In some of our earlier posts, we have explained the transformational impact of digitalization and IT technology acceleration in business processes and the impact of managerial decision making. This transformational impact does not only concern IT systems and their use rather it extends to people in the organization who adopt, use and leverage the outcomes of such digitalization. In today’s world, the enterprises are not only redefining the existing positions and roles but they are also introducing new roles like Digital Transformation Managers(DTM) and Digital Innovation Managers(DIM) to cater to the digital transformation. In this context, the role and duties of the Chief Information Officer (CIO), as well the CIO, has been reinvented in 2018. They play a different role and are expected to perform varied activities when compared to their JD from few years ago. In the following paragraphs, we present the main drivers that redefine CIO’s roles and illustrate how these roles have changed over the past couple of years.
CIOs duties are no longer limited to supporting the operations of the enterprise. They are also about delivering value directly to customers. In the digital era, the number and type of customer interactions are proliferating via the digital channels such as mobile access and social media. Hence, CIOs have to deal with customer facing activities and ways for optimizing these customer interactions through ergonomic user interfaces and personalization. Likewise, the CIO’s performance is gauged not only on Key Performance Indicators (KPIs) concerning IT operations, but also based on targets about customer interaction, experience and engagement through digital channels.
IT Department as Profit Center and Business Value Generator
ΙΤ departments are no longer the cost centers that are destined to spend the budget allocated to them in exchange of a pool of support activities. On the contrary, they have to produce tangible business and monetary value for the enterprise by achieving targets associated with cost cutting, sales increase and enablement of new revenue streams. Therefore, CIO’s should not only budget for their activities but also prepare financial and business plans that would contribute to optimized costs, increased sales and business growth. As a part of every new IT project, CIO’s must anticipate and prove the value of the relevant investments for the enterprise. This is about speaking the language of capital budgeting indicators such as NPV (Net Present Value), Payback Period, IRR (Internal Rate of Return) and Return On Investment (ROI). The CIO is the figurehead who will present and discuss these indicators with the CEO, the CFO and other C-level executives.
It’s about Leadership
The future CIO will be characterized by outstanding leadership characteristics. In the past CIOs were defining and executing a number of IT projects acting as followers of market trends or competitor’s activities. Nowadays they are expected to think out of the box and define new projects that will set them apart from competitors. They must also set their own agenda regarding the role of IT in their enterprises and prepare evidence that will convince other executives to adopt and enhance it.
CIO as Innovator
Even though IT infrastructures are gradually becoming a commodity, cutting edge digital technologies provide unprecedented opportunities for innovation in systems and business processes which could create or sustain the competitive advantage. . . Rather than simply replicating or improving what the competitors do, the CIOs are expected to innovate and deploy state of art technologies. This innovation would pave the way for a leading edge over the competitors. To this end, they need in several cases to become the early adopters of emerging technologies such as Artificial Intelligence, BigData, Blockchains and Augmented Reality. Overall, a CIO’s innovation management capacity is nowadays one of his/her most valuable assets and a main source of differentiation from peer CIOs in a given industrial sector.
Outsourcing-led Technology Management
The cloud computing model has introduced a paradigm shift in IT procurement and deployment. In recent years enterprises tend to access cloud infrastructures and applications instead of deploying and expanding on premise data centers. This paradigm shift signals changes in the CIO’s role as well. Instead of managing IT procurements for in-house infrastructures, CIOs have become the technology managers who could the exploit the services offered by third parties based on pay-as-you-go models. Infrastructures, enterprise applications, management and configuration tools are all outsourced to cloud service providers. Moreover, several CIO’s expand the scope of outsourced models to their entire IT operations as means of minimizing risks and optimizing value for money. In practice, this requires a cultural change in CIO’s procurement practices as well.
External vs. Internal Relationships
In previous years, CIOs’ interactions were primarily focused on their relationships with employees and the management of the company, in addition to their frequent collaboration with IT suppliers. This circle of interactions is gradually becoming much broader, as the CIO needs to interact more frequently with customers and innovators in their industry. In the near future, the CIO will become the key person for the communication of innovative products and services and also the link between the enterprise and external communities who offer novel digital technologies.
Mobile and Social
Most IT strategies are currently embracing the capabilities of mobile computing and social media. Digital services must be accessible through mobile channels as a priority over conventional desktop web access. Likewise, advertising and corporate communication through social media content are gradually prevailing over techniques such as search engine optimization. Therefore, future CIOs must be proficient in both mobile-first strategies and social content. While this could be a problem for CIO’s who might not be able to adapt to the speed of mobile computing and social media evolution, it will soon be a prerequisite for a successful IT strategy.
Putting it all together
The above factors drive changes to the role and duties of the future CIO. Hence the CIO needs to possess interdisciplinary skills comprising of both technical and social skills, while being able to adapt and take advantage of opportunities stemming from a constantly changing IT landscape. The spectrum of required skills is indeed very broad, as it includes technological knowledge, business knowledge, innovation management, technology management, as well as various leadership skills. It’s extremely rare for CIOs to combine all these virtues at the same time. However, it’s also important to note that the more of the above skills they have, the better they serve the role, as each one of them reinforces the other. For example, a proven business acumen is a key prerequisite for effective innovation management, while an extrovert CIO tends to be customer-centric as well.
It is usually said that the level of IT importance in an enterprise is reflected based on the positioning of the CIO in the company. A CIO who is the member of the board or a key decision maker represents an organization that prioritizes IT over other business units and activities. In the era of digital transformation, we expect to see the importance of a CIO’s role getting intensified. CIOs who combine the listed skills and undertake the presented role models deserve to be highly appreciated in any enterprise.