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News

CIOs still struggle to influence board decisions.

McAfee : 18 March, 2008  (Company News)
New research from McAfee reveals that chief information officers (CIOs) are still being sidelined at board level with only 47 percent presenting IT issues in board discussions.
In almost half (45 percent) of the organisations surveyed it remains the chief executive officers (CEO) that take the lead on IT issues while one fifth of chief financial officers (CFO) represent the IT department. The findings clearly highlights how IT chiefs need to do more to raise their visibility and influence as IT is increasingly considered core to business reputation and success.

McAfee commissioned the Economist Intelligence Unit to conduct the research, which explored the evolving relationship between the CIO and the board. Fortunately, despite the apparent lack of true influence in the boardroom, progress has seemingly been made in raising the overall profile of the CIO and the perception of IT department responsibilities.

Moving beyond the traditional concentration on cost-efficiency, 42 percent of respondents now see IT primarily as a strategic business function. With the growing corporate focus on regulatory compliance, good governance and risk management, IT organisations are now tasked with assessing and measuring risk alongside the finance function.

Not only do almost a third (30 percent) of respondents believe that the IT department is primarily responsible for facilitating system and network security - cementing the CIO's role as an enabler of good corporate governance - but 31 percent see the role extending to the enablement of revenue generation. As such, 83 percent of respondents agree that this growth in portfolio has helped raise the profile of the CIO at board level and a quarter believe that the overall relationship with the board has improved substantially over the past two years.

The biggest challenge to CIO prominence comes from CFOs with the vast majority (86 percent) of respondents at this level viewing IT as simply a support function.

Additionally, none of the CFOs questioned saw the IT department as primarily responsible for revenue generation, with 71 percent opting instead to brand them primarily as providers of system and network security. When you consider the whitepaper's finding that around 20 percent of CFOs speak on behalf of the IT department at the board level, this slightly off-key view of the importance of IT is concerning.

However, while the role of the CIO is expected to continue to grow in parallel with the increased need for good corporate governance, the tough business environment means that just shy of a quarter (23 percent) of firms will make no change in the amount they invest in Risk Management in the coming year. An additional 30 percent will make no change in the amount they invest in compliance. This means that while 82 percent expect regulation to increase over the next few years, investment will remain flat and the IT department will be forced to respond to more demands on the same resources.

Greg Day, security analyst at McAfee said: "It is worrying that in a day when governance, risk and compliance are now crucial for business success, only a minority of CIOs are fully participating at board level. IT chiefs need to capitalise fast on the progress they have made over the last few years to ensure that the full business case for investment in IT is understood by corporate decision makers."

"It has been a hard-fought battle to get the board to recognise the strategic value of the IT function, and the battle is not yet over" said Clint Witchalls, a Senior Editor at the Economist Intelligence Unit. "The CIO needs to be careful that the current economic slowdown doesn't see them relegated to their former role as cost-cutting box-shifters."
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