Citing the results of the 2008 study “Digital company 2013”, by the Economist Intelligence Unit, PwC reports that in four years, CIOs will be taking on expanded strategic roles that they are not presently accustomed to being part of. Business and IT governance is still seen as the key role by 61 percent of respondents.
However, other areas of leadership that are predicted to become commonplace for CIOs in the next four years include: customer satisfaction and support, business model innovation, new product development, risk management, and distribution channel strategies (see graph below).
The PwC report entitled 'I for innnovation', cites two forces of change that are set to affect the CIO role. The first is IT becoming a commodity, with the simplification of technologies that used to be challenging. Core technologies are becoming commoditised and can be handled by consultants, contractors or vendors, it states.
The second trend, however, promises more clout and responsibility for CIOs, and for them to deliver more strategic value to the enterprise. "The best CIOs are beginning to act as chief innovation and process officers," the report states. "This is because they’re the only C-suite executives who have to know how the business actually works from one end to the other. This advantage gives them insight and leverage into making the business run better.”
The report further discusses the evolution of the "I' in IT. "In a modern organisation the I stands not just for information, but also for intelligence, innovation, integration, insight, instigation, and influence.
"It also stands for infrastructure, but as something the company specifies and uses as a value-enabling platform, not something it has to own and tinker with directly."
For companies that support expanding the "“I" in IT, the CIO role will be essential.
The CIO’s focus, the report says, "would move up the stack to the value creating differentiating technologies, to the understanding and enablement of value-adding processes, and to the orchestration of technology-enabled processes to provide more value than if they were left in their silos".Paul Nickels, partner business assurance at PwC New Zealand, says the themes covered in the report hold true locally.
He cites local CIOs who now have a broader portfolio of responsibilities that include operations and supply chain management.
Nickels lists some of the questions CIOs will need to be able to answer in view of these trends.
On what CIOs should be doing differently:
• Historically organisations have implemented and managed their own technology infrastructure, is this still the right solution for my organisation?
• Do you have a good understanding of the split of your teams’ time between “keeping the lights on” and “delivery of initiatives”?
• If I do still want to manage the technology infrastructure, is it as standardised as it could be to create a simpler platform?
• Strategic value-add comes through an understanding of business strategy, business objectives, governance, process management and master data management. Does this align with the priorities and KPIs of the CIO?
On areas that can be changed:
• Can we simplify what used to be challenging? Does software as a service and cloud computing offer simpler and cheaper solutions to what used to require expensive, dedicated sets of resources to deliver and manage?
• Understand pain points and create a plan to simplify. As the infrastructure becomes more generic, the CIO has more time to consider the strategic goals of the organisation and assess and develop technologies that differentiate the organisation from a customer-experience perspective.
On the evolution of the CIO role:
• How do I better add strategic value? How can I use the strategic advantage that the CIO knows how the business works from end to end to facilitate innovation and process improvement particularly in customer-facing initiatives?
• For some of the new technologies such as cloud computing, what insight can the CIO bring to correctly align technology infrastructure to the organisation’s strategic objectives through a simpler infrastructure?
• Does the organisation really understand and can it appropriately assess all of the risks associated with outsourcing and transition risk itself? How can the CIO help in providing the transparency in IT risk assessment and management?
• How does the organisation assess and mitigate IT vendor management risk? Are the contractual terms flexible to respond to change in organisational strategic business objectives?
• For the CIO to bring innovation they need expertise in change management, organisational change, governance and risk management, complexity remediation and services and application design. Do I and my team have the necessary skills in these areas of expertise?
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