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CIO upfront: Meet the revenue-generating CIO

CIO upfront: Meet the revenue-generating CIO

The idea of a CIO as cost controller has gone forever, writes Andrew Powell of Rimini Street.

In the past, the pace of technological change was positively glacial. The rise of mobility, cloud and big data has changed all that. Today’s business needs to innovate technologically even if it’s just to stay in pace.

For the longest time, the role of the chief information officer was set in stone. The job was all about keeping the technology “lights” on and, if possible, reducing costs. Today that job description is outdated. In the era of big data, apps and cloud computing, the role of today’s CIO is to enable the business, innovate and focus on new technology strategies to help better engage customers and drive revenue.

The reason the CIO’s role has changed is because technology has changed. In the past, business tech was all about big implementations over a long period of time. The pace of technological change was positively glacial.

The rise of mobility, cloud and big data has changed all that. Today’s business needs to innovate technologically even if it’s just to stay in pace. To truly succeed, business IT needs to have its eye turned to the next big development, the next pace-setting change. And it needs to communicate those changes with the entire organisation. For that reason, the role of the CIO is about technology strategy enabling business strategy, and about understanding how technological change will not only benefit the organisation today, but also into the future.

Underscoring the changing role of the CIO is a recent report from KPMG and Harvey Nash, which surveyed 3,352 CIOs and technology leaders. The report found that over half of chief executives are asking their CIOs to focus more on projects that create revenue rather than saving money on technology. Both the CEO and the board realise that using cutting edge technology imparts a competitive advantage. They understand that if they’re not at the edge of technology, they will be left behind by faster, more nimble and more innovative competitors.

The report also found that 63 per cent of CIOs said making money for their business is now their number one priority, compared to 37 per cent that said saving money was the most important aspect of their roles.

Enterprises using traditional ERP and database software are also finding that they need to complement these core systems with innovative point solutions ‘around the edges’ of their core technology.

Forward-thinking CIOs recognise that there’s a change occurring, and that change is moving from on premise, contract-shackled ERP to something that’s a lot more agile – hybrid IT.

A KPMG and Harvey Nash survey finds over half of CEOs are asking their CIOs to focus more on projects that create revenue rather than saving money on technology.

With hybrid IT, CIOs understand they’re not going to throw the baby out with the bathwater; rather, they’re taking their existing investment in ERP and aligning it with best-of-breed cloud and SaaS software from smaller, faster growing and more innovative companies.

The message that CIOs are getting is that their environments are shifting away from “mandatory evolution,” where enterprise software is upgraded every few years and the company is locked into onerous maintenance contracts just to stay supported. Instead, they are being encouraged to adopt an “innovation agility” strategy where resources are liberated – people, time and money – so that they can focus on meeting the needs of the business and invest in ways that deliver value back to the organisation.

By freeing up funds, for instance, that were spent on their ERP software support and implementing an innovation agility strategy, CIOs are able to focus more on using technology as a tool to create additional revenue streams for the company, help foster growth and provide a competitive advantage over their rivals.

One example that embodies this transformation is the CIO of a large New Zealand retail group.

By switching to a third-party support vendor, the retail group was able to save 50 per cent on its annual support fees. The savings were then reinvested, giving them the opportunity to focus on more innovative programs that will help grow their future retail business.

By optimising their maintenance spend, this NZ retail group has freed up resources and time to focus on areas of strategic importance that will help differentiate their business from the competition.

By changing the conversation from “how to save money” to “how to better reinvest it”, this CIO has put the IT leadership on the front foot of business discussions.

The idea of a CIO as cost controller has gone forever. Now the CIO is the centre of innovation – long live the CIO!

Andrew Powell is managing director of Rimini Street Asia Pacific.

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