Few businesses have been untouched by technology. From how to order a takeaway to how we book a doctor’s appointment or keep track of sales leads, the digitisation of business has led to the creation of new job roles and business models, and the evolution of others.
Ovum predicts the second digital revolution will occur in the next ten years, which will be driven by digital advancements through automation. Today, 38% of the Technology spend by companies is outside of the IT Organisation, Chief Information Officers (CIOs) are faced with new opportunities to grasp and new challenges to overcome. It is now the time for CIO’s to rethink their role.
Re defining the CIO role
To understand how the CIO role is changing, we must first understand what the CIO role looks like today. At one end of the spectrum we have the traditional CIO, who reports to the CFO and views IT as a support function. CIOs who treat IT as a cost centre, face the reality of being left behind if they do not adapt their approach. They struggle with more 75% of their budget dedicated to run IT, and are under the pressure of heavy cost reduction ( >10% per year) .
CIOs who treat IT as a cost centre, face the reality of being left behind if they do not adapt their approach
At the other end of the spectrum, we have the Innovative CIO. With a seat on the board, and a clear vision for the business, this CIO is more like a corporate CTO. They’re typically tech savvy and view leveraging the right technology as an opportunity to innovate, to generate revenue, and to grow business. Most of the time, they have outsourced most, if not all of their delivery capabilities and their current contracts prevent from any strategic agility to activate their plan at corporate level.
To match the gaps, we’re seeing new roles created by businesses that fear they aren’t innovating fast enough. One such role is the Chief Digital Officer (CDO) role, which brings together the disciplines of IT and marketing. Gartner predicts that 25% of organisations will employ a CDO in 2015. But isn’t this position, a way for the board to create the necessary tension in the organization to shift to the Digital Economy?
Where are the opportunities for CIOs?
As we architect our digital future, businesses need to ensure the performance, integrity, efficiency and agility of their digital services are world-class. Digital Enterprise Management (DEM) is an approach to the management of digital services, infrastructure, processes and policy comprising a set of ground-breaking best practices and best-in-class software solutions to support continuous innovation in the digital enterprise.
The fact digital transformation spans the entire organisation means it requires business to rethink their whole business model. Digital business isn’t just about replacing the old with the new, it is about harnessing technology to enhance every aspect of an organisation, reshaping and redefining businesses from the ground up. With DEM, IT can become the corporate service broker, establishing a new digital value chain between digital service providers and customers. With DEM, the R&D can accelerate to new type of product lifecycle with Continuous Delivery and IT to become the platform for innovation.
To become this leader for innovation throughout the entire organisation. CIO’s have to develop a strategic plan with a well defined Digital Transformation journey, along with the Business Model evolution led by the CEO. The portfolio of Digital Initiatives can be tight with new revenue streams, improve the work environment (in and out of the office) and the productivity of staff, while revolutionising the experience of customers. It sets the platform for Internet of Thing application, including Big Data and Artificial Intelligence.
What challenges stand in the CIOs way?
Getting started can often be the biggest barrier to digitisation; with an almost limitless number of places to begin a digital transformation, picking an effective set of foundational projects is not without risk. This challenge is compounded by having to maintain operational integrity of the systems already in place. As every CIO knows, keeping critical IT systems running can be difficult and time consuming enough, without the added pressure of trying to innovate at the same time. Rationalising the application portfolio, defining a new Enterprise architecture embracing the systems of record and engagement, automating the IT process on a clear set of governance policies, securing the management vulnerabilities and intrusions should come on the top of the list when building the work plan for the next 24 months.
One of the most consistently valuable places to start is in ensuring that the IT organisation itself remains relevant, accessible and the easiest to do business with. CIO’s must create a more user friendly and intuitive experience for business users. Workers today expect IT services to be every bit as good or better than the services they could consume outside the organisation. In this environment, CIOs must make the process of selecting and engaging with third party technology suppliers as easy as finding and purchasing apps on the app store, for example.
Realising this vision requires a gear-shift in how CIOs approach IT management. More than ever before CIO’s will have to demonstrate an entrepreneurial spirit, vision, ambition, courage.
His ability to empower his team, and hire new talents, new skills, will drive him to define new roles and organisation, more mobile, flexible, project base, harnessing outside-in / inside-out perspectives on new use cases.
Fortunately, many ‘new’ CIOs have recognised this and are already reaping the rewards of adopting a modern, digital approach to IT.