If you're not sure how much your company spent on technology last year, you're not alone. Sixty percent of the senior business and information technology (IT) executives participating in the Third Annual Diamond Digital IQ® Study didn't know either.

You may be wondering how the majority of business and information technology leaders surveyed by Diamond Management & Technology Consultants, Inc.® (NASDAQ: DTPI) could lose track of their technology spending. The advent of cloud computing, Software as a Service, and powerful personal devices like the iPad that enable some functions to sidestep the IT department may be a cause.

But the Diamond survey results seem to imply a shortcoming of the chief information officer. Based on the data, it appears the CIO's role has been weakening precisely at a time it should be growing stronger, given the advent of new technologies that could potentially improve business more than at any time since the emergence of the Internet in the late 1990s.

Diamond asked 724 senior business and IT executives from large companies their opinions on topics such as the CEO's role with respect to IT, the CIO's role in business innovation, overall business/IT alignment, and IT management practices. Collectively, responses help determine a company's ?Digital IQ.?

Less than 25% of respondents claimed the CIO's primary role in innovation at their company is to drive new business value. Only 55% of the sample viewed the IT executive as both a business and IT leader.

?The organization of the future is more flexible and self-organizing, all in the name of size and speed,? said Diamond President and CEO Adam Gutstein. ?In order to become big and fast, the CEO needs to create an environment where information is shared and investments are made in reference data so that people can freely come together to make and execute good decisions, run projects well, and harvest value?rapidly.?

?Business executives we surveyed put ?innovative thinking' and ?leadership abilities' at the top of their IT executive wish lists?much higher than ?deep experience in running IT operations,'? said Chris Curran, Diamond's chief technology officer and co-author of the study. ?The business clearly wants the CIO to drive growth as well as lead the IT function, but it appears nearly half of CIOs aren't delivering on the organization's hopes.?

Diamond's Third Annual Digital IQ Study is available by request to DigitalIQ@diamondconsultants.com, and available online.

The Unique Challenges of the CIO

More than any other C-level executive or functional head, the CIO fills both ?staff? and ?line? roles. In the staff role, the CIO has to provide the information to control the business, comply with regulations, and measure performance. In the line role, the CIO drives productivity, increases sales, and helps foster innovation. By comparison, the chief financial officer is clearly in a staff position while the vice president of sales clearly fills a line function. Only the CIO plays this dual role.

Some CIOs do appear to be driving significant business value at their firms. Diamond's survey results indicate that what sets those companies apart is an executive team that creates an environment where three critical dynamics foster better performance:

  • Alignment – Business and IT leadership, and their respective strategies, are tightly integrated.
  • Mobilization – The CIO ensures that there is a roadmap in place for the corporate strategy.
  • Execution – The ability to effectively translate strategy into results is bolstered by sufficient resources and clear accountability along the way.

There is no question that alignment starts at the top, but it's up to the CIO to create the ?trifecta? of alignment, mobilization, and execution. The survey data show that higher-performing organizations are three times as likely to have confidence in the CIO.

?If the business is asking for broad leadership and growth, the CIO needs to be willing to step up to that challenge,? said John Sviokla, Diamond's vice chairman and the study's co-author. ?After all, every business could use an informed, capable, and decisive technology executive to help the company unlock productive and innovative powers while simultaneously running the information factory efficiently.?

What the CEO Has To Do

This year's Digital IQ study offers clear direction for organizations who expect greater value from their IT investments.

?There was a high level of integration between business and technology at most of the better-performing organizations in Diamond's study, and 77% of respondents claimed to have a CEO who is a champion of IT's business value,? Sviokla said.

?Expectations are the bedrock of performance, so CEOs are right to count on the CIO for both excellent leadership of the technology function and to drive business growth,? said Sviokla. ?But this means it is also incumbent upon the CEO to include the CIO in senior executive discussions and to give the CIO visibility into all technology spending.?

Second, CIOs who demonstrate they are capable of delivering on their staff responsibilities by providing excellent support to the rest of the business must be engaged with rest of the senior executive team.

?The CIO can only create real value if he or she is helping shape strategy, resource allocation, and execution plans,? said Curran. ?CEOs who view their CIO as simply an order-taker are missing out on opportunities.?

Third, the CIO needs visibility into all IT spending, even if control of some spending lies outside the IT department. In fact, more than half the Digital IQ survey respondents said business leaders other than the CIO control at least 30% of the money spent on IT. If the technology leader lacks visibility into the full IT portfolio, the situation will lead to future problems in turning one-off investments into significant, long term business value.

About Diamond

Clients trust Diamond Management & Technology Consultants, Inc. (NASDAQ: DTPI) to help their companies grow, improve margins, and increase the productivity of their investments. Working together to design and execute business strategies that capitalize on changing market forces and technology, Diamond's consultants are experts in helping clients attract and retain customers, increase the value of their information, and plan and execute projects that turn strategy into measurable results.

Diamond's capabilities are rooted in deep strategy, technology, operations, and industry experience. The firm's approach to client service is based on objectivity, collaboration, and an unwavering commitment to its clients' best interests. Headquartered in Chicago, Diamond has offices in New York, Washington, D.C., Hartford, London, and Mumbai. To learn more, visit www.diamondconsultants.com.

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Diamond Management & Technology Consultants, Inc.
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Media Relations
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