the management committee.''

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