The traditional role of the chief information officer (CIO) in the past was to lead the team that kept the lights on in the IT department, building the IT strategy, and reporting to the management on how well the IT department was servicing the rest of the organization. With the adoption of cloud and mobile technologies by organizations and the increasing profile of cybersecurity threats, all this began to change.
Advances and improvements in cloud, mobility, big data, analytics, are now paving the way for organizations to rebuild themselves digitally. And along with the organization’s structure being influenced by digital transformation, the role of the CIO is also being rapidly transformed.
The most significant change around the CIO is the definition of how they would create business value, lead the change needed within the business and shift to a transform state whereby the business could capitalise on the benefits of Digital technology forces. Digital transformation has thrown up the pressing requirement for the CIO to act as a change agent across the entire organization. And this change needs to be associated with an enhanced business value for the organization that is reflected through gains in bottom-line metrics.
However, no CIO can fool themselves that an increased business value for the organization is a one-person, executive job. Rather the CIO is now under increased pressure to work collaboratively with all heads of business, to convince them about the need to work collaboratively around technology, while driving enhanced value across the entire organization.
The metrics of this success, now linked to the CIO’s job role, are increasingly being associated with improvements to the organization’s bottom line. In this respect, the CIO is not alone, and joins the ranks of other senior management executives, who head various types of business sales operations. But marks a departure from the past, where the CIO was primarily accountable on the role out of information technology projects and assets inside the IT department, rather than the business benefit accrued by the organization.
On the flip side, traditional parameters around the performance of the IT organization are still in place. The CIO still remains in-charge and accountable for the IT department and the roll out of technology across the organization. But the real basis for their performance is now creating value for the organization and collaborating with the rest of the organization.
The reason for this radical shift is that digital technologies like Internet of Things, cloud, mobility, analytics, have the capability to dramatically transform organizations. They help align businesses with digitally savvy customers, create net new revenue models, and offer huge insight for cost reductions, streamlining of operations, productivity improvements, and opportunities for return on investment. And there is no other executive in the organization better placed to lead this initiative than the CIO.
The challenges for the CIO are therefore less about the complexities of technology, and more about getting business functions integrated into the framework of digital technologies. And it is not a one-way street, where only the CIO rides the wave. Business function heads have to work collaboratively with the CIO to get their teams to adopt and start appreciating the possible gains from digital technologies.
Increased collaboration between the CIO and business heads around digital transformation will provide immediate benefits for the organization as it begins to appreciate the cost benefits of the cloud and new revenue opportunities from customer analytics. In essence the CIO is now essentially responsible for orchestrating the symphony of digital transformation across the organization.
The CIO now needs less, but more broad skilled technology partners, to help manage this organization orchestration. Internal technical and IT skills still remain essential, but the emphasis is more on an understanding of business, ability to work with diverse people and groups, business intelligence, and business analysis. While the IT department typically accounts for 1% of an organization’s staff, it also accounts for 18% of the training budget.
On a final note, CIOs may also find themselves inadequately equipped to manage many of these challenges and will need to quickly adorn additional management feathers to their proverbial Sunday hats. This includes mastering change management, working with people and effective communication, self-improvement and the ability to make decisions.
Rather than dilution of the role of the CIO, digital transformation is hugely enhancing and revitalizing the position. The simplistic reason – for a digital business, technology is in fact the business itself.