World-class IT organizations also hire managers and professional staff with far greater business knowledge and a much higher percentage have advanced degrees than at typical companies. Finally, world-class CIOs have completely eliminated parts of their IT organizations that report locally, and drive significantly higher levels of centralized reporting.
"One of the consistent themes we see in our research is that the SG&A functions which perform the best are more closely aligned with the business," said Hackett IT Practice Leader Doug Barta. "This is particularly true in IT. World-class IT organizations go beyond supporting the business at a basic level, helping identify and leverage competitive opportunities.
"One fundamental way to ensure that IT is optimally aligned with goals and objectives of the business is to have its most senior executive involved in decision-making at the highest levels of the company," said Mr. Barta. "There are few new initiatives in which technology does not play a critical enabling role. But in many typical companies, since the CIO doesn't have a seat at the senior management table, these initiatives are planned without adequate input from the IT organization. The result is that the technology component is flawed, costlier than envisioned or delivered late - any one of which can sink an otherwise worthwhile new project."
According to Hackett Senior Business Advisor Scott Holland, "CIOs that report to the CEO are much more likely to be a business executive with deep operational, sales, or marketing experience. But at companies where the CIO reports to the CFO, they are more likely to be focused on technical expertise, maximum efficiency, and cost control. This doesn't put them in the best position to drive strategic value."
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