2015 State of the CIO

Our 14th annual State of the CIO research, based on a survey of 558 IT chiefs, shows that compensation is up, but the job is super-challenging and business expectations are high. CIOs continue to struggle with balancing the need for innovation with the need to keep IT operations humming along efficiently and securely. Some CIOs are perceived as business leaders, or at least partners. But, candidly, some CIOs are falling short, as some business colleagues still see IT as an obstacle to business success.

This year’s survey finds 44 percent of IT leaders reporting to the CEO, consistent with last year and up from 39 percent reported in 2013. The survey also finds that 64 percent of CIOs say that their CEO consults with them frequently about strategy. And 64 percent of CIOs are on their company’s executive committee. So most CIOs have the proverbial “seat at the table” for business strategy discussions. Asked about CEO priorities, CIOs reported an uptick in security, presumably driven by the slew of high-profile data breaches.

Average compensation (base salary plus bonuses and stock options) increased to $234,830, up from five years of relatively flat salaries hovering around $219,000. Compensation is much higher in the financial services industry. In another closely watched metric, CIO tenure on the job averages 5.8 years. Average tenure is highest at small businesses (7 years) and in the financial services industry (6.85 years).

It’s a good thing that CIO compensation is up. CIOs say their job is getting tougher and more important, as they juggle innovation and operational excellence – plus a new journey to what some call “the digital enterprise.” But 20 percent of CIOs feel like they’re going in the wrong direction: “sidelined” in the business. The good news: That “sidelined” segment is down 8 percentage points from last year. The bad news: IDC found that even more business peers (37 percent) see the CIO as sidelined.

The CIOs who are viewed as “business leaders” are definitely in a minority (13 percent). In the survey, that category was defined as a “key driver of the enterprise’s competitive future.” At the other end of the spectrum are the IT shops viewed as cost centers (18 percent), defined as IT functions where the “enterprise value [of IT is] unappreciated, misunderstood or unfulfilled.” (Maybe they are the same CIOs who feel sidelined?) In between, like in a bell curve, are the IT organizations viewed as competent “business partners” and “service providers.”

It’s not easy being a CIO. Business leaders increasingly expect the CIO to lead corporate-wide innovation projects and to help develop new products and services. Meanwhile, the CIO who fails to keep the hackers out or the email flowing is in big trouble. Three quarters of CIOs say it’s tough finding the right balance – up 6 percentage points from the previous year.

Another trend making the CIO role more difficult is the war for talent. Our survey finds that 56 percent of CIOs expect to experience IT skills shortages in the next 12 months. Not surprisingly, the search for the elusive “data scientist” (some say it’s akin to finding a unicorn) tops the list. Security professionals are in high demand and command high salaries.

Looking at the future of their personal careers, many CIOs plan to remain in that role, or perhaps run a shared services operation. Only 9 percent foresee themselves as a “digital strategist,” along the lines of a chief digital officer. CIO interest in becoming a “digital strategist” was highest at companies over $5 billion in revenue (16 percent) and in the telecom industry (17 percent) – and negligible in manufacturing (1 percent). One school of thought is that CIOs in the future will be focused primarily on managing contractors, cloud vendors and other IT service providers. In our survey, CIOs were evenly split on the likelihood of this “cloud wrangler” scenario: 49 percent agree, 48 percent disagree.

We compared results of our survey of CIOs with an IDC survey of non-IT business executives, and in some case there are startling differences in perception. A third of CIOs acknowledge that IT may be viewed as an obstacle by other departments; more than half (54 percent) of those other departments see IT as an obstacle to their mission. And as the C-suite gets crowded with C-level titles, “turf wars” are arising with peers in the C-suite. Non-IT business execs are seeing more of this phenomenon than the CIOs themselves are aware of.