by Sunil Shah

Does it Pay to be Seen as a Competitive Differentiator by Your Business?

Jul 20, 20143 mins
BudgetingBusinessEnterprise Applications

It depends on what you mean by pay.

Deep in the heart of the shadowy world of enterprise IT, past the dense jargon, the black art of IT decision-making, and beyond the hard, unfeeling 1’s and 0’s, lies a rather human secret.

IT departments are run by humans. They are led by CIOs who, just like other men, need the reassurance of praise, the sense of belonging that comes from being treated as an equal, and the motivation that’s born out of a sense of respect they get from their peers.

That’s why at the top of the wishlist of many CIOs is the need to be seen as competitive differentiator by their businesses. The journey to competitive differentiator status begins as being seen as a cost center. Cost center CIOs feel misunderstood, unfulfilled, and their value to the enterprise goes unappreciated.

The next step is being seen as a valued service provider. These CIOs have credible reputations for being efficient and offering effective delivery. From there, CIOs graduate to being trusted partners, defined as those who are trusted, influential collaborators on all things IT.

Then, finally, there are the competitive differentiators; those truly part of “the business”, those engaged in developing, not just enabling, business strategy.

Getting to be a competitive differentiator isn’t easy isn’t easy–nor, as CIO research reveals, does it pay, not, at least, in the conventional sense.

CIO’s research has revealed that IT leaders considered as competitive differentiator by their businesses, are less likely to see pay increases. According to CIO’s research, 75 percent of CIOs considered competitive differentiator by their businesses received a raise–an average of 11 percent.

Compare that to 85 percent of CIOs who are considered cost centers and who got an increase in their compensation this year–of about 13 percent.

Life, it isn’t fair.

That logic, however, doesn’t apply to IT budgets. Cost center CIOs say they saw their IT budgets increase by about 12 percent–compared to the 19 percent increase in the IT budgets of CIOs seen as competitive differentiators by their business peers.

Competitive differentiators also have greater controls over their IT budgets. Asked what percent of the IT budget, in their control, is dedicated to new IT projects, 43 percent of competitive differentiator CIOs said they controlled over 25 percent of the IT budget.

In comparison, only 17 percent of CIOs who are seen as costs centers said they controlled over 25 percent of the IT budget.

Surprisingly, the amount their staffs get paid doesn’t change between the groups. Both groups said their staffs got 11 percent raises, perhaps demonstrating that pay hikes for their staff is not something that CIOs really get to weigh in on.

Job satisfaction levels also differ greatly between the two groups. The majority of competitive differentiators–40 percent–are very satisfied with their current jobs. If you combine CIOs who say they are very satisfied with those who satisfied, that number jumps to 76 percent.

In comparison, 57 percent of Indian CIOs who are considered cost centers by their business peers say they are not satisfied with their jobs or are satisfied, but are looking to move to another job.

It might not pay to be seen as competitive differentiator by your business, but it sure improves your sense of well-being.