Most CIOs now report to the CEO. But, it’s not always that way. Who should the CIO report to? Let’s take a look at the CIO reporting relationship involving the CEO, CFO, COO, and CAO.
Of course, there are scenarios in which other reporting relationships make more sense. So, we will also include the pros and cons of each option.
CIO And CEO
First on the CIO reporting relationship is the CEO. For the CIO talent market, this is the most desirable.
There are a lot of benefits when CIOs report to the CEO. It usually has a seat on the executive committee. Also, it brings regular opportunities to present to the board. And, there is involvement in critical business decisions and strategic planning.
If the CEO receives many reports, the CIO might not have the support it needs.
CIO And COO
This indicates that the organization sees IT as key to operational performance. In many cases, this reporting structure has less to do with the industry. And, more to do with the CEO’s focus.
When the COO is the leader, the CIO may still have the opportunity to present to the board.
Well, the COO has deep involvement and knowledge of business operations. Also, the strategic focus for growth on the company. Thus, the next best option for the CIO.
Forrester has noted that working for the COO can lead to an overweighting of operational goals or metrics. While with less focus on growth-oriented metrics such as a customer experience index.
CIO And CFO
CIO-to-CFO reporting is relatively common across industries, but it is especially prevalent in manufacturing and services businesses.
“If the CFO shows aptitude and understands technology,” says Thistle, “there can be a strong partnership between these two.”
Firms that align CIOs under the CFO may naturally measure IT performance using financial metrics and with financial goals in mind, which can widen business silos and lessen the focus on transformational initiatives like integrating data and creating end-to-end customer experiences, according to Forrester.
This is a deal-breaker for many IT leaders. “If the CFO is overly focused on cost containment, and there isn’t a feeling that there will be the right levels of IT investment, CIO candidates will question the reporting structure,” Thistle says. “Many will decline the opportunity.”
CIO And CAO
Reporting to the CAO is a less common situation given how few organizations have a CAO. However, it is somewhat prevalent in energy, oil, and gas, according to Thistle. “[It] is another structure that we find from time to time, but it is not desirable,” she adds.
Relatively few. In cases where the CAO has most business functions like finance and HR reporting to him or her, it may make sense to include IT in the bunch.
The CAO is a top executive and usually reports to the CEO. However, CAOs are focused on administration and daily operations. Unfortunately, CAOs are less involved in developing strategic plans. Which is what the CIO is interested in.
As a result, most CIOs do not view this reporting as beneficial to them.