The Incredible Shrinking CIO
Their budgets have been cut, their work's been outsourced, their staff's been downsized, and they've been pushed off the executive team. Their status within the enterprise has suffered. That's dumb. And for CIOs, not fighting back would be dumber.
CIO — When Jim Brownell was CIO of Williams-Sonoma, he sat on the executive committee, reported directly to the CEO, and oversaw a strategic, multimillion-dollar replacement of the retailer’s merchandising and warehousing system. But when a new CEO took over, he decided he wanted his own CIO. So last October, Brownell, a 25-year IT veteran, began looking for a comparable position elsewhere. He couldn’t find one.
"When I looked at opportunities in CIO-land, they were unappealing. The cycle of CIOs reporting to CFOs is coming back, and it’s not pleasing," Brownell says. "I heard the same story in every interview: ’We’re looking for a new CIO because IT projects never deliver on time and they cost more than we expect and they don’t deliver what we want. All our systems need to be replaced. Oh, and we’re reducing the amount of money we’re allocating for IT.’"
In May, Brownell accepted a job as senior vice president and general manager of Escalate, a California software vendor, rather than settle for a lesser CIO job. "Quite honestly," says Brownell, "I don’t know why anyone would want the CIO job today."
The Dumbing Down of the CIO Role
Brownell has a point. Consider the following:
- The percentage of CIOs reporting to CFOs doubled this year from last year, according to CIO’s "The State of the CIO 2003" survey (see the complete survey results at www.cio.com/printlinks). Reporting to the CFO rather than the CEO or COO is almost always a sign of diminished clout.
- Executive recruiters report that companies are looking for low-cost techies and, surprisingly, junior employees to fill the role of CIO. In 2001, compensation for CIOs at large companies decreased for the first time since 1985 and has slid 16 percent—from $434,000 in 2001 to $363,000 in 2003, according to IT management consultancy Janco Associates.
- IT spending continues to be flat or in decline. Technology budgets were cut 14 percent for the second quarter of 2003, the fourth consecutive flat or declining quarter, according to the Wendover-Global Insight IT Spending Index, with no uptick expected before year’s end. Similarly, only 38 percent of respondents to CIO’s own Tech Poll said they do not expect an uptick before the end of 2003.
- The increased interest in outsourcing and shrink-wrapped technology strategies has emboldened some CEOs and corporate boards to rein in what they see as an overinflated executive position.
"CIO is no longer the same level of position," says Phil Schneidermeyer, CIO
