Supporting strategic initiatives outpaces pure efficiency andcost reduction elements in terms of the highest goals amonginsurance industry CIOs. That's the takeout from Novarica's latestresearch report: “Creating Enterprise Value as CIO.”

Novarica polled CIOs on what they perceive to be the area ofhighest impact on the company as a technology leader and nearlyhalf—45 percent—listed “supporting new strategic initiatives” asthe top response.

“It shows the CIOs have strong participation in a company'sstrategy and execution,” says Matt Josefowicz, partner and managingdirector for Novarica.

Responses to the question on the areas of highest impact vary,depending on the philosophy of the companies the various CIOs workfor.

“It's going to depend on whether expansion and new strategicinitiatives are part of the highest corporate goal or whether acompany is in more of an efficiency mode to protect theirposition,” says Josefowicz.

Twelve percent of CIOs answered that driving innovation inoperations is their area of highest impact and another eightpercent responded with driving innovation in products or services,according to Josefowicz.

“Having 20 percent of respondents list innovation as theirhighest area of contribution is frankly more than I expected,” hesays.

Josefowicz believes the report shows theevolution of the CIO as a “strategic business executive” as opposedto someone with specialized skills. Twenty-two percent ofCIOs rated their relationship with business leaders as the mostimportant factor in a CIO's ability to deliver with another 17percent responding “business alignment.”

Only 16 percent rated their technology knowledge and skills astheir most important skill.

“It would be interesting if you did this study with CFOs and yougot a comparable response on meeting with line of business leadersvs. accounting and financial management skills,” says Josefowicz.“That result wouldn't surprise anybody. Even though CFOs havespecialized knowledge, it is more natural to see them ascontributing to overall strategy. CIOs definitely are on that path,though.”

The study looked at how CIOs view their business counterparts inthe area of understanding what exactly the IT department does.Having CIOs gain a better understanding of what the business sidedoes appears to be more important than having the businessunderstand IT. Only 11 percent of respondents feel the CEO orpresident of their company understands the mission-critical systemsoperating within IT, with 41 percent responding “not well” to thequestion.

“This was expressed very clearly to me by a CIO: If the CIO andthe CEOdon't get along anddon't understand each other, who getsfired?” says Josefowicz.

Good senior business executives make an effort to understand keyissues in terms of the technology underpinning their business thesame way they understand financial management issues, HR issues, orany other issues that are critical to the business, according toJosefowicz.

“Certainly with insurance as an information business,understanding the information technology capabilities and keyissues is important,” he says. “That being said, I was heartenedthat only 24 percent of CIOs felt that [such a lack ofunderstanding] was a problem. That's still a significantpercentage. Twenty-four percent of CIOs are fighting uphill againsttheir business leaders' lack of understanding.”

Josefowicz believes that points to the need for CIOs tocommunicate more effectively the importance of IT issues ratherthan “wishing it were otherwise,” he says.

“Unfortunately, it's the CIO's responsibility to make sure theCEO understands well enough not to be an inhibitor,” saysJosefowicz.

The study also asked where the future leaders of IT will comefrom. Josefowicz points out there are differences betweentraditional IT leaders and someone who looks to do thingsdifferently.

“An innovator, by definition, is someone who looks to shakethings up and do things in a new way,” he says. “They aren't alwaysthe most popular leaders with their own staff or the businessstaff. Driving change is hard.”

Josefowicz found it interesting that those who see drivingchange as the biggest way to create value are more interested in“cross-pollinating the IT department with business folks ratherthan focusing on people with an existing, well-understood set oftechnology skills and perspectives,” says Josefowicz.

“Innovation often comes from mixing perspectives,” he adds. “Thepure heads-down coder is rarely going to be the effectiveorganizational leader. It's more a matter of the perspective of theleaders to bring in different perspectives and build better leaderswithin who are going to have the ability to drive change within thebusiness.”