CIOs Focusing Less on Infrastructure, More on Innovation

Seven Major CEO Concerns CIOs Should Address 

Understand the concerns of CEOs and the implications they may have on IT.

In last week’s post in which I  wondered whether the dedicated CIO was an anachronism, I shared a column written by executive recruiter Tim Cook, who said new roles combining key business functions were on the horizon for “CIOs who are capable of doing more.” He tapped shared services, the supply chain and broader operations as “natural areas to be added to the CIO’s remit.” He also mentioned several European companies where CIOs are responsible not only for technology but also for areas like logistics and online strategy.

I thought Cook summed it up well when he wrote the IT function is becoming “less about running infrastructure and data systems well, and more about IT procurement, vendor management, business-process change and information security.”

This trend isn’t confined to Europe and it’s driven in part by increased adoption of cloud computing. A Network World story quotes several sources who say the cloud can free CIOs to focus less on IT infrastructure and more on business issues involving technology.

Mark Polansky, managing director of the Information Technology Officers Practice at recruiting giant Korn/Ferry, told Network World that many CIOs are delegating infrastructure responsibilities either internally to a CTO, externally to an outsourcer or to the cloud. Jerry Luftman, executive director of graduate information systems programs at Stevens Institute of Technology, said applications and services that run on IT infrastructure, rather than the infrastructure itself, are what differentiate companies from their competitors. He said there’s a “clear trend” to reduce the amount of infrastructure that is handled internally.

Luftman administered a recent Society for Information Management (SIM) survey in which CIOs said they spend 77 percent of their time on business issues such as managing relationships with internal and external business partners and 23 percent of their time on technical issues such as architecture, operations and software development. Luftman said CTOs are more the go-to guy (or girl) for technical issues, while CIOs are more focused on business issues.

Polansky noted a shift from cost reduction to growing the top line. Last year, Gartner predicted that by 2015 CIO compensation at Global 2000 companies would be tied to revenue generated by IT.

The Network World article also includes some examples of technology executives who have titles that reflect this shift. At Red Robin Gourmet Burgers, for example, CIO Chris Laping is also the VP of business transformation. At his company, technology is “a tool in the toolbox around change.” This phrase struck a chord with me, as I realized I’d heard it before, from Norton Healthcare CIO Joseph De Venuto, whom I interviewed last year. In describing some of Norton’s IT initiatives, De Venuto told me CIOs need to start looking at technology as “a tool in the tool belt.”

Still, most CIOs can’t just yank out their existing IT infrastructures and move to the cloud. Optimizing legacy infrastructure while freeing up funding for more strategic initiatives is a key challenge for CIOs. When Constellation Research published a report listing four personas CIOs would need to master — chief infrastructure officer, chief intelligence officer, chief integration officer and chief innovation officer — Constellation CEO Ray Wang noted infrastructure still commands the lion’s share of the budget, 65 percent to 70 percent. Wang said integration commands 5 percent to 10 percent of the budget, intelligence gets 10 percent to 15 percent, and innovation officer gets just 5 percent to 10 percent.

CIOs looking to build business cases for moving infrastructure to the cloud can find inspiration in an excerpt from “The Empire Strikes Back: Unleashing IT as an Innovation Center,” one of a number of cloud-related resources in the IT Downloads section of IT Business Edge.