Technology
Artificial Intelligence Propels CIOs Closer to the Corner Office
Jun
Chief Information Officers (CIOs) are increasingly reporting directly to their Chief Executive Officers (CEOs) rather than Chief Financial Officers (CFOs), underscoring the growing importance of their role in shaping corporate AI strategies to stay competitive.
Expanded Responsibilities
Traditionally, CIOs managed information technology systems, including data centers, cloud computing, and business software. However, their responsibilities now include modernizing IT and data systems to leverage generative AI and establishing AI strategies. This shift signifies an expansion of their leadership role within businesses.
“They’re putting more and more on the shoulders of that individual,” said Rob Zelinka, CIO of financial technology firm Jack Henry & Associates. “That person is likely responsible for their data strategy, AI strategy, and technology strategy.”
Rob Zelinka highlights the increasing burden on individuals managing data, AI, and technology strategies, Barron’s Print Edition said.
Rising CEO Connectivity
A survey by consulting firm Deloitte in February revealed that about 63% of U.S.-based technology leaders now report directly to their CEOs. This structure has grown for U.S. CIOs, increasing from 41% in 2015 to 52% in 2023.
Conversely, the percentage of CIOs reporting to CFOs has decreased from 26% in 2015 to 12% in 2023. Deloitte is a sponsor of CIO Journal.
Strategic Importance Recognized
Analysts and CIOs view this change as significant, recognizing the strategic importance of technology. When CIOs report to CFOs or Chief Operating Officers (COOs), IT is typically seen as a cost and support function, not a profit driver.
This shift also highlights the top-down leadership of generative AI initiatives. Unlike previous innovation waves funded by IT departments’ internal budgets, some CEOs and boards are specifically allocating funds for AI.
“Interest in generative AI at the executive leadership level has never been higher around technology,” said Lou DiLorenzo Jr., principal and national U.S. CIO program leader at Deloitte. “Being at the table allows the tech executive or CIO to shape that narrative.”
Surging Corporate Interest
Corporate interest in generative AI has surged since late 2022, when OpenAI publicly released its ChatGPT chatbot. While most enterprises are still figuring out how to apply and govern the technology and choose vendors, CIOs now have the opportunity to guide their organizations, added DiLorenzo Jr.
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New Expectations for CIOs
Enterprises and CEOs that haven’t been investing in data management and new technologies are more likely to ask their CIO to establish an AI strategy, giving them full control over a critical business component, said Martha Heller, CEO of IT executive recruiting firm Heller Search Associates.
While technology shifts like mobile, cloud computing, and software-as-a-service have created opportunities, “the modern organization is heavily reliant upon all things data,” said Manu Narayan. Manu Narayan is the vice president of IT, data, and operations at data-processing firm Confluent. He oversees the organization’s internal data team. AI and data management are both opportunities for CIOs to set direction.
New Executive Roles
George Kurian, CEO of NetApp, mentioned the company is hiring a new executive vice president, reporting to him, to oversee AI, data management, IT, operations, supply chain, and cybersecurity.
“We saw the needs of both digital enablement and AI enablement with data becoming more sophisticated and complex,” Kurian said, “and needed an executive at the leadership table to work across the different functions.”
Spotlight on CIOs During the Pandemic
During the pandemic, CEOs increasingly turned to CIOs to facilitate remote work preparations in businesses. This trend, coupled with ongoing technology upgrades and digital tool management for customers, has highlighted the CIO role. Anjali Shaikh, a Deloitte managing director and U.S. CIO program experience director, noted the role’s evolution over four decades. CIOs are gaining prominence as they mature into pivotal figures within organizations’ strategic landscapes.
Evolution to Center Stage
Today’s AI boom marks just the latest chapter in the role’s evolution from the back office to center stage.
“Generative AI has just reinforced the need for a technology and digital leader who understands the business mission and outcomes, and how they are connected,” said Lisa Davis, CIO of Blue Shield of California.
Davis began reporting to the health insurer’s CEO in 2022 to directly join conversations about technology transforming the business. While her responsibilities remain the same, influence at the CEO level has sped up tech modernization projects. She said this has led to faster implementation of these initiatives.
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