by David E. Otte, Chief Information Officer, Sidley Austin LLP (a global law firm with 17 offices & 1700 lawyers)

Chief Information Officers (CIOs) have traditionally risen up through the technology ranks, usually focusing on an area specific to applications, infrastructure, operations, etc. Strong technical expertise has long been viewed as the main criteria for becoming an effective IT Leader. Although I think technical expertise should not be dismissed (I agree that the CIO must be competent in technology), IT chiefs should also have a strong business background.  It is no longer enough to have successfully implemented ERP solutions, managed desktop migrations or installed data centers. Businesses are now requiring that the leaders of technology departments have experience in accounting, sales, marketing, product development, etc. After all, most companies are in the business to sell products or provide services supported by technology and not the reverse.

C-level executives need to ensure that their peers and other direct reports understand the business as well as the technology. Understanding technology is critical to manage an IT organization; however, given the new economy, it has become apparent that understanding the business and being able to run IT like a business is more important than pure technical expertise. A CIO that comes from a pure technological background often understands and views operations from the perspective of system availability metrics. A business-focused IT executive understands the importance of operations but more importantly understands the direct relationship to the customers. The closer you are to your customers, the better you can allocate resources to maximize the efficiency of your operations.

CIOs should spend significant time with their customer bases. This includes the individuals they support within the company and company customers. By understanding their customers as well as the services and the products the organization supports and generates revenue from, the IT executive can better align the IT structure to support their customers’ needs.  The successful CIO of the future must understand the business and align the technology to support the business–not vice versa. They can start by meeting with their peers in accounting, sales, marketing product developments, etc. to build relationships and understand the internal business processes and the associated customers. In addition to building relationships with their internal constituencies, the CIO should also become familiar with how the services that the IT organization provides affect external customers.

CIOs should look for opportunities to leverage their IT resources to make their customer relationships “sticky.” For instance, if there are ways to share information with clients in a secure manner for collaboration, the CIO can be directly involved in strengthening business relationships. Obviously, the CIO can’t do this by remaining insulated from external customers. In short, it is critical for the CIO to build strong relationships with both the internal and external customer bases.

The importance of having a strong technology background to be the CIO should not be underemphasized, but it should be considered equally important to have a strong business background. Understanding not only technology but also the IT service needs of the company and the customer base should be the CIO’s focus. The effective CIO understands their customers and will translate the business objectives into appropriate technology solutions for their business. Doing so converts the IT department from a cost center to a revenue enhancer.