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co-authored with John Sviokla

There is some disturbing new data for the role of the CIO.  Thomas Wailgum of CIO.com says, “Given the… warning signs, it’s easy to speculate that the CIO’s role and the department’s sovereign power might be slip-sliding away.”  Half of our 2010 PwC Digital IQ Survey respondents said that more than 30% of the dollars spent on IT is done outside of IT.  Power in any organization usually follows those who can create new revenue and value, but our survey shows that 75% of the CIO’s innovation role is internally facing.

We think these different indicators point to a weakening of the CIO role at the very time when technology is reinventing marketing, and competition more than ever before. How can they be losing power and influence at the very time that they should be gaining it?  Smart phone apps are changing our expectations of mobile capability; h all major consumer brands have embraced social media as a new means to get their message out; healthcare firms are using onine video to tell its message to doctors and technicians alike; massive data mining is creating new insight, and data visualizations making these insights more usable — and the pace of change is increasing!

Could there be a better time to be a CIO?

We believe that one of the key problems is that the CIO is the only member of the executive team who is both a staff executive, serving providing support for all the other functions of the company, in a manner similar to the director of human resources, and also a line executive — akin to a vice president of manufacturing, because at many companies — banks, insurers, and airlines, the CIO’s job is to run the factory too.  We feel it is this dual role, of staff executive and line executive — a Jekyll and Hyde of the organization — that confuses the goals and roles of the CIO.  Simultaneously, most firms are seeing a whole new wave of technology affecting marketing, service, sales, and brand.  Everything, from iPhone applications to the incredible power of social media points to the fact that the CIO should have even more influence than ever — because technology is more important than ever to the creation of revenues and profits.

But, if the CIO is not willing to clearly explicate his or her role as the person who not only helps to drive down costs and automate all parts of the business but also as a line executive who runs the factory and helps to find new customers and serve them even more profitably — then their role as CIO will be split up — and the “administrative” tasks will be given to an executive who is not a C-level player, who is likely to report to the CFO or to the Chief Administrative officer — as internal staff functions ought to.  The line responsibilities will migrate to other line executives who have profit and loss responsibility — running divisions, product lines, or geographies.

What’s a CIO to do?  First, the CIO must articulate their contribution to both the staff and line roles.  Those CIOs who are involved in the creation of innovations and demand creation, are the ones who will continue to earn the C, part of their CIO title.  In our sample, only 25% of CIOs were involved in the creation of market-facing innovations.  The CIO who wants impact must help firms find new demand; serve customers better and create innovations.  It is these executives who will continue to have a seat at the executive table.

This seat at the table is important because we find that those CIOs who are involved in the strategic planning of the organization are more likely to drive business success.  Put another way, its hard to be a successful CIO if you are only an order taker and not a demand shaper.  So, now is the time to see how much you are contributing to growing the top line, and expanding the bottom line — unless of course you’d like to lose your C.

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