Over the past 30 years, the role of the Chief Information Officer (CIO) has changed significantly.
Once seen as the geeks who were the custodians of IT and a backroom cost centre, CIOs are now at the forefront of driving digital transformation. But some are going a step further and disrupting entire industries.
Becoming a digital business
Most multinational organizations are undergoing a transformation. In fact, transformation is no longer simply a nice to do – it’s essential for future growth. To take advantage of the Fourth Industrial Revolution, they need to become digital enterprises, rethinking every aspect of their businesses. According to McKinsey, more than eight in ten respondents say their organizations have undertaken such efforts in the past five years.
Once an enabler of that transformation, technology is now at its very core, driving digital business success. Think of the FAANG (Facebook, Amazon, Apple, Netflix and Google) companies who epitomize digital success. They’re continuously evolving themselves, exploiting data and artificial intelligence to create new business models – moving, for example, from being a search engine provider to building driverless cars.
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CIOs of large organizations aren’t just thinking about the next IT upgrade or how to cut operational costs: they are changing business models, improving customer experience, influencing product development and shifting cultures. How do I know? Because that’s what I’m doing and so are my peers. Transformation is no longer about achieving a simpler IT estate or to cut costs. Transformation is about growth, about having the right architecture for the future. It’s about rethinking your business with your customers at the forefront. About being prepared for a new age of competitors, many of whom we’ve not seen yet.
This means CIOs are best placed to help transform organizations for the future. All eyes are on them.
On the board, it’s often only the CIO who has a cross-departmental view. They are the ones procuring, integrating and supporting the specialist systems the others rely on – from the marketing automation platform to the finance system and the inventory management system. They are the ones with the skills, insight and expertise that can help an organization navigate through an era of unprecedented digital transformation. They bring together technology and business strategy, enabling organizations to leverage technology to streamline operations and create a competitive advantage for the company by spotting opportunities.
From transformation to disruption
It’s one thing to transform an organization – another to disrupt an industry. Amazon transformed selling books, Expedia transformed travel agencies, LinkedIn transformed recruitment and of course Uber and AirBnb transformed the taxi and hotel industries.
The CIOs who do this face new challenges. Their partner ecosystem may not be able to deliver the services and solutions they need. They are building new business models in emergent markets. They have to identify where the value is – both for themselves and for customers. And they may need to service their customers in a new way. This can have a profound impact on everything from the underlying IT architecture of an organization right through to how customers experience their products and services.
Leading the way
Increasingly, CIOs are being recognised for their strategic value, with a 74% increase in the number of CIOs on Fortune 100 boards between 2015 and 2017.
But what does a CIO need to do to ensure they are ready to lead transformation or disrupt industry?
In my view, the most important skills CIOs need are leadership, empathy, strategic vision and communication. Yes they have to understand the technology that’s relevant for their industry, but a CIO can engage people in the business and motivate them about how technology can add value to the organization and to them personally but aligning technology change to the business goals.
Industry analyst firm, Gartner, predicts that by 2021, CIOs will be as responsible for culture change as chief HR officers. They are already driving their organizations’ digital agendas, building cross-functional teams, keeping people engaged and creating an innovation culture.
As CIOs move from their historic roles to lead their businesses to become digital enterprises, they have the opportunity to step up and rewrite their job descriptions and help the business evolve, focusing on external rather than internal customers. Next job: CEO?