Do All Companies Need a CIO?

Ann All

In my discussions of the evolution of the CIO role, including whether it's important for CIOs to have a technical background, I pretty much take it as a given that companies need a CIO or other high-level IT manager. If anything, some companies may need two folks in the CIO role rather than one.


But a post on the USourceIT blog has me thinking about it. The premise of the post is that while tech executives are essential in large enterprises, those with 500 employees or more, CIOs are less necessary in companies with 100 to 500 employees. It says a better fit for those organizations (which it calls Tier 3 companies) is an on-demand CIO (which I take to mean someone who assumes CIO duties on an as-needed basis).


The reasons offered:

  • Contract CIOs are less expensive than employing a full-time CIO.
  • Different contract CIOs can be called in to meet current needs. For instance, if a company's focus is on applications, it might want an applications architect.
  • Similarly, contract CIOs with specific vertical or horizontal expertise can more rapidly help align IT to business needs. Such alignment is a continuing challenge for many companies.


Of course, USourceIT has an ulterior motive in promoting these kinds if positions, since contract CIOs are among the services it offers. Still, it makes sense. I see a possible snag, however, in a contract CIO's unfamiliarity with company culture. I think this is often a problem for consultants and other external business partners brought in to help a company out. At least one person who commented on the post agreed with me. Wrote Jeff Hecht:

The advantage that [an internal] Tier 3 CIO may have is closer connection and greater understanding of the business. Its not as difficult to get good information on technical solutions as to understand what would really work for a specific enterprise.

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Sep 25, 2009 11:28 AM Peter Kretzman Peter Kretzman  says:

Whoa. I've been an interim CIO (NOT what I'd call a "contract CIO"), a number of times.  Interim is one thing: it's often needed when a company is in transition and searching for an employee to fill the permanent CIO spot.  It keeps the trains running. But oddly, I think it's a mistake for companies to think that a contract CIO, especially not full-time, is a wise idea. The difference? Most importantly, it's simply not a part-time job, not if you want someone to be effective.  To think that it's possible to get "someone who assumes CIO duties on an as-needed basis" makes a huge assumption that these duties come and go, ebb and flow. Rather, my view is that they are constant, looming, enormously varied, strategically oriented as well as tactical, not to mention high-stakes in nature. A reasonably-sized (say, 150 employees or more) company can't afford to do without someone to fill those duties, ALL the time.  A good interim CIO will do that, for as long as you need him/her, and will be up to speed quickly. My view is that a contract CIO, serving part-time, can't possibly be as effective.


Peter Kretzman

Sep 28, 2009 1:25 AM richard reihs richard reihs  says: in response to Bill Morgan

Sorry Ann, Bill Morgan wrote a better article.

Sep 28, 2009 11:30 AM Bill Morgan Bill Morgan  says:

Ann, you started the first paragraph correctly.   I am in the business of staffing senior level IT people in companies both large and small and the need is very different.

Every company needs someone that understands technology working with them in some capacity.  Part of the problem  is the title CIO.  A company's size will determine actually what they need and forget the title for a minute.

There should be someone in the organization that understands how technology can take the company to the next level on a strategic level then there is the tactical matter of getting the job done.

Small businesses that are not IT based must utilize technology and need someone to guide them on what to do (this may be a consultant, board member, advisor) and a tactical person on board who can get the job done. A company that is completely IT based (ie; development company) needs a CTO immediately.

As a company grows in size and becomes more reliant on technology and actually sees it as a strategic imperative then the role of IT Manager becomes one of more a CTO or CIO but again that then may be a Part-Time Role with a full-time technical team until such time the # of projects and strategic initiatives become so large that it become necessary for a full-time CIO.

A senior Technology advisor is critical on the senior management team of any company.  That person often is not be the individual writing code and setting up security and keeping the company afloat.  The role is oftentimes the same unfortunately in smaller companies then it's an obvious split when the company progresses to bigger things.

Bill Morgan

Segula Technologies


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