The future of innovative business lies with the CIO (Chief Information Officer), writes Phil Richards, CSO at the IT security and service management company Ivanti.
Traditional business command structures are changing, and while it used to be the norm, only 14 per cent of Chief Information Officers still report to the CFO according to research from the 2018 CIO 100. Instead, more than half of CIOs now report directly to the top of the food chain – the CEO. This shift represents the change in mind-set towards IT and illustrates that IT is now seen as a proactive business enabler rather than an additional cost to the business. As enterprises are focusing on achieving digital transformation, CEOs are realising how CIOs can help to develop an air-tight business strategy and oversee this shift.
‘Digital transformation’ is a simple term that incapsulates a complex process. In simple terms digital transformation refers to how technology, and other digital services, can change businesses from their core to garner greater levels of innovation, enterprise, productivity and consequently, profit. CIOs are at the centre of this project as they are subject to the inner workings of a company and can use data driven insights to gain an understanding of the operations of the whole business. As a result, they are being given more power and respect within the company hierarchy because they have the unique knowledge of how to drive innovative change.
Despite this newly gained authority and the widespread acknowledgment of the advantages a CIO can provide, research has revealed that CIOs still struggle to transition into the role of the CEO. In fact, they are still only seventh in the CEO leadership contest and only a mere 29% are full board members. This highlights that while many businesses have gone a long way to shift the mind-set regarding a CIO’s position and authority, more needs to be done within the industry for a successful digital transformation to take place.
IT evolution
Opinions of IT are changing and tomorrow’s leaders will no longer see it as a simple ‘fix and replace’ tool but as a key engine for driving change within an enterprise. Research by Korn/Ferry supports this by reporting that over three quarters of CIOs believe their role is viewed more as a revenue generator than a cost centre by the board and CEO. Much of the reason for the shifting role of the CIO is to keep up with the evolution of IT itself. The evolution and future of IT is characterised by over 20 elements, but there are six main drivers that CIOs must invest themselves in to successfully cement their position within their organisation despite the change.
The first three drivers are related to cost optimisation and customer service improvements. IT is going to get faster to accommodate the ‘Amazon mind-set’ that is becoming increasingly common among customers. Consumers have been spoiled by the immediacy of initiatives such as Amazon Prime Now which gives Prime customers the option to get select items delivered within one hour of purchase. In light of these innovations IT must evolve to stand out. This links to the second driver; IT’s ability to give people more power in terms of the self-service possibilities it can offer. Self-service must become an imperative rather than just a ‘nice-to-have’ function. Using a service where they can order, receive live updates and be presented with an action or a resolution almost instantaneously is what it will take to increase customers satisfaction. Lastly on this theme; IT must become available to customers 24/7. In this ‘always on world’ businesses are ever-more dependent on IT to run so it needs to be available at all times.
Automation of IT processes will also enable this department to become successfully supercharged and innovative. However, currently IT is subject to departmental siloes which are hindering the unification of IT operations and automation. Organisations must work from the top-down to implement unification across all departments of IT, including security, for trans-IT processes to occur. As well as this, IT must become more flexible and mobile, despite the implications this may have on security, people and bandwidth. A solution needs to be developed that would allow users to view and work on everything they can in the office while on the move. While this will require the C-suite to rework the organisation structure, the benefits of this action would justify the means. Businesses would benefit from increased efficiency and vision, meaning the CIO would be able to see and manage all IT operations in one place which is good for business and would make reporting back to the CEO easier. Finally, IT teams must develop a greater passion for their customers through a direct relationship and open channel of communication, allowing them to build IT systems around users’ needs.
Traditionally, CIOs have come from a technical background, most commonly from application development, but this is beginning to change. More are coming from software engineering backgrounds which gives them the edge of having the appropriate technical expertise, much like those from application development, but with the added benefit of having more experience of business strategy. If the IT industry continues to shift towards responsibility for business and digital transformation, business know-how will become a requirement of the role. CIOs must work to understand the key business operations such as customer service, sales and marketing in order to be successful in their current role and that of the CEO. This development must not just stop at the CIO but be filtered down through the whole IT team. IT is surrounded by a number of out-dated stereotypes that do not accurately reflect the current industry and CIOs must strive to redevelop and expand their team to make it into an environment that fosters leaders and encourages new forms of IT professionals. This can be achieved by implementing a training system for current staff to continually up-skill the team. This new business focus should not replace a desire for technical expertise; instead the two skills should work collaboratively to produce a more innovative and efficient team.
Companies such as AT&T Business, Tesco, General Electric and The Economist are leading the way by already appointing previous CIOs as CEOs and with more companies implementing digital transformation in the workplace this trajectory will only become more common. However, with a shift in the outlook of the IT team, the CIO must experience a shift in thinking. Their actions must become more strategic in order to lead their team, and the business as a whole, to success. Developments and strategy ideas should continuously be communicated to the CEO and board of directors to cement the value that the CIO brings to the team, as well as re-enforcing the CIO’s suitability to improve and grow the company.
