Has the time finally arrived when CIOs should be looking over their shoulders at CDOs and CFOs hungry to snatch digital responsibilities? We look at the history of the role, and what the future holds for the CIO.
The technological revolution we have spoken of so often in recent months has completely changed the way companies conduct their business – whether that be retail firms moving fully online, with e-commerce solutions being heavily adopted, or financial services making the move to web-based platforms. It’s a customer-driven era, and this era is asking for far more from information technology teams all over the globe. The traditional IT culture of sitting and waiting to be asked for a service has long gone. Now, IT teams are fully involved with business processes, value add, and strategic development. What’s more, CIOs are now absolutely critical C-level employees by nature, and not only name.
What this change in business has done, firstly, is put an unexpected amount of pressure on the CIO to deliver top-notch solutions and ideas that wow the CEO, as well as keeping an eye on typical IT processes. Since CEOs are also feeling the pressure of maintaining a cutting-edge service in their respected verticals, many have begun looking elsewhere for increased expertise and innovative ideas that a single CIO may not be able to provide. What does this mean for the CIO?
This is an exciting time for young, up-and-coming C-level hopefuls in IT – a fresh, dynamic and disruptive approach can take you a long way these days. However, for the older school, the responsibility of becoming a key business strategist may be a little too much.
“As far back as the ‘50s, in the era of the mainframe computer, the senior executive with IT responsibility was expected to answer the question, ‘How do we do it?’ rather than, ‘What do we do?’ His main task was simply to deliver reliable IT operations, on time and on budget,” says Mohammed Amin, Senior Vice President, Turkey, Eastern Europe, Africa, and Middle East, EMC.
“The job involved overseeing the integration and maintenance of relatively unsophisticated but complex and expensive hardware, software and telecommunications equipment. It was about employing people who were technologically switched on, in a business which generally wasn’t,” he continues.
But, of course, this role has since changed dramatically. Mikael Hansson, Head of IT, Middle East, Ericsson, outlines this evolution.
“In the late ‘80s and early ‘90s, the Enterprise Resource Planning (ERP) systems entering into the marketplace forced companies to take a more holistic view on their business processes. It is no longer acceptable to have an accounting unit developing their own applications in isolation from the logistic units and their tools. Now, companies need someone who can manage to pull this together across all of the main processes. This has changed what is required from a CIO. Earlier, you could have a technocrat as CIO, but now you need to look for someone that primarily understands the processes in addition to understanding the technology.”
Biswajeet Mahapatra, Research Director, Gartner, adds, “The CIO – a title still sometimes jokingly said to stand for ‘career is over’ – has actually become a critical enterprise resource, and the role has grown into an exciting career. CIOs have the rare opportunity to gain deep understanding of the business and then use that knowledge to innovate. Those CIOs lucky enough to fill this role are limited only by their abilities and by the enterprise vision of technology’s potential. What makes the role even more exciting today is that it can serve as a precursor to other C-level positions.”
The shift in business leadership, in regards to decision makers and strategic developers, has opened the door for CIOs to become more involved with the outcome of critical business transactions than they ever were before.
“The CIOs and the IT team are no longer isolated from business and operations: CIOs are now learning to drive real-time decisions that are critical to the success of businesses. Today, most CIOs will have plans that include business intelligent and mobility solutions, and both support the strategic business decisions,” says Rola Al-Satari, Accreditation, Quality and Communications Manager, ITQAN.
The new skill set
Since the advent of next-generation technologies and an increased need for the CIO to provide business insight, the skill set required from this role has broadened significantly. Essentially, the role of CIO has now become a completely different role to what it was just a decade ago, the experts say.
“In addition to being technologically sound, a CIO needs to have distinct business acumen and an in-depth understanding of the unique business challenges and how technology affects a company’s bottom line. Since organisations today operate in a ‘state of flux’ with increasing competition and demanding customers, CIOs need to be flexible in their thinking and be able to act fast and on their feet,” says EMC’s Amin.
Mahapatra, Gartner, adds, “CIOs have had to transform themselves from being purely technology leaders to being business leaders – this is a big change. It requires a solid understanding of financial management, the industry and its processes. It requires the CIO to become aware of forces and trends in the external environment that may have little to do with technology per se, but that might have a significant impact on the business. Acquiring this knowledge and these abilities is largely through training and experience, including participation in key enterprise decision forums and strategic conversations.”
Of course, the issue here is that if today’s CIO cannot reach these requirements then someone else will. This is becoming a major concern for CIOs who are seeing an increased number of CDOs (Chief Digital Officers) coming into business. This is a new breed of C-level employee that is significantly more versed with business processes as well as information technology.
With this is mind, the CIO role appears to be becoming some kind of battle – a battle that involves fending off serious competition from its basic duties and responsibilities. But those responsibilities continue to increase with gusto, and show no sign of slowing up. As more and more opportunities for business growth arise from technological advances, more and more expectations are seen from the top C-level executives towards CIOs.
“The CIO role is evolving and becoming more critical for the success of businesses. While interacting with many CIOs, I can see that they have always been under pressure. However I believe with all these evolving technologies (like social media, cloud computing, big data and mobility), the pressure will be even greater and they will be expected to deliver more with less,” explains Al-Satari, ITQAN.
Mahapatra believes that becoming more productive and profitable will put them in a strong position to continue leading in their role.
“CIOs need to build in the culture of calculating and demonstrating the value they are adding to the business, both at the strategic and operational level. At the strategic level, they need to work with CFOs to derive their contribution to profits and revenue, which will help them calculate ROI in IT. At the operational level, they need to demonstrate what real-time value they have added on the ground with respect of savings in cost, time and effort.”
CIOs typically make their way to the top of their IT organisation because they’re good at managing risk, adapting to shifting industry patterns and developing critical business models. These attributes will all be crucial for CIOs in the coming years, when CEOs look to take advantage of business-driving IT solutions. The CIO that can continue to proactively provide solutions and innovations for the business will be the one that maintains responsibility of the top role. The rest may simply find themselves lost at sea.