The state of the Australian CIO 2010

The annual State of the CIO study provides Australian chief information officers with local research on leadership strategies, salary ranges, tenure and business priorities in mid to large organisations.

Some 200 CIOs in organisations with an average of 145 IT staff, supporting 7000 users participated in this year’s study and provided a benchmark for best-practice in IT business management. The study is part of a global research project which allows CIOs to compare their priorities and objectives with those of equivalent organisations in the United States.

CIO also spoke with two IT leaders about the results and how a quantitative study like the State of the CIO can best be interpreted to meet rapidly changing business demands.

Download the 28 page State of the CIO research report

Reporting lines and tenure

To determine where the CIO sits within the enterprise, the study asked to whom they directly report. The results show more CIOs are reporting through finance, with almost as many CFOs as CEOs as the direct report. The trend was most prevalent in large enterprise where 44 per cent of CIOs report to finance.

For some, it’s a disturbing trend. Former Housing NSW CIO, Vladas Leonas, is adamant the CIO should report to the CEO and says not doing so takes away a significant component of the CIO role “and a lot of influence”.

“If the CIO is not at the executive table, the ability to influence early in the piece becomes very difficult, if it is achievable at all,” says Leonas.

At construction giant Brookfield Multiplex, CIO Chris Clark reports to the CFO but spends as much time talking strategy with the CEO.

“Don’t let the reporting line be a delineator for your effectiveness,” Clark says. “I find myself meeting with the CEO as often as the CFO so it’s really the mindset of the CIO. I can have a great discussion with the CEO around strategy while reporting to the CFO.”

The average CIO spends less than five years at one organisation and Leonas, who was at Housing NSW for four years, says the trend should not be viewed in isolation.

“It is common of all senior executives, not just CIOs, to move around,” he says. “There are positives and negatives in people moving around — on the positives you get a fresh perspective, but on the negative, people can stop thinking long-term.”

Clark is coming up to his third year at Brookfield Multiplex and says some companies see value in CIOs with a lot of experience at one organisation, but there is more than just the tenure; it’s also about the type of CIO, and that rates differently.

Top priorities

Management priorities for CIOs in 2010 centre around alignment, but there is a marked focus on governance, portfolio management and data protection. Cost control has also increased in prominence in the aftermath of the global financial crisis.

With alignment remaining high on the priority list, Leonas says it may be indicative of CIOs not reporting to CEOs.

“It’s difficult to achieve alignment when you are not part of the discussion,” he says.

“Governance is a big issue because people are more and more looking at exercising strong governance and portfolio management which reflects the growing complexity of projects.”

Clark says fresh leadership can go a long way to achieving alignment.

“There is also leadership because of the organisation’s business model,” he says. “Often you go into IT departments and they have been looking alignment for 10 years so the statement needs to change from alignment to leadership.”

Clark says governance and portfolio management are “absolutely” increasing in priority as organisations look to ensure the engagement required takes in business projects, not just IT projects.

The increased focus on customer data and privacy, Leonas says, is largely driven by strengthening legislation.

“Data production is on CIOs’ minds more than ever due to the increased probability of moving services to the cloud,” he says. “As more data leaves the data centre, how do you protect it?” More than 18 months on from the GFC, Leonas says projects are moving ahead again, particularly in the private sector.

“Cost control was always quite strong. It goes up and down, but it’s always there. Outside government, people are starting to spend money on IT again,” he says.

Housing NSW sits inside the NSW government’s Department of Human Services.

Clark agrees and says more money will be spent on IT, but people have become far wiser about that spending in a post-GFC world.

“Organisations are ensuring better value for money and effective spending. I see a lot of ineffective spending,” he says. “A good example is more companies doing multi-sourcing and cloud computing. Why would you own massive amounts of equipment when you can use private clouds?”

Next: IT’s share of the pie and staff to user ratios

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