CEOs Taking the Tech Reins from CFOs

As IT has taken on a more strategic role in companies, the CIO more often reports to the chief executive.
Alan RappeportJuly 21, 2008

More chief information officers are reporting to their firms’ chief executives and less to their CFOs, according to a new report by Forrester Research.

In the just-released study of 2007, which polled 503 CIOs, 18 percent said they reported to the CFO. That was down from 25 percent in Forrester’s last such survey, conducted three years ago. In the newer survey 34 percent of CEOs were the direct bosses of CIOs.

“It’s an indication of the recognition of the role of technology, which is becoming more operational and strategic and less of a pure expense,” says Bobby Cameron, an author of the Forrester report.

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CFOs were still in charge of information officers more often than CEOs at in retail, wholesale, media and entertainment businesses. The same was true about companies with less than 1,000 employees.

CIOs who reported to the finance chief said they had the smallest budgets as a percentage of revenue, compared to those who reported to other executives, and that their companies were least focused on improving their businesses with new technology. The largest amount of their time, these chief information officers said, was spent on reducing costs. CIOs who reported to the CEO had the highest IT budgets as a percentage of revenue.

“If IT is an expense item, not strategic or core to the operation, then of course it will be managed down to a small amount,” Cameron says. “And who better to do that than the CFO.” Yet in spite of the budget constraints, he adds, many CIOs have no problem reporting to a CFO.

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