Are CIOs losing their mojo?

A recent SIM International study finds that fewer CIOs are reporting directly to the CEO. Instead, they're answering to less strategic executives, such as the chief operating officer or chief financial officer.

Baby boomer CIOs are retiring and being replaced by less business-savvy (and less expensive) successors. Regulatory concerns are eating up the bulk of IT's time and budget, while increased outsourcing and automation are changing the way business views IT overall. And not always in a good way.

Taken together, these trends don't seem to bode well for today's CIOs and their influence on the business side of the house. But what's the reality? When CEOs and company presidents and boards of directors think of their CIO, do they think innovation? Do they think competitive advantage? Or do they think of someone who just keeps the IT lights on?

While findings like SIM's are troubling, many experts say today's CIOs are actually gaining influence.

"I'm not concerned – well, not overly concerned," says Jerry Lofton, vice president of academic affairs at SIM International and a co-author of the study. "If we saw the trend continuing, perhaps that would be an indicator. But other findings such as the fact that IT resources, as well as IT funding, are on the rise are very positive in comparison to looking at where the CIO reports."

In fact, IT spending overall is on a growth spurt, with North American IT expenditures increasing 5% in 2007, compared with a 4.1% increase in 2006, and a 2.5% increase in 2005, according to Computer Economics' latest IT spending and staffing survey. 

And other data seems to run counter to the SIM study. "We see exactly the opposite," says Harvey Koeppel, executive director of the Center for CIO Leadership in New York. "CIOs really are finding their way to a seat and voice at the table and being fairly heavily involved in setting strategic direction and becoming business partners with the rest of the C-level suite."

In fact, in research conducted by IBM and the Center last June, 80% of the 175 CIOs polled felt they were valuable members of the executive leadership team, with 69% indicating significant involvement in strategic decision making.

Click to see: Survey of CIOs losing influence

The tale of two CIOs

So what's behind the clashing numbers? The role of the CIO is changing, and where it ends up depends on a variety of factors, including the type of business an organization is in, the stability of its technology portfolio, and especially, the CIO's own traits and expertise.

"The role of the CIO is at a crossroad," Koeppel says. "CIOs are in a place where they can start to make choices between developing the business subject matter expertise, business understanding and leadership skills that really can position themselves as strategic partners with a voice and the seat at the table. Or the alternative, which is to increasingly become much more technical and operational, where the focus is much more about keeping the lights on and reducing expenses. Both are in play."

Koeppel and others say recent trends are tugging at CIOs to take on less business-changing, more operational roles, and it's a tug they need to resist. While the operational side of IT is important, it's not the end goal.