Information Week recently published an article entitled Why CMOs and CFOs will rule above CIOs. The basic thrust of the piece was that as a result of disruptive technologies, financial uncertainty and strategic reviews of business direction, there will be less need for executive level CIOs. Rather CIOs will be relegated to a lower tier of management reporting to the CFO, COO or even the CMO.
This viewpoint is flawed on a number of levels although the article does contain some valid warnings that CIOs should take note of to ensure the sensationalist headline doesn’t become a reality.
But first let’s look at the main headline. Apart from being unnecessarily confrontational the suggestion that the executive functions of the CIO could be subsumed within another C-level role is to misunderstand and grossly undervalue the role of the CIO. In effect it is saying that what a CIO does can easily be done by either the CFO or CMO; that being a CIO doesn’t require specialist knowledge or skills in the same way as the senior finance or marketing roles do. This couldn’t be further from the truth. The CIO has what no other CxO has – a view across the entire business lifecycle and the ability to identify how technology can be used to realise value across this lifecycle.
Technology underpins just about every aspect of the modern organisation and, if applied correctly, can help create competitive advantage. Increasingly businesses are seeing technology-enabled solutions as a source of differentiation in highly competitive markets. These solutions can be a way of delivering new and enhanced products and services, driving business transformation and creating new, game-changing business models. Can this really be achieved by treating technology as a commodity item that is procured by non-technical executives? Can an organisation really develop a successful, technology-enabled strategy without a CIO in the boardroom? Isn’t it more accurate to say that, given that IT can transform business models, the CIO should be helping to define business strategy, and not having it passed down to them by a CFO or CMO?
Conversely, instead of demoting the role of the CIO, disruptive technologies such as cloud, mobile and big data are more likely to increase its importance. Who other than the CIO is better placed to ensure the organisation exploits these technologies to maximise benefit? The CIO role has seen more change in the last five years than any other. CIOs have continuously evolved to embrace new and disruptive technologies. This ability to create and drive change, together with their view across all business functions and processes, means CIOs have a key role to play at the executive level ensuring the organisation also evolves and exploits new technologies.
And yes, it is possible for individual functions to procure their own solutions, particularly if they are cloud-based. But is it advisable? Who ties this potential patchwork of systems together into an overall strategy? Who ensures that the result is an integrated platform and not a set of isolated systems that do not integrate or share data? Who oversees security, resilience and performance of these solutions? Organisations that are serious about using technology to drive transformation or to help create competitive advantage have to have a CIO within the C-suite to ensure there is a co-ordinated approach, that a common set of standards are adopted, that the needs of all functions are met in a way that is consistent with the overall strategy and that processes and data flows are seamless across the enterprise.
So there are many good reasons why the CIO role should increase in importance rather than decrease. But CIOs have to act now to ensure they and their departments are positioned for the challenges that lie ahead. And this is where the warnings come in. The article makes reference to CIOs and IT departments sometimes being seen as “slow and unresponsive”. CIOs need to guard against this but there is a balance to be struck between being quick to respond and maintaining standards and controls to ensure new solutions are secure, scalable and resilient, can be integrated with other solutions, have a clear roadmap, are properly managed and supported, and can be decommissioned or migrated from when they no longer meet business needs, etc. Not surprisingly CMOs and other C-level executives don’t always consider these wider issues when looking for a solution to solve a specific problem. This is part of the CIO role. It’s a difficult task but it has to be done to protect the organisation’s investment but means that CIOs run the risk of being seen as an obstacle when raising valid and important questions that other functions will interpret as blocking.
There are two things the CIO can do to avoid being seen as an obstacle to other departments looking to exploit new solutions. Firstly, communicate; communicate well and often with your C-suite colleagues, their direct reports and their functions. Communication, supported by good relationship management and the ability to influence and collaborate are an essential part of the modern CIO’s skillset. But it can’t stop with the CIO, the ability to communicate has to be something that all IT staff possess. The second action CIOs can take is to position themselves as the organisation’s technology evangelist and the visionary of the organisation who is looking into the future at how new and emerging technology can be applied to improve the bottom line. CIOs need to be the person that is leading the debate with their C-suite colleagues about new solutions instead of following their lead and playing catch-up.
The second warning is that CEOs are expecting to see change within their IT functions over the next few years. IT departments have always needed to evolve to cope with changes in technology but disruptive technologies such as cloud along with the increasing need for agility and cost control means the pressure to change is mounting. CIOs have to act now to define a new model for the IT function and drive the transformation necessary to put it in place. This shouldn’t be seen as a threat, however. The new IT department may be smaller with more services outsourced to partners but this should free-up time and resources to concentrate on the business-focused activities that will add value to the organisation. The new model for IT has to be shaped by the overall business strategy and operating model; this may not be fully defined so there is also an opportunity for the CIO to prompt or even lead these discussions.
The CIO role is changing; it always has been and no doubt always will. It goes with the territory of being the person responsible for technology. But that’s what makes it one of the most challenging and exciting roles in the modern organisation. But it is not diminishing in importance or relevance. The importance of technology to the modern enterprise and its potential to drive business transformation and generate competitive advantage are making the CIO role a key part of the C-suite. But CIOs need to make sure they are business-focused, that they and the IT function are agile and flexible, and that they continue to be ahead of the game in terms of the trends and developments in their field and how these can be leveraged to create value for their organisation. But then isn’t this the same for all C-level roles?