The CIO role grows more strategic

Our 2017 State of the CIO data shows positive movement in the three KPIs I track: reporting structure, tenure and evolution of the CIO role. Here’s a snapshot of trends in these areas.

Reporting structure

Most C-level executives want to report to the CEO. This year, 46 percent of the nearly 650 CIOs we surveyed said they report to the CEO, marking the third straight year that that figure has approached 50 percent. It hasn’t dipped below 40 percent since 2012. As technology continues to permeate every aspect of an organization, and as CIOs are called upon to drive innovation and customer experience, it makes sense that the CEO wants a direct reporting line.

Tenure in the role

From 2012 to 2016, we saw average CIO tenure increase from five and a half years to six and a half years. This year, the average tenure of our survey respondents fell back to five and a half years. I’ve identified a few factors that could be causing that shift. First, merger-and-acquisition activity is at a record high. Second, our research shows that CIOs are increasingly moving into leadership roles in operations.

Finally, most C-level executives are baby boomers in their 50s or 60s, and some observers have calculated that 10,000 members of that generation are retiring every day. These forces, taken together, are bound to lead to a decrease in tenure.

Evolution of the CIO role

The final KPI I track is movement within the three primary types of CIOs, which we label functional, transformational and strategic. We determine which respondents go into which group based on how they say they spend their time. For more than five years, the largest share of CIOs responding to our survey (consistently around 50 percent) have been categorized as transformational. Where we see movement is in the functional and strategic categories, and this is influenced by what is happening with the economy and security.

When the economy is rocky or new security threats arise, respondents report spending more time managing security and cutting costs — which we categorize as functional activities. When the economy is stable or growing and security is under control, CIOs can spend more time driving business innovation, creating competitive advantage and developing new strategies and technologies. This year, we saw the share of functional CIOs shrink to 20 percent (down from 27 percent in 2016) and the share of strategic CIOs jump to 31 percent (up from 27 percent in 2016), the highest level since 2014.

These KPIs indicate that it’s a great time to be a CIO. And considering how important technology is to the business, the future looks bright.