I’m often asked whether the CIO should report to the CEO and why. About 40% do; the majority don’t – even in this digital age when tech seems so important to everything. Looking back at the last 15 years or so, I think it’s quite clear that CIOs usually report to CEOs when there is a “great” IT mission in play. If there isn’t one, then IT is more of a maintenance function making sure business-as-usual runs smoothly – and that might not warrant the CEO’s frequent attention.
A great IT endeavor is one where a technology based change to the business is going to have a multi-year, material affect on financial performance. That means either the revenue or the profit of the company is impacted in a way the investors will notice and care about. There have been many of these great endeavors – some of them quite general purpose and multi-sector for example:
But often the great endeavor is industry specific. And sometimes an industry can have a fallow period where there is no obvious IT great endeavor. For example I spent many years in airline IT, where over the decades there have been a number of great endeavors that had huge bottom line implications:
Frequent flyer programs
Schedule and reschedule optimization
Web direct selling
Most of these things were capable of moving the profit margin of an airline by a couple of percentage points – with serious financial performance and competitive effects. But it’s hard to see a new thing of quite such scale in the airline industry right now. Giving crews tablets is cool – but it won’t be big enough to move the share price of a large airline ( e.g. “IPads Help Airlines Cast Off Costly Load of Paper In the Cockpit, Navigation Charts Go Digital; American Sees $1.2 Million in Fuel Savings” ). I have no doubt something really big will arise again for airlines, from some combination of newer technologies: mobile, social, cloud, data science, robotics etc. ( if you know what that thing is – let me know ).
This week we all saw the video from Amazon, suggesting that one day soon battery powered, autonomous octo-copters might bring goods to your door. Others have already had that idea – like the Dominoes pizza “Domicopter“. Perhaps “drone delivery” is a new great endeavor in the making, for a generation of transportation and logistics CIOs. Reports suggest experiments of some kind have probably been undertaken at UPS and FedEx. From such ripples, massive industry progress waves arise – as we are seeing with the arrival of e-cigarettes in the “tobacco” industry.
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