The question may sound almost blasphemous, particularly in light of numerous CIOs and CTOs I know who are all looking for a job – nevertheless it is a topic of great interest. Just to ensure we all have the same understanding, let us define a CIO to be the “architect” who aligns IT to the business ensuring “best value” for the business. CTO can be defined as the individual who delivers the IT in the most efficient manner possible. To address the issue of whether a CIO or CTO is required, let us first classify companies based on size.
Ignoring the Fortune 1000, there are 17000+ companies who have between 500 and 10,000 employees. Let us call these companies Tier-2 companies. There are probably 200,000+ companies who have more than 100 employees but less than 500. Let us call these Tier-3 companies. There are millions of companies smaller, and for the sake of this discussion, let us ignore them (even though they may have IT needs).
The role of both a CIO and CTO is critical in Tier-2 companies, and I am going to assert that these roles should not report to a CFO, but should report directly to the CEO or COO. It is possible, and likely, that the CTO reports to the CIO and may not even be called a CTO, but that is less important for this discussion.
Tier-3 companies who tend to emulate a Tier-2, generally have a CIO. I take the position that in such firms, the role of a CIO is greatly exaggerated. After all, once the IT vision is articulated, the role becomes more of a lower level delivery manager. My view is that for such firms, an on-demand CIO service is valuable. Organizations like Office of the CIO, USourceIT all foster on-demand services. The advantages of the on-demand service are:
- There are no excessive fixed costs (a small retainer plus on-demand service provides continuity).
- Different skills are brought to the table based on demand – for example, if the focus is applications, then an applications architect may be better suited for the business.
- Experience in different verticals and horizontals can help “reuse” the knowledge base – for example, if a firm needed CPG and manufacturing experience, then a CIO who has worked in such environments can offer rapid solutions to align the IT to the business needs.
The key to success for a CIO on-demand service is to provide a trusted value driven turn-key IT capability to Tier-3 companies that enables them to compete, grow and operate effectively.