The Growing Importance of the Role of a CIO
Although the role of a CIO is somewhat new, it’s done a lot of evolving through the years. The first chief technology officers were appointed in the 1980s. The executive position became commonplace as technology boomed over the next few decades.
In that time, CIOs have grown in importance as data and technological processes play monumental roles in most organizations.
Historically, chief technology officers managed implementing internal technology and keeping it current. Oftentimes, CIOs and information technology managers were removed from overall business strategy and decision-making.
In an increasingly technological and data-driven world, the CIO has gradually taken on more responsibility in the strategic decisions of organizations. Because technology is vital to most companies’ bottom lines, no matter the product or service sold, CIOs can no longer simply be technical experts. They must take on a tactical role in the growth and maintenance of companies of all sizes.
“Moving forward, CIOs will finally have the opportunity to focus on the real meaning of their title — chief information officer,” Forbes stated. “The CIO figures out how to take the business forward in ways that extract the maximum value from the information on hand and tie in new sources of information to make better decisions, faster.”
The modern CIO must understand how to manage and use data to drive growth, and they must be able to make strategic business choices about technology allowing that to happen. Today’s chief information officers spend ample time outside of the IT department and must have a blend of technical expertise, business acumen, and communication and leadership skills.
So, what does a CIO do in contemporary business?
Chief Information Officer Responsibilities
CIOs have a plethora of responsibilities related to internal operations as well as outside stakeholders. Whether a company sells technology or not, all companies depend on the choices that technology leaders make. The modern CIO will execute some of the following high-level responsibilities.
Creating Value Through Technology
CIOs create value for the company as a member of the C-suite. They do this through technology and data. CIO Magazine stated, “With technology today’s fuel for business transformation, IT leaders are increasingly seen as key players in companies’ quests to bolster their bottom lines.”
Chief information officers must look forward and outward. Like other members of the executive team, CIOs monitor economic changes and business trends to ensure technology is used appropriately. They strive to invest in the right tools to help their organizations be competitive in the ever-changing business market, including customer management tools, marketing software, and communication applications. CIOs also must know how to leverage massive amounts of data and turn it into valuable information for the company. The chief information officer works with data professionals to find the right tools and services to monetize data.
Cybersecurity and Risk Management
At an MIT Sloan CIO Symposium, Lance Weaver, vice president of product strategy and emerging services a Equinix, stated, “A CIO has a really critical role when it comes to instantiating security inside of an organization across all the business lines, plus the responsibility for really handling risk mitigation activities that span the spectrum for the entire organization.”
This is a huge responsibility since massive amounts of data are shared and stored by companies daily. Unfortunately, data breaches are common. Today, cyberattacks happen daily, from small computer viruses to major data breaches. CIOs must continually educate themselves about risks and help hire professionals who can protect against them daily.
Team Building and Leadership
Team building and effective leadership are enormous parts of the responsibilities of a chief information officer. Because the role of a CIO has moved beyond the technology department, he or she must build a capable team to handle day-to-day management of technology and information. Extensive tenure on IT teams can help CIOs know what’s needed at the ground level.
Of course, they must also comprehend high-level strategy to lead effectively. A study by Deloitte Insights pointed out that it’s important that CIOs understand their mission and the corporate strategy. The report stated, “Does the business need the CIO to serve as an operational disciplinarian, a leader of business transformation, or a driver of technology-enabled business strategy? Aligning mission and brand to the needs of the business can help crystallize the CIO’s vision and bring clarity and consistency that will filter through to the IT team.”
With a clear mission and the right experience, a chief information officer can hire an effective team and guide them appropriately within the organization, helping to build value and mitigate losses.
The Monetary Value of a CIO
CIOs are well paid. According to Glassdoor, the average base pay of a CIO is $170,756 yearly with a range of $1,037 to $144,241 in additional cash compensation, such as bonuses. TechRepublic reported in 2016 the top 35 paid CIOs took an average compensation package of $3.6 million.
CIOs enjoy lucrative careers because they add considerable value to a company and can help organizations avoid costly losses. One of the vital duties of a CIO is exercising fiscal responsibility. The chief information officer must choose technology that increases the productivity of an organization without falling prey to expensive new trends. Their role in linking technology to business strategy is paramount to making cost effective choices that will pay for themselves in the long run, create a more productive workforce, and not subject the company to unexpected losses.
The ability to choose the correct technology and keep it operational is a pivotal one when it comes to profit. A report by IHS, Inc. found that the combined cost of information and technology downtime to North American organizations is $700 billion per year. Most of that cost (78%) is in lost productivity, with 17% due to revenue lost and 5% in the cost to fix. Having a leader who understands these costs and their impact when making technology decisions is imperative.
As discussed above, cyberattacks are another way companies can lose significant amounts of money. The average cost of a data breach to a company is $7.19 million. A CIO who puts a team in place to manage the growing risk of cybersecurity threats can save a company millions by protecting systems and data.
There’s no doubt as technology continues to advance, so will the need for people in the role of CIO. This executive position will likely only become more influential in running organizations in all sectors and propelling growth. Forbes stated, “Digital transformation is changing every corner of business, from how companies source parts to how they deal with customers. Each change, both large and small, creates a demand for technology expertise and leadership.”
Effective CIOs have the advanced experience and education to tackle the changing business and technology landscape and to lead productive and profitable teams. A unique blend of IT background and business knowledge helps chief information officers succeed. To pursue this vitally important role, consider a master’s in computer information systems online from Rivier University.
The curriculum will help you develop a deep understanding of both the social and cultural significance of mathematics and computers in business and our society. You’ll master the theory and application of computing, as well as quantitative research, and become uniquely prepared to address future business trends in the role of a CIO.