Given the rise of technology as a center of power in corporate America it was perhaps inevitable that the executives charged with running the technology of a business would eventually need to perform in a manner more typical of a chief executive than a chief engineer.
A recent roundtable of top technology executives from Chase Manhattan Corp., Royal Bank Financial Group, American International Group Inc., and Cigna Inc. shows that - in their eyes at least - chief information officers are ready for, if not on the verge of, occupying the CEO suite.
"The CIO of the future will become a candidate for the CEO position," said Brian Slater, senior vice president of global markets in the operations and technology group at Chase. He spoke at the Financial Technology Expo in New York last week.
Information officers are changing "from being technology nerds to understanding how the business is run," said Martin Lippert, vice chairman and chief information officer at Royal Bank Financial Group.
Mr. Lippert estimated that by 2010 about 20% of the Fortune 500 companies will be led by people who have a technology background.
Panelists said this new status for information chiefs has forced them to operate under the same kind of scrutiny as CEOs and to frame their decisions with an eye to shareholder value. "Shareholders are becoming increasingly interested in expenditures on technology," said Kevin Murray, chief information officer for domestic brokerage claims and personal line systems at AIG.
He predicted that information chiefs might begin to report their technology spending separately from the rest of a banking company's results. Such a move would build on the separate year-2000 spending reports that banks have been required to file, he said.
The information chief's job has changed considerably over the years, said the four panelists, who included Stephen Fugale, a Cigna senior vice president. Many banking companies have increased the number of such executives and given each one broader business-line responsibilities.
Mr. Slater said the chief of Chase's Internet business, Chase.com, is also that unit's CEO. "We've moved from having a singular CIO to having five, one with each line of business," he said.
AIG has four information chiefs for its domestic insurance business, Mr. Murray said. "The CIO is involved in day-to-day operations," he said, calling this arrangement "the model of the future."
During the 1970s and 1980s bank CEOs generally came from the corporate lending side, which had the broadest impact on the institution, Mr. Lippert said. In the 1990s, the people running the technology-dependent retail business have had more prominence, he said.
Bank information chiefs are challenged to bring products to market quickly and to counter emerging competitors.
"The Net economy is not only global but it never sleeps," Mr. Murray said.
AIG gets customers involved in its technology development to ensure it is "getting to the users" and building the services they need, he said.
"I see us trying to do more with less," Mr. Murray said. "We'll be doing a better job of prioritizing where we're spending money."
