I originally wrote this for my column at bMighty.com, and so I am reposting it here because it is an important issue for IT management.

Who do you think holds more sway over a business's strategy and planning -- someone who reports to the CEO or someone who reports to the director of operations? The obvious answer here is the person who reports to the CEO, but in many organizations where IT plays a strategic role, the person in charge of IT isn't part of the leadership team. Historically, IT leaders have often reported to the CFO or whoever is in charge of the financial operations due to the financial area being one of the biggest customers of IT. As a business grows and matures, that may not always be the best choice.

The first part of determining where IT fits on the organizational chart is to examine the role of IT within the business. In a business where IT merely provides employees with computers for e-mail and servers for file storage, it doesn't make sense to have the person in charge of IT reporting to the CEO. The same goes for when IT is focused on providing services internally to improve the basic efficiency of the business's operations. In the former case, IT might report to a person like the lead accountant or an assistant vice president to keep some of the management burden off the higher-level executive management. In the case of the latter, it would make sense for the IT manager to report to the chief operating officer or director of operations.

There are two more columns by me on bMighty.com.

Managing Relationships With End Users
This was based on a previous blog entry with some more details and some things more fleshed out.

3 Ways to Treat IT as a Commodity
I wrote an adaptation (read less academic) of my discussion of Carr's original article for the site. I really do think it's an important distinction for an organization to make. You cannot just decide one day that IT is going to play a strategic role in a company's products and services.