Are CIOs being squeezed out?

businessman crowded out by tall shadowsCIOs are used to people in other functions having opinions about technology, telling them what software they should be buying or how to implement a new system. Being told by a non-IT manager that they can go online and buy a PC for far less than the IT function is charging their department used to be a regular occurrence for CIOs.

In the past such opinions were often based on a lack of understanding about the complexity of corporate IT. The hardware and software used by companies was far more sophisticated than that used by employees at home and so it was easy for CIOs to deal with such comments by explaining how you cannot compare the organisation’s systems with a home PC, or that being able to unbox and install a printer at home does not qualify someone to talk about enterprise networking, finance systems or firewalls.

But times have changed. The devices and apps people are using in their personal lives are at least as good as the technology being used by organisations. Technology is far more accessible to non-IT staff and their knowledge of what it can do and how, is much better that it used to be.

Consider the following quote:

There is not one technology provider that brings the entire stack together. There are too many best-of-breed providers throughout the stack, and new innovations and providers are entering the market constantly. We must adapt to this changing environment and understand how to optimise our external provider portfolio constantly. In general, we want to minimise customisations unless absolutely necessary to driving our strategy. It increases complexity and cost to do so.

Sounds like something you would expect to hear a CIO saying doesn’t it? But this quote was taken from an interview with Rishi Dave, the CMO of Dun & Bradstreet. Dave also explains the split of responsibility between his function and IT:

My team owns and manages the marketing technology stack. The team works across the business to determine requirements, and establish a run-the-business rhythm with IT. We also manage the production hand-off points that need to occur between building on the software platform (which marketing owns) and integrating into the company’s internal data (which IT owns) and any supporting hardware infrastructure (which IT owns).

Now, Dave may be a more extreme case of CMOs getting more involved in technology but his comments could well be a sign of things to come. We already know that CMOs and other executives are spending more on IT and Gartner is predicting that the share of total technology expenditure for all non-IT functions will rise to more than 50% by 2017. This is a natural consequence of becoming a digital business; technology underpins every aspect of the digital business and without it digital business models, products and services are not possible. So not surprisingly, other functions are holding the budget for the technology that is enabling their digital initiatives. It follows therefore that the executives responsible for these initiatives and for approving the technology investments are going to have to become more knowledgeable about IT as they are now being held directly accountable for IT expenditure.

As a result we now regularly hear CEOs, COOs and other executives talking about technology and using terminology in a way that used to be the preserve of the CIO. This quote is from Frits van Paasschen, CEO of Starwood Hotels & Resorts:

The shift that everybody is seeing from a PC-based search engine transaction view of the world to a mobile-based dialogue, app-based way of relating to brands, fundamentally opens up new possibilities for how we can have direct conversations with individual guests … The next phase of this evolution is clearly wearable technology. How do you go from dialogue to real-time functionality? In a mobile environment people interact with their phones every six or seven minutes, but with wearables, they’re essentially always online and their devices have the potential always to be doing things in real-time for them.

And how about this from Doug McMillon, CEO Walmart:

To move more quickly, we’ve formed @WalmartLabs, an accelerator focused on meeting the global needs of our customers wherever they are – browsing the website, shopping in a store, or using their mobile device. We’ve also hired more than 2,500 engineers, programmers and data scientists, and acquired 15 technology companies in the last three years.

Front cover advertIt is worth noting that none of these executives work for technology companies where one might expect all members of the C-suite to be tech-savvy. They all work for more traditional and long-established organisations but clearly these are also companies that understand that in the digital age all members of the senior team have to be comfortable with technology; there is no room for technophobes in the boardroom of a digital business.

So where does this leave the CIO? Are they being squeezed out of the picture as their colleagues become more aware and knowledgeable about technology, and as they use this newfound expertise to make technology investments from their own budgets? It would be an easy conclusion to draw as many have done in predicting the demise of the CIO role.

But I disagree. Far from being a sign that the CIO role is diminishing in importance, the growth in technology expenditure across the rest of the business makes the CIO even more important and influential. But it is a different type of CIO role, supported by a different type of IT function. Rather than being the gatekeeper of the technology budget and the provider of all technology used by the business, the new type of CIO and IT function act as brokers, providing advice, guidance and access to the technology required by the rest of the business. This new style of CIO and IT function is the central theme of my book, Disrupt IT. In this new role the CIO sets the overall direction for technology in the business and provides the CEO and the rest of the C-suite with insights about what technology is available and what it can do, and assurance that the technology investments proposed by the rest of the business are consistent with the overall platform, architecture and goals of the business.

And if the marketing function, or any other function for that matter, wants to take responsibility for the day-to-day support and development of their “technology stack” then that is one less thing to occupy the time of CIO and IT function. Aligning existing systems and the associated resources with the relevant business function is something I recommend in Disrupt IT. By removing themselves from the day-to-day running of IT services, CIOs can spend time on more strategic issues and the wider development of the organisation.

So far from being squeezed out by their colleagues’ growing knowledge of, and involvement in technology, CIOs have the opportunity to reposition themselves and the IT function to undertake a more strategic and valuable role.

If you are a CIO that wants to create an IT function that can meet the needs of a digital business, or if you need help educating your board or senior team about digital then please contact me or visit my website, axin.co.uk.

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  1. […] than it was in years past.  Ian Cox, author of Disrupt IT, agrees in a recent post titled “Are CIO’s being squeezed?” when he […]

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