How CIOs Today Are Leading Digital Businesses

CIOs are shifting from traditional to new roles by using innovation strategically.

Every five years or so over the past two decades, a healthy debate arises in the IT trade press about whether CIOs are becoming irrelevant. As the argument goes, CIOs who focus too much on organizational “plumbing”—managing IT infrastructure, overseeing application development and maintenance, and ensuring compliance—will cease to be taken seriously by the C-Suite, and will become little more than organizational furniture. All the fun, strategic stuff will be done by others. So what should CIOs do about this?

These articles usually conclude by warning CIOs to be more business-centric and proactive in communicating the importance of IT to the CEO and the board. Well, sure.

Here we are in mid-2019, and the CIO is more important than ever. Indeed, the debate has shifted dramatically. Rather than asking if CIOs are going to be sidelined, industry observers are marveling at how they’re growing in power. A full 84% of CIOs at top-performing organizations now oversee business units in addition to traditional IT, particularly those involving innovation and digital transformation. 40% are leading their organization’s digital transformations. And a significant number of CIOs today aspire to take over as CEOs eventually.

Indeed, many companies are wondering if the role has expanded to the point where it needs to be splintered off into multiple roles. Chief innovation officer, chief data officer, chief security officer, and chief digital officer jobs are just some of the new titles being advertised for by global enterprises that take over various facets of traditional IT. The inherent assumption behind their creation: IT today is too big and too important to be the responsibility of a single individual.

Yet at the same time, CIOs are being given even more responsibility. According to PwC’s report, The Changing Role of the CIO, CIOs are taking on broader, more strategic roles within the business that do not necessarily involve directly implementing technology. Why? Because CEOs and boards now recognize IT is no longer simply supporting the business. It is the business. Said Sheila Jordan, CIO of Symantec in a recent Wall Street Journal blog: “There isn’t a business strategy today, in any industry, that doesn’t require some element of technology, whether it’s building an app, or providing customer insights in each and every touchpoint in the organization.”

The only ones up to the job

The fact is, CIOs may be the only ones capable of successfully leading organizations on their digital transformation journeys. They possess—or should—the technological vision to see not just what innovations are necessary to deploy now, but how to lay a foundation for the ones that will be critical in the coming months and years. They have insight into the entire organization and all its workings—everything, now, is connected, and everything soon will be digitalized, and the CIO knows where the bodies are buried. And today, they certainly have their heads on straight when it comes to understanding what matters to the business. A plurality of CIOs said their top priority for the coming 12 months was growing the company and increasing market share. These are not your granddaddy’s CIOs.

What CIOs need to do

CIOs themselves seem up for the challenge. A broad range of surveys show that they have enthusiastically adopted a change mindset and are seizing the opportunities in their paths. But they need to keep their eyes on certain developments that will almost certainly make the ride an adventurous one.

Strategize about attracting and managing the future workforce. A third of CIOs plan to replace more than 20% of roles with artificial intelligence (AI) or automation within five years. Although the majority (69%) believe new job roles will compensate for those lost, that means CIOs will need to attract, hire, and nurture a brand new kind of worker—one with the skills and aptitude to work with (and perhaps under) software robots (or “bots”). Given that CIOs are already worried about the scarcity of qualified individuals, this challenge should not be underestimated.

Transform the culture. You thought getting rid of technical debt was hard. Wait until you attempt to prepare the current workforce for what lies ahead. Not just the onslaught of automation and bots, but to acquire the necessary communication, collaboration, creativity, and judgment skills that top organizations believe drive a customer-first organization capable of delivering a stellar customer experience. Indeed, customer experience is fast becoming the single most important competitive differentiator in the digital age, and, when supported by technologies such as the Internet of Things, big data, analytics, machine learning, and edge computing, will determine who thrives and who does not.

Change IT from a cost to a profit center. This may, paradoxically, involve shrinking IT at first through targeted outsourcing. With all the as-a-service offerings on the market today, when does it pay to keep applications or even traditional IT services like help desk operations on premise? CIOs need to think in terms of managing strategic ecosystems of technology that turn actual profits versus merely operating in-house IT shops. For example, by putting a multi-cloud strategy in place, they can optimize performance of individual applications—including customer-facing ones—which in turn has the potential to drive higher returns on IT investments.

And, yes, there’s that business-aptitude thing

Of course, some things never change. Gartner predicts that by 2020, 100% of IT roles will require “intermediate” levels of business acumen. Yes, this makes sense. Few things are more frustrating to a senior manager than a CIO who cannot see the balance sheet for the Excel macros. CIOs indisputably need to develop in-depth understandings of their industries, employees, and customers. That is foundational.

But going beyond that is critical. Today’s CIOs must lead, not follow. They need the same cunning, technical smarts, and business acumen that the new digital upstarts have—the ones that are disrupting so many markets. They need to be creative, and able to think fast on their feet. By forging courageously ahead with digital transformation, CIOs have the opportunity to be the heroes or heroines in these volatile yet exciting times.

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