CIO vs. CEO – which role has the greatest influence in building a digital-first business?
Both play an important role in steering an organization, of course. But in recent years, CIOs have taken greater and greater control over an organization’s digital strategy and its digital transformation efforts.
Below, we’ll examine the roles and responsibilities that CIOs and CEOs play in building the digital business.
CIO vs. CEO: Who Is the Chief Digital Strategist?
Researchers and analyst firms generally come to the same conclusions around the role that CIOs and CEOs play in digital transformation:
C-suites are relying more than ever on CIOs for guidance
CIOs’ relationship with the business, according to Gartner, is stronger than ever. This is especially true since COVID-19 has accelerated digital transformation around the world.
According to their 2021 CIO Agenda report, for instance:
- 70% of CIOs are leading high-impact initiatives
- 80% of CIOs are educating CEOs and other stakeholders on the value of IT
- 70% of CIOs deepened their knowledge of specific business processes to advise the business
The report also suggested that CEOs and CIOs are building stronger relationships as a result of the pandemic.
This makes sense, since success in the digital economy depends on building a technology-driven organization.
Organizations that continue to operate in silos or fail to keep up with digital trends will have a harder time succeeding in the digital era, as we’ll see below.
CIOs are designing, planning, and implementing digital strategies
Unsurprisingly, CEOs control the finances of all an organization’s initiatives, including digital initiatives. Their support is clearly required for a digital program to succeed, yet CIOs are often the ones who create and lead digital transformation strategies.
According to a report from Tata Consultancy Services, for instance:
- 75% of survey respondents claim that the CIO office participates in digital transformation ideation and strategy
- 61% of CIOs take a leadership role in governance and project management
- The most successful companies in the survey allowed CIOs to lead transformation efforts (73%), in contrast to the less successful companies
However, when it comes to budget decisions, other executives tend to take the helm.
Among those surveyed, CEOs (35%), CFOs (29%), and production and manufacturing operations (20%) are more likely to set budgets than CIOs (18%).
There are several important takeaways from this study.
For instance, the most successful companies allow CIOs to design and lead digital initiatives. This suggests that companies should adapt and rethink the CIO’s role in the company.
Also, the higher-performing organizations allowed CIOs to manage other important IT functions, such as:
- Researching emerging tech
- Data security
- Data and analytics
In short, there is a strong correlation between a company’s digital success and the amount of responsibility that company gives its CIO.
At the same time, however, Tata’s study also showed that digital consensus is another contributing factor to an organization’s success.
CEO involvement is essential
Another finding from the study showed that success is often contingent upon cooperation and consensus at the highest levels of the organization.
For instance, at the leading firms, the CIO’s vision aligned with:
- Boards, CEOs, and C-suites 86% of the time
- Line-of-business (LOB) executives 92% of the time
Developing “digital consensus” among the upper echelons of the business, therefore, is essential.
Gartner agrees with this conclusion, and has even recommended that CIOs foster relationships with other C-suite executives, including:
- CEOs, the board of directors, and their direct reports
This alignment is becoming more and more necessary as the economy and businesses become more digital.
Digital technology, after all, often disrupts businesses both at the local and the global levels. That disruption can result in complex digital workplaces, continual change, fragmented business functions, and more.
To compensate for the disruptive impact of technology, it is important for both CIOs and CEOs to collaborate closely and ensure that their efforts are in alignment.
Here are a few of the important takeaways from the research we examined above:
- CEOs lead the organization, but CIOs lead digital transformation efforts
- Successful companies provide their CIOs with more responsibilities, not only when it comes to digital strategy, but also when it comes to other IT functions
- C-suite executives must step up their efforts to collaborate and stay aligned in the face of the increasing fragmentation that is caused by digital technology
As the CIO’s role continues to evolve, they will spend less and less time on IT operations and legacy technology and more time on business strategy.
To survive, succeed, and lead in tomorrow’s digital-first economy, business leaders must be prepared to innovate and offer their CIOs more responsibilities. To learn more about the CIO’s role in the digital future, read our article that discusses how the CIO position will change in the months and years ahead.