MIDDLESEX NEWS
COMMUNITY NEWSPAPERS
WORKING SECTION November 24,1997
Who holds the keys to the info kingdom?
Chief information officers take their place in the executive
suite
By Anita M. Harris
All Rights Reserved
Fifteen years ago, if you were in charge of the company
computer system you probably sat in a back office, somewhere. Hardly anyone knew what you
did -- and, to put it bluntly, hardly anyone cared. Today, all of that has changed.
Nationwide, there are some 221,000 chief information executives, according to a recent
national survey by IntelliQuest, a Texas research firm. Many of them go by the title of
chief information officer (CIO) -- a moniker that, a decade and a half ago, did not even
exist. With annual salaries that occasionally hit $1M or more, these information chiefs
are increasingly joining the "alphabet soup" of corporate heavyweights -- CEOs,
CFOs, COOs and EVPs -- who have offices in the executive suite. (Respectively, those
acronyms stand for chief executive officers, chief financial officers, chief operating
officers, and executive vice presidents.)
The numbers and importance of top information officers
-- a category that generally includes CIOs and VPISs (vice presidents of information
services) -- will likely grow as new information technologies transform the business
world, according to Abbie Lundberg, editor-in-chief of Framingham-based CIO Magazine. Such
transformational technologies have already led to on-line banking and investing; to
computers that fine-tune quality control in industrial processes; and to "data
mining" and "data warehousing" software, through which retailers can learn
more about their customers, says Parmelee Eastman, director of the information technology
practice at Fuld and Company, a Cambridge research firm.
Another important recent development is electronic data
interchange, a software format that lets suppliers use their own computers to check on and
replenish retailers' inventory -- thereby cuttingback on stores' needs for managers and
warehouses.
Technologies like these, which can affect every aspect
of a business, are creating a burgeoning need for information chiefs who can oversee and
develop companies' technology strategies relative to the bottom line, Lundberg says. While
titles and duties may vary by company, chief information executives are responsible for
making sure that a corporation's technology supports its strategic plan, Lundberg
explained.
CIOs must know what technology is new or coming up,
assess future needs, and make sure current systems make sense. They are accountable for
data centers, help desks, voice and data communication networks, and electronic record
keeping, as well as for balancing technological and operating needs with financial and
marketing concerns. In short, according to Lew McCreary, editorial director of CIO, chief
information officers "make sure the train runs on time from day to day, and also
decide where the train is going to go."
One current challenge of most CIOs is to integrate
rapidly changing hardware and software systems as companies expand or consolidate. Ten
years ago, most large companies used mainframe computers to run their operations, manage
their assets, keep track of inventory and the like, Lundberg says. At that time, everyone
in the company was linked centrally.
But five or six years ago, personal computers and local
area networks (systems that allow communication between computers within offices or in
adjacent buildings) were introduced. With global or national companies spread out
geographically, decisionmaking about information technology purchases became
decentralized. "The vice president of sales could say, 'this technology can help,'
and he would buy and implement the technology for his department, " she says. With
"lots of little computer systems springing up...chaos reigned." So, today, in
order to make "big ticket" decisions more uniform, "companies are saying,
for example, OK, everyone will use Microsoft Word and everyone will upgrade at the same
time." The CIO has to "get his arms around all of the little computer systems to
build an infrastructure that is company wide," Lundberg says.
The CIO role is also critical in smaller companies, she
added. With the average information technology budget at $34M, Lundberg says, "if the
person running the (IT) department is putting out fires and doesn't have a cohesive plan,
it can be expensive." The system increases in complexity as the company gets larger.
"Marketing, operations and sales all have computer needs and no company can afford to
spend 'willy-nilly.' " In small companies, the CIO function may be combined with
other responsibilities, such as marketing, she says. But "you need someone to look at
the big picture, to decide what systems to institute in partnership with all of the
departments."
CIO jobs pay well, but remuneration varies depending on
the size of an organization and its information technology staff, and on the relative
maturity of the company and the market. In a company with approximately $50 million in
sales, the title of CIO probably carries a salary ranging from $90 to $120,000, according
to Brian Hoffman, managing partner of Winter, Wyman & Company, a professional
recruiting company based in Waltham and Atlanta.
In a large corporation that is an industry leader with
sales of $5 billion or so, CIOs generally earn between $250,000 and $300,000 annually,
plus incentives and perquisites. In a large multinational corporation, salaries can be
$700,000 or more. Women's salaries tend to be lower than those of men, with executive
women in IS earning 79 percent of what men do.
Typically, top information officers come up through the
technology ranks in an industry, and most also have MBA degrees or further training in
business, Hoffman says. Of late, however, a greater number are rising from such areas as
finance, accounting, sales and marketing or general management.
Those who do so ordinarily have additional training and
expertise in IT, Hoffman says. In hiring top information officers, companies usually look
for experience in the particular industry. Hoffman says this is one of the most difficult
areas in which to recruit because senior level job descriptions are painted with such
"fine brush strokes."
Whereas lower in the information technology ranks,
employees may come from varied backgrounds, he says, at the highest levels, companies are
looking for "a very close fit." With qualified applicants in great demand,
hiring in the industry is gender neutral, Hoffman says, and age is not a barrier. While
there are relatively few women CIOs, their numbers do appear to be growing, according to
Lundberg. CIO Magazine found in a recent survey of its readers that 14 percent were women,
and, currently, there are women CIOs at Xerox Corporation and at E. I. du Pont de Nemours,
Levi-Strauss and Starbucks Coffee, among other companies.
Minorities are less well represented in the senior IT
ranks, largely because there is a need to build "a greater foundation of
experience" at the entry level, Hoffman says.
Whereas five years ago, CIOs rarely moved into CEO jobs,
"it is happening more often now," according to Lundberg. At Wal-Mart Stores,
Inc., Bobby Martin, a former CIO, now heads the company's international division; Dean
Sivley left a CIO position at Rosenbluth International, a travel company inPhiladelphia,
to become a CEO elsewhere and Albert Aeillo, formerly CIO of Fidelity Investment Co., is
now president of a Fidelity strategic business unit. "It is a logical
progression," Lundberg says. "But it is a tall order to understand both the
technology and the business. Not many can do it. "
Copyright: Anita M. Harris |