Study Finds that CIOs Are Making Fewer Data Center Decisions Than CEOs

5 Jun 2014 by Technology

"Conventional wisdom holds that chief information officers helm data center decision-making processes. As the place where a company's information is stored, processed and secured, a data center seems to fall directly under a CIO's purview. However, new research suggested that chief executive officers, as part of their overarching management strategy, are actually making the majority of the critical choices concerning data center investments.

The ramifications of this revelation include the fact that big data and data centers have shaken up enterprise C-suites in a way that few developments have. The CIO's role is changing in the face of big data complexity and the resulting security issues, and some wonder if their pivotal role is actually in danger of being phased out.

CEOs Take Charge
A new international report released by Forrester Research, ""Data Center Purchasing Drivers, Priorities And Barriers,"" produced some interesting findings. The study, which was commissioned by Digital Realty, surveyed senior-level decision-makers in the United States, United Kingdom and nine other countries about their organizations' data center investment strategies.

Respondents were asked to rank the top three decision-makers in their organization, in order of importance. Surprisingly, CEOs were named as the most influential person in IT capacity sourcing, colocation and data centers in 30 percent of organizations. CIOs were cited as the top source of influence in 25 percent of companies, while vice presidents of information technology were the lead decision-makers in 20 percent of companies. Chief operating officers, VPs of finance and chief financial officers rounded out the list of the most influential enterprise decision-makers, with 11 percent, 5 percent and 4 percent of responses, respectively.

CIOs were cited as the second-most influential figure in data center decisions by the highest percentage of respondents, tying with VPs of IT at 19 percent. Overall, CIOs were listed as the first or second most-valued opinion in 44 percent of companies, while CEOs were in the top two in 40 percent. But the shift in the final say is still interesting.

A Changing of the Guard?
While it certainly makes sense that large-scale resourcing and data center investment decisions pass under the CEO's approval, giving the CEO primary decision-making power over the CIO could signify several things. It could be an acknowledgment of the rising importance of data center and IT capacity sourcing choices in organizations, especially as the cloud and big data connect IT portfolios with bottom-line business considerations like never before. It could also stem from the increased importance of data loss prevention and information security, especially in the wake of reputation-killing data breaches and unplanned data center outages.

It could also mean that the role and responsibilities of the future CIO are quickly outstripping the existing skill sets and corporate obligations that current CIOs possess, wrote ebizQ contributor Adrian Grigoriu.

""If there is no technology left to manage why should we talk about a CIO?"" he asked. ""There is no more technology to take care of and business integration is the priority now. Services, coming together from various providers such as IaaS, SaaS, PaaS, have to be harmonized in an efficient operation in what we may call a virtual cloud enterprise.""

Grigoriu argued that the CIO role will soon mean something more akin to a chief enterprise architect than a traditional information czar. The person in this role will be responsible for navigating and smoothing over the innumerable connections between on-premises business devices and applications. He or she will also oversee infrastructure environments fully hosted and managed in the cloud or a data center.

How CIOs Can Be the Agents of Their Own Destinies
It's not time for CIOs to start clearing out their desks, however. What many industry analysts acknowledge is simply that the nature of the role will change as the cloud and data centers take over. In a recent survey conducted by IDG Research Services, IT directors and other IT-focused executives spoke about the ways they would like to see their roles change. Many stated that a large portion of their responsibilities can be considered ""keeping the lights on"" tasks, with enhancing system performance and implementing new architectures as the kinds of activities that consume a majority of their time.

The survey also found that many IT leaders would rather see their roles shift to a more tech-business hybrid, embracing the sort of bottom-line thinking that governs the evaluations processes of enterprise CEOs. Respondents indicated that they wanted to be more involved in several key areas of business development:
Identify potential competitive differentiation opportunities (48 percent of respondents)
Strengthen business and IT partnerships (42 percent)
Participate in business innovation (41 percent)
Better align IT objectives with business initiatives (35 percent)
Refine company strategies (32 percent)

""IT is a source of key business innovation, and it is the responsibility of IT executives to communicate the strategic value of that innovation,"" stated Lee Congdon, the CIO of Red Hat, which commissioned the study. ""The survey results clearly show the need for IT executives to have a broad understanding of their organization, and to increase the collaboration between IT and business leaders. It is through this collaborative innovation that not only perceptions will change, but also business results will be driven."""

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