With technology exploding on the scene, which role in a company has accountability for what? In a classic large organization, the CIO supports and manages the operational digital infrastructure, typically with a goal of improved efficiency: while, the CTO maximizes business value through technology aimed at accelerating effectiveness. Today, to save money, many organizations ask some lucky person to have two brains and be a CIO/CTO. Does that make any sense?
"The need to manage digital risk today at the Board level suggests companies establish a committee on par with the Audit and Compensation committee to oversee the digital risks of the organization"
Let’s start by looking at the role of CIO. The duties of a CIO have expanded well beyond supporting an ERP implementation and minimizing desktop support costs and include cybersecurity mandates, automation of manual tasks such as invoicing, the implementation of blockchain to create a distributed ledger, the capture of business information for advanced analytics, and maintaining a compute and storage solution that allows the company to be agile and efficient. Given the level of threat that exists to operations from a cyber-attack, CIOs have been assigned the accountability of protecting the continuity of operations and safeguarding corporate assets. Fundamentally, CIO’s now play a critical role in protecting the reputation of an organization. We seldom extol the benefits of CIOs because when everything works according to plan, no one notices. No successful attacks, disruption of service, network instabilities, and quick-unnoticeable recovery from issues marks the advantages of an accomplished CIO. This seems like more than a full-time job and often great success goes unnoticed. How do you motivate staff when they receive no recognition? Recruiting and retaining great staff can be daunting when the employees in the information technology organization realize they have almost no possibility of becoming CEO (unless you’re an IT company). Great IT professionals often seek employment with IT firms in order to have a shot at satisfying their personal career goals.
Many organizations further diminish the contributions of professionals in the IT organization by having the CIO report into the CFO, General Counsel, or other operational roles. Given the criticality of information technology to organizational success in today’s market this must be changed! I believe this frequently happens when CEO’s lack appreciation for the ancillary services required making the company successful. The need to manage digital risk today at the Board level suggests companies establish a committee on par with the Audit and Compensation committee to oversee the digital risks of the organization. This also suggests Board’s need to seek information technology directors that have the skills and competencies necessary to provide cybersecurity oversight. Placing this elevated level of importance on IT will strengthen morale and support digital success for the organization.
I think the other key to making an information technology organization great requires meaningful metrics. The petroleum industry fundamentally changed safety performance by escalating safety metrics and their review to the C-Suite and Board level. The scrutiny by the C-Suite and Board of near misses, high potential accidents, lost time incidences, etc. saved lives. We should require that same focus on our IT organizations. We need metrics that every IT employee understands and can take pride in exceeding. Recently, I observed the implementation of a cloud solution which reduced productivity by 50% or more for some tasks. If improved performance for those workflows had been the metric, there would have been no move to the cloud. For some processes, the bandwidth and compute over the net need to be rearchitected before the move can be made. The CIO must be the clear voice on when technology can be leveraged for improvement not an advocate for new but an advocate for better. I hope to see a company with the IT scorecard posted in the hall where every employee can realize the business value being created by the herculean efforts of IT professionals.
CTOs on the other hand have accountability for everything from new chemicals to neural networks. Given the breadth of knowledge required to understand all of the advances occurring that could benefit your organization, how can one person stay current? We used to have Chiefs: Chief Geologist, Chief Reservoir Engineer, Chief Production Engineer, Today this is less common than a decade ago. Organizations to stay lean have shifted from having a job for each core competence to having a role added to a job. Today we often see titles such as VP Operations Mid Continent and Head of Drilling Technology, VP Production Permian and Head of Completions. The CTO then assumes the role of Leader of the “Technology Council” an informal team in many cases that coordinate and share best practices across many different competencies within a company. The Council has the accountability for workflow while the “Chiefs” choose best in class technology associated with their respective skills.
In the oil and gas industry, we seem to have shifted from integrated platforms delivered by a couple of suppliers and managed by CIOs to an explosion of “Best of Breed” companies in nearly every technical area managed by CTOs. The emergence of “Technology Councils” bridges the integration void that exists when you move away from integrated platforms to managing dozens of suppliers that provide new components and narrow or unintegrated work flows. These councils make work processes functional. The pendulum has swung hard back to “Best of Breed”. We must focus on how we preserve work flows while adopting individual components. The CTO has the daunting task of choosing between more than a dozen ways to solve a problem and improve effectiveness. Great CTO’s have a network of trusted experts upon whom they depend to help choose the best components. Poor CTOs can cut the effectiveness of an organization by more than half their competitors.
You need both a CIO and CTO. If you have one person capable of doing both jobs you should feel blessed. Two tough jobs in the world today. We need GREAT leaders in both roles.