Top information officers also report directly to CEOs, align IT with business more effectively, Hackett research shows
Atlanta — February 17, 2006 — Only slightly more than half of all typical chief information officers (CIOs) sit on their company's management committees, while world-class CIOs universally earn this senior leadership position, enabling them to much more effectively align IT with business goals and objectives, according to new research from business advisory firm The Hackett Group.
Hackett's research, released in its latest Book of Numbers, also identified several other key factors enabling CIOs to improve strategic alignment. For example, world-class CIOs are more than three times more likely to report directly to their company's CEO or chairman than typical CIOs.
In addition, world-class IT organizations also hire managers and professional staff with far greater business knowledge, and a much higher percentage have advanced degrees than at typical companies. Finally, world-class CIOs have completely eliminated parts of their IT organizations that report locally, and they drive significantly higher levels of centralized reporting.
Aligning with the Business
"One of the consistent themes we see in our research is that the SG&A functions [that] perform the best are more closely aligned with the business," said Hackett IT Practice Leader Doug Barta. "This is particularly true in IT. World-class IT organizations go beyond supporting the business at a basic level, helping identify and leverage competitive opportunities."
Barta said that one fundamental way to ensure that IT is optimally aligned with goals and objectives of the business is to have its most senior executive involved in decision-making at the highest levels of the company. "There are few new initiatives in which technology does not play a critical enabling role," Barta noted. "But in many typical companies, since the CIO doesn't have a seat at the senior management table, these initiatives are planned without adequate input from the IT organization."
The result, Barta said, is that the technology component can be flawed, costlier than envisioned or delivered late — any one of which can sink an otherwise worthwhile new project.
According to Hackett Senior Business Advisor Scott Holland: "CIOs that report to the CEO are much more likely to be a business executive with deep operational, sales or marketing experience. But at companies where the CIO reports to the CFO, they are more likely to be focused on technical expertise, maximum efficiency and cost control. This doesn't put them in the best position to drive strategic value."
More information is available on this research at http://www.signup4.net/Public/ap.aspx?EID=PRCA11E.
Additional Articles of Interest
— Successful supply chain executives differentiate themselves — and their companies — from the competition. Here are the skill sets you need to focus on. Read "Critical Skills for Effective Supply Chain Leaders" in the December 2005/January 2006 issue of Supply & Demand Chain Executive.
— Leading crafts company Creativity Inc. has found that, with a bit of trust and a lot of teamwork, a little consulting can go a long way in addressing supply chain pain points. Read more in "Crafting Success in Supply Chain Transformation," cover story in the December 2005/January 2006 issue of Supply & Demand Chain Executive.
Atlanta — February 17, 2006 — Only slightly more than half of all typical chief information officers (CIOs) sit on their company's management committees, while world-class CIOs universally earn this senior leadership position, enabling them to much more effectively align IT with business goals and objectives, according to new research from business advisory firm The Hackett Group.
Hackett's research, released in its latest Book of Numbers, also identified several other key factors enabling CIOs to improve strategic alignment. For example, world-class CIOs are more than three times more likely to report directly to their company's CEO or chairman than typical CIOs.
In addition, world-class IT organizations also hire managers and professional staff with far greater business knowledge, and a much higher percentage have advanced degrees than at typical companies. Finally, world-class CIOs have completely eliminated parts of their IT organizations that report locally, and they drive significantly higher levels of centralized reporting.
Aligning with the Business
"One of the consistent themes we see in our research is that the SG&A functions [that] perform the best are more closely aligned with the business," said Hackett IT Practice Leader Doug Barta. "This is particularly true in IT. World-class IT organizations go beyond supporting the business at a basic level, helping identify and leverage competitive opportunities."
Barta said that one fundamental way to ensure that IT is optimally aligned with goals and objectives of the business is to have its most senior executive involved in decision-making at the highest levels of the company. "There are few new initiatives in which technology does not play a critical enabling role," Barta noted. "But in many typical companies, since the CIO doesn't have a seat at the senior management table, these initiatives are planned without adequate input from the IT organization."
The result, Barta said, is that the technology component can be flawed, costlier than envisioned or delivered late — any one of which can sink an otherwise worthwhile new project.
According to Hackett Senior Business Advisor Scott Holland: "CIOs that report to the CEO are much more likely to be a business executive with deep operational, sales or marketing experience. But at companies where the CIO reports to the CFO, they are more likely to be focused on technical expertise, maximum efficiency and cost control. This doesn't put them in the best position to drive strategic value."
More information is available on this research at http://www.signup4.net/Public/ap.aspx?EID=PRCA11E.
Additional Articles of Interest
— Successful supply chain executives differentiate themselves — and their companies — from the competition. Here are the skill sets you need to focus on. Read "Critical Skills for Effective Supply Chain Leaders" in the December 2005/January 2006 issue of Supply & Demand Chain Executive.
— Leading crafts company Creativity Inc. has found that, with a bit of trust and a lot of teamwork, a little consulting can go a long way in addressing supply chain pain points. Read more in "Crafting Success in Supply Chain Transformation," cover story in the December 2005/January 2006 issue of Supply & Demand Chain Executive.
- More research from The Hackett Group.
