Hackett's research also identified several other key factors enabling CIOs to
improve strategic alignment. World-class CIOs are more than three times more
likely to report directly to their company's CEO or Chairman than typical CIOs.
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 drive
significantly higher levels of centralized reporting.
"One of the consistent themes we see in our research is that the SG&A
functions which 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.
"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," said Mr. Barta.
"There are few new initiatives in which technology does not play a critical
enabling role. 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 is that the technology component is
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."