An evolutionary process: evolving CIO leadership requirements combine business strategy and technology savvy to drive growth and innovation.

The chief information officer's role is increasingly complex and demanding as the issues he or she deals with have become broader and more integral not only to business operations but also for business strategy. Despite these changing requirements, many CIOs continue to concentrate their efforts on day-to-day operations vs. longer-term strategic needs. In fact, most of the best technology ideas are coming from the strategy, sales, marketing and operations groups rather than the information technology function, according to a recent Information Week survey. The CIO and IT function increasingly needs to be helping lead business innovation rather than serving primarily as a maintenance function.

Forward-thinking CIOs are realizing that they need to be tied more to business growth instead of being viewed largely as a cost center with a continual focus on cutting. Their role is expanding from enabling and supporting business needs toward helping lead business direction, new product/service development and channel expansion. While serving internal business operations is still the major objective for most CIOs, there's an increasing recognition that strengthening customer satisfaction and making the company easier to do business with externally is equally as important. Revenue generation and creating competitive advantages are becoming more important objectives for leading CIOs.

In addition, dramatically greater reporting and compliance needs have created significant challenges for today's CIO. Forward-thinking CIOs are turning those requirements into opportunities to further leverage increased customer knowledge and business transparency to enhance the business. Improved customer databases and information are enabling organizations to better serve a number of constituencies and meet their broader needs while meeting regulatory requirements.

An evolving business environment also has required the CIO to shift from largely managing the internal IT organization and making outsourcing decisions to being effective at managing and integrating multiple IT providers. IT outsourcing has become quite commonplace and the decision-making process is a required core competency for most organizations. The organizational challenge is now on aligning and integrating internal IT functions with a series of outsourced providers.

These changing business and functional needs are resulting in a different set of leadership skills and competencies necessary for CIO success. The key competencies being sought for leading CIOs have expanded significantly and now generally include:

* Having strategic IT leadership and decision-making skills;

* Providing both strong business acumen and extensive technology knowledge;

* Demonstrating proven "best in class" strategy development and implementation effectiveness;

* Leading business innovation and long-term strategy reports, as well as enabling current operations;

* Partnering well with business leaders, external customers and distributors as well as IT providers and partners;

* Effectively leading in a complex matrixed and outsourced environment;

* Balancing business, customer, supplier and IT needs;

* Employing business, technology and change management savvy along with strong communications and people management skills;

* Being a business-focused, results-oriented leader, driving both short-term and longer-term business growth and profitability.

Leading organizations have recognized the evolving role of the CIO and are increasingly seeking a combination of strong business and technical talent in this capacity. The IT function clearly needs to evolve to recognize and address shifting requirements in order to best add value to the organization. This needs to start at the top of the IT organization and requires proven leadership to succeed in helping identify opportunities and drive profitable growth.

Shifting business requirements will continue to place greater demands on current and future CIOs. It's no longer sufficient to be just a strong technology leader. The CIO also needs to be a top business leader. While these challenges are somewhat daunting, the opportunity is significant for both the organization and the individual. The CIO role will increasingly become a viable path to the top business leadership positions. Are you up for the challenge?

Steven Landberg, a Best's Review columnist, is a managing director and senior vice president of InSearch Worldwide Corp. in Stamford Conn. He can be reached at [e-mail].