Generally, the CIO and IT Department reports into the CFO or financial organization of the company. However, more and more CIO’s are starting to report to the operations side (COO, President) or even the CEO.
I’ve reported to both CFO’s and to CEO’s in different companies.
My preference is always to report into the highest executive as possible who is close to what’s going on in the business operations of the company.
Sometimes, a CEO is close to the action, sometimes not. But generally, I want to be under the President or CEO if possible. They are almost always closer to the operations of the company than the CFO will be.
IT reports into the CFO often because many of the company’s support services organizations (Accounting, Purchasing, Payroll, Accounts Payable, etc.) report to the CFO. Also, the CEO often thinks the CFO is more technically oriented so it’s more logical for him to think that IT should report to the CFO.
The problem is that most of your client and users IT supports are probably from the operations groups who are producing the products or providing the services your company sells. For that reason, you need to be close to what’s going on in the operations groups to support them effectively.
My preference as I said is to report into the President or CEO because they are generally closer to the real operations of the company and many of the operations initiatives depend on IT to succeed. It helps me anticipate things that are coming up if I can be closer to the actual operations arm of the company, , , I’ll usually hear about it sooner when working directly for executives in charge of the business operations.
I’ve reported to some great CFO’s and you can certainly be effective reporting to a CFO. I’ve also reported to a poor CFO and that makes it much harder to be effective for your company because you can get blocked from the real needs and issues of the company.
It helps when reporting to the CEO or President in other ways. It puts you on the same level as many of the senior department managers (your customer) who also report to the CEO or President. The image of being at the same level can be important for some, possibly even the IT staff and the operational staff of the company.
It also helps you when you have support from the top. For example, when pushing an IT initiative, it is much more palatable for your client if the initiative is a company initiative and IT is just helping to make it happen. There is always resistance from the operations side when IT tries to push an initiative, , , it is usually seen as an “IT agenda”.
In the last company I was with, one of the hiring requirements I had was that I report to the CEO. It was based upon my need to be aware of what senior management was trying to do and also knowing that the CFO was not particularly strong. It helped insure I would be able to participate in key meetings and be part of planning processes, etc.
The CFO in this situation wanted IT to report into him, , , purely an ego thing I believe, , , but a condition of my joining the team was that I report to the CEO so I could be as effective as possible for the company.
A good CFO makes it a point to include the CIO in planning meetings and important sessions. A weak CFO doesn’t always understand the need for it.
Another issue is that some CFO’s tend to look at the glass “half empty” when they think of IT. What I mean by this is that some CFO’s only look at reducing IT cost as opposed to the leverage a good IT organization offers and what can be accomplished with appropriate investment in IT.
Now, most CEO’s I’ve worked for don’t want the IT department reporting into them, , , they don’t understand technology nor do they want to. In addition, they simply don’t want to spend much time listening to technology support issues.
To be effective, you have to be able to communicate with the CEO or President in business terms, not technical terms. Otherwise, they will be lost and will want you to report somewhere else as soon as possible, , , probably the CFO. 😉
Gain your senior manager’s partnership by creating a solid track record:
- All recommendations are business driven and offer business value
- All project recommendations are cost justified
- You discuss things in business terms, not technical terms
- You deliver what you say you will d0
At the end of the day, you have to navigate your way through the management structure of your company to insure your IT team is effective. Some reporting structures make it easier than others. The key is that the manager you report to is supportive of your efforts and helps you be involved at the right levels to become aware of things early that will require IT support.