During the recent Enaxis Leadership Forum at Rice University, one panel of CIOs explored the recent impact of digital focus to their roles. Unlike many trends in technology, digital transformation is often conceived and launched as an externally-focused business strategy to cause or avoid disruption within an industry. While IT has spent many years digitizing the organization and driving efficiency within existing business processes, some industries have not leveraged technology as a core component of their market-facing strategy. Initiatives that focus on customer experience, marketing analytics, data-driven enterprises, or digital products are pushing the limits of IT’s ability to collaborate or lead with the business. Technology is no longer a mere enabler of a strategy. The merging of technology and human engagement is becoming the strategy, driving differentiation. This is familiar territory for tech firms and startups; however, IT departments of traditional asset heavy industries such as oil & gas, airlines, manufacturing, and others have primarily focused on internal process technology enablement. They are finding themselves disconnected from the necessary operating models, development processes, business collaboration, and product lifecycle demands required to support externally focused digital strategies.
IT within these industries are often burdened by complex, highly-integrated, and cost constrained legacy systems. As a result, many organizations are looking toward newly formed innovation teams, external partners, or other leaders to execute their digital strategies. In some cases, this may elevate and transform the CIO role, but it may also redefine the role as an owner of run and maintain operations, disconnected altogether from the digital business strategy. As our CIOs discussed this topic, their opinions and the crowd survey results revealed four potential scenarios for CIOs of the future.
- The Run, Maintain, and Secure CIO: In some cases, CIOs are focusing on a core that is stable, efficient, protected, and ready for integration with digital business initiatives. This allows them to focus on the areas where cost and risk are highest, while allowing the business to take the lead in discovering and leveraging the correct digital strategy. While this model aligns the CIO with the bulk of deployed technology currently in production, it can leave the business to deal with technology challenges with little support. Who are the best partners? How will the technology scale? How can cost be contained? Integration. Scalability. Regulatory compliance. This list goes on and on. When large enterprises tackle new technologies in a silo, they are certain to stumble into pitfalls that many IT groups climbed out of years ago. These organizations increasingly look to the CDO or CTO to take the reins of the digital strategy.
- The Technology Advisory CIO: Many organizations are looking inward to their technology experts to play an advisory role with other executives. The focus on digital is finally bringing the CIO to the table to provide guidance on the impact of externally focused technology strategies. While these CIOs may spend the bulk of their time focused on internal technology, they are increasingly involved in business, sales, and operational strategy discussions to ensure a well-rounded approach to digital strategy. They often bring a pragmatic view to the conversation and can help separate hype from reality. The digital strategy itself is likely owned by a larger group or business executive looking to the CIO for participation and insights.
- The Business/Technology Strategy CIO: In other cases, CIOs are emerging from years of ERP focus and CFO reporting relationships to take their knowledge of business processes, cross-organizational focus, and technology savviness to the executive leadership table. Digital initiatives often impact many teams and systems across the organizations, and IT can act as the connector. Leaders may view the CIO as possessing the right mix of technical, people, and process focus to lead digital transformation. This requires a CIO that understands the business and the market in which it operates. The reporting relationship often changes in this scenario, aligning this role less with cost drivers to focus more on planning and strategic execution. In these situations, CIOs are merging technology strategy and business strategy. The CIOs may change reporting relationships or even find their titles changing to CDO, while delegating their run/maintain operations responsibilities to subordinate roles.
- The Every Executive Should Be A CIO (AKA – no CIO) – Another model emerging is potentially a result of a new generation of executives that often have advanced technology depth, even though they may have never worked in or run an IT organization. IT is becoming less of a centralized or federated model and more of a specialized function within each business, integrating where required. Economy-of-scale focus is losing out to agility focus. This may become the organization of the future, where every P&L owner has the technology skills and market knowledge to align the right technology with the right business strategy. Commodity IT functions are likely performed by external partners and managed via an internal vendor and/or a shared services group. CIOs must become business leaders and business leaders must lead technology innovation. Those who cannot, or will not, lead in both spaces are at risk of being left behind in a digital world. Technology can no longer be relegated to the few on behalf of the many. The role of CIO may shrink over time, but the skills and function of the CIO will certainly expand in every corner of the company. Current CIOs in companies moving this direction may find themselves taking over a P&L function within the business becoming gaining revenue responsibilities for the first time.
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