How did the CIO role originate and how has this role evolved since the 80s?

The research briefing regarding the client’s question: How did the CIO role originate and how has this role evolved since the 80s?

INSIGHTS

-The role of CIOs evolved substantially since its introduction in 1981 when many of them were portrayed as simply glorified data processing managers.

-As noted by IBM, first CIOs were Alfred R. Zipf of Bank of America, and Max Hopper of American Airlines.

-Studies suggest that companies with strategic orientation towards IT have their CIO report directly to the CEO.

FINDINGS

Hello! Thanks for your question on how did the CIO role originate and its evolution since the 1980s.   

OVERVIEW 

The short version is that the role of CIOs evolved substantially since its introduction in 1981. From the initial perception of “trendy title”, CIOs became key executives in many companies reporting directly to CEOs. Building on this heritage, modern day CIOs are tasked with various duties with key mission to translate IT investments into the competitive advantage for the company. Below you will find a deep dive of my research / findings along with all the details for how I came to this answer.  

ORIGIN OF THE CIO ROLE

As per the research of Stefanos A. Strickland and Babis Theodoulidis from University of Manchester, the role of Chief Information Officer (CIO) evolved substantially since its introduction in 1981. This job title came to fame in 1986 with BusinessWeek magazine flashy headline “Management’s Newest Star: Meet the Chief Information Officer”. Most studies I consulted consider that the penetration of technology and personal computers in homes across the world, as well as the need to analyze growing data and achieve the competitive advantage, fueled the growth of CIO roles on the global scale. 

Balancing between data processing and IT related duties on the one hand and the business side of the operations on the other hand, scholars argue that the role of the CIO passed through various phases and is currently in its fourth wave.  

Gordon Hunter from University of Lethbridge wrote in his research paper that in the first wave CIOs were portrayed as “simply glorified data processing managers”. In the second wave, CIOs were seen as technology experts in the role of technocrats, while in the third wave they evolved to include business executive perspective in their work as well. The current fourth wave is CIOs combining technocratic and business perspective into a single role.

QUALIFICATIONS AND BACKGROUND OF EARLY CIOS    

As noted by IBM, first CIOs were Alfred R. Zipf of Bank of America, and Max Hopper of American Airlines.    

Zipf was, wrote the New York Times, one of the pioneers in computer technology and electronic banking. He created, in cooperation with Stanford Research Institute and General Electric, “the first large scale, general purpose computing system for the banking industry”. In addition to this, he worked on reducing check processing time by introducing technological improvement and various other projects. Coming from IT background, he was fit for the role of CIO that was awarded to him in 1980s.

Max Hopper implemented series of technological projects in American Airlines such as InterAAct system and Sabre reservation system. He was also crucial in connecting the operational side of the company in a common information stream, and is seen by many as a “founding father of IT inspired competitive advantage”.

Modern day CIOs follow the footsteps of Zipf and Hopper in a sense that they are IT savvy individuals with an understanding of how to utilize IT for achieving the competitive advantage.  Studies I consulted view modern day CIOs as individuals whose post includes roles such as information strategist, co-creator/advisor business strategy, IT portfolio manager, enterprise architect, business advisor and trend watcher. These roles clearly show how the responsibilities of CIOs increased over time, as well as their number as evident by the fact that Center for CIO Leadership sponsored by IBM has 2.700 members in 70 countries.  

PERCEPTION OF CIO  

The original idea back in 1980s when the title of CIO was introduced was to place IT on the same level as accounting, human resource, sales and others business units. But CIO title was at that time seen more as a “trend title”, rather than a sign of strategic orientation towards technology.  

What is interesting to notice is that public sector is late in introducing CIO role compared to private sector. In Australia, which is considered one of the advanced countries in terms of IT projects implementation, only in 2006 introduced CIO role for the whole of government.

TO WHOM CIO REPORTED

There is no definite answer to whom CIOs reported throughout the history. Rather, the hierarchical structure of reporting depends on the value that companies place on IT. Studies suggest that companies with strategic orientation towards IT have their CIO report directly to the CEO. On the other hand, firms where IT functions act as cost-cutting tool in an operational role tend to have their CIO report to the CFO. The two approaches are indication of the influence CIO and IT unit wields in the company. Most of studies that I examined are indicating that CIOs are increasingly reporting to CEOs as companies tend to view technology as a tool to achieve competitive advantage in most business sectors. In the early 1980s, CIOs tend to report to CFOs.

SUMMARY 

Overall the trend in the industry is that CIOs are becoming key players in the board decision making process, and that they went great length from “trend title” to becoming strategic visionaries and invaluable asset to CEOs. As technology keep progressing, so will the role of CIOs both in private and public sector. 

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The research brief was originally published in 2017 on the Wonder’s website.