It’s my guess that in most organisations, IT Directors – or CIOs, or Heads of IT; the term is largely interchangeable, generally speaking – report to the Finance Director.
I’m sure that there may be some exceptions, but in my experience IT has always been part of the overall Finance remit.
Finance Departments were usually the first part of an organisation to have computer systems, and by the time you’d factored in the price of the software, consultancy and hardware, invariably a mainframe, the cost was significant. Two good reasons to put IT under Finance, then; they were the biggest stakeholder, and they were responsible for finding the money to buy and operate it.
Back in the 70’s, (and apologies if this is starting to sound like a history lesson) when all this was happening, IT was functionally much closer to Finance than it is now. There was a strong focus on control, standardisation, procedures and maintaining a consistent operation. Any change to a production system needed four signatures.
Somehow, over the last 40 years, IT and Finance have grown apart. It may have been the advent of the personal computer, the web, or the way IT systems have become much more sophisticated. It could be a combination of all these things, but one thing is clear – somewhere along the way IT has become much less operational and much more strategic.
The consequence of this, in my view, is that IT Teams are not best served by their link to the Finance Department. Don’t get me wrong, I’ve worked with some excellent Finance Directors, but it seems to me that they have more of a governance role than a strategic one, and I believe that this is holding many IT Departments back.
IT, as a business function, is becoming much more dynamic, and is most effective when supporting organisational change.
The ideal scenario, as I see it, would be for the IT Director to be on the board, or to report to a Director of Strategic Development (if such a post exists). In fact, I think the IT Director\CIO role will eventually evolve into something with either Strategy or Change in the job title.
I also think that this would send the right message to IT professionals by showing them that
- The value of IT is properly appreciated at senior levels and
- It’s taken seriously enough to have board level representation
I’d be interested to hear of any examples of IT Directors reporting to someone other than the Finance Director, and whether this arrangement works well.