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The role of a CIO and how it’s evolving
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The Chief Information Officer (CIO) is the executive in charge of a company’s IT function. They are tasked with defining the technology strategy and overseeing the operations of infrastructure, computing systems and other technology required to support the organization’s unique goals and business objectives. The role of CIO is one of the most challenging executive positions in modern companies. The CIO must understand the technology in use by the company today and where technology trends are going. They must also understand the company’s business strategy and market dynamics in order to advise business leaders on technology investment choices.
Because modern IT environments are complex, yet critical to business operations, the CIO must also take an active role in risk management, security and compliance issues to ensure that technology decisions do not cause the company to become vulnerable to physical, cyber or financial risk. Modern CIOs find themselves spending a considerable amount of time on these issues, both in implementing strategy through policies as well as responding to critical vulnerabilities and major incidents.
The CIO does not manage the IT function alone. They are typically supported by a management team with individuals appointed to oversee various aspects of the company’s technology environment and IT operations. With the diverse nature of modern technology and the complexity involved in keeping everything running smoothly, the CIO relies heavily on their team of IT managers to work together to manage day-to-day operations. Often referred to as the IT leadership team, this group of managers direct the activities of technical staff, make procurement decisions and direct the organization’s technology resources to best align with business needs.
Some companies have two executives appointed to oversee technology matters. Though their job titles may seem to imply redundancy, the role of the Chief Information Officer (CIO) and Chief Technology Officer (CTO) are quite different. The CIO is typically focused on the use of technology to support internal business operations while the CTO is typically concerned with the use of technology in the products and services that the company delivers into the marketplace.
There are two key areas where the CIO and CTO role may overlap, requiring either more clearly defined job charters or collaboration between the technology executives. Those areas are technology usage in the supply chain and technology related to customer engagement (eCommerce, customer support, distribution, etc.).
Supply chain and manufacturing processes in most companies are highly automated and instrumented in order to give the company fine-grain control over the processes and flow of materials that are refined into the products sold to customers. While manufacturing is an internal business process (as is supply chain management), technology decisions in this area can have a large impact on the quality and profitability of the company’s products. The CTO will typically be involved in guiding technology selection decisions related to manufacturing and supply chain while the CIO likely will oversee how the technology is managed and how information gathered from the supply chain process is used in the context of other business processes.
Similar to supply chain processes, most companies have leveraged technologies to modernize their customer engagement experiences. In many instances, the technology is so embedded in the experience of both selling products and services and supporting the customer after the sale, most customers now blend their perceptions of product quality with those of the sales experience. It is for this reason that the CTO is often involved in technology decisions relating to customer engagement – ensuring that the customer experience is consistent between operational processes and the products themselves. CIOs, on the other hand, are concerned with the impact of customer engagement technology on employee productivity and the use of customer information to drive business decisions.
Most modern companies would benefit from both a CIO focused on internal technology use and a separate CTO focused on the use of technology in products, services, and customer experiences. These two roles work best if the executives have a strong and collaborative working relationship and understand where their individual areas of responsibilities overlap and require enhanced collaboration.
The CIO has a diverse set of job responsibilities, both technical and strategic. They are the executive bridge between the IT function and business leaders. At the strategic level, the CIO is responsible for:
1. Creating business value for the company through technology
2. Directing the use of company IT resources to achieve the company’s strategic objectives
3. Ensuring IT systems are managed appropriately to manage cost, risk and enable business agility
The CIO’s strategic responsibilities are no different than any other executive tasked with leading an internal business function (manage the resources under your control to maximize business value). What makes the CIO’s role different from other executives is the scale of dependencies that must be managed in the IT supply chain and the breadth of cross-functional relationships that must be maintained to keep IT aligned with other business functions. At the operational level, the CIO is responsible for:
There is no such thing as an average or typical CIO. Every role is different, and every day is different in the life of a CIO. In addition to planned meetings, conversations and activities, the CIO often plays an important role in managing major incidents – both with the technology systems and with internal IT operations. Some examples of the types of crisis and incidents that a CIO would be involved in include:
Business disrupting system outages
Unplanned business events and changes
Issues with major systems releases/migrations/upgrades
The primary role of the CIO in these situations is impact mitigation, re-allocating resources and managing communications with executives. As the executive in charge of the IT function, the CIO is tasked with managing the crisis and re-assuring all stakeholders that the situation is under control
On average, a CIO spends about 25% of their time working with other executives on issues of corporate and business strategy. They spend about 25% of their time collaborating with business leaders on the role technology will play in supporting business processes. They spend about 30% of their time working with their IT leadership team to direct IT investments and the activities of IT staff. The remaining 20% of the CIO’s time is spent engaging with industry analysts, peers in other companies, customers and other external stakeholders in order to better understand industry trends and new technology developments.
While the CIO is the figurehead of the IT organization, it is the support staff in the “office of the CIO” that enable the executive to be effective. A CIO will typically have a small team of experienced professionals helping him/her manage the various facets of their role. Typical job titles in the office of the CIO include:
Director of Communications
Director of Governance, Risk and Compliance
Executive Assistant to the CIO
Many CIOs also have data analysts that assist them in compiling and summarizing operational data into executive dashboards and reports that are used to help the CIO and other executives understand technology performance, cost, capacity, risk and other operational issues. Data-driven decision making is a critical part of CIO effectiveness. Data analysts within the office of the CIO enable the executive to see what’s going on within their organization (and within the business) – directing their focus to areas in need of attention.
Most CIOs have a technical background, with a degree in fields like Computer Science, Computer Engineering or Information Systems. Many also have advanced degrees such as an MBA or a Masters in Computer Science. In addition to technical education, most CIOs also have 20-30 years’ experience in the IT field managing various aspects of technology environments. Recently, an increasing number of CIOs have been appointed with experience in Information Security and Risk Management – emphasizing the importance companies are placing on this aspect of the CIO’s role.
While the CIO must have enough technical knowledge and experience to understand both current and emerging technology issues, they must also have strong management and executive leadership skills. IT plays a critical strategic role in modern companies and increasingly, the CIO is looked to not only as a technology leader but also a business leader. Management and leadership abilities of a CIO often come down to soft skills – these are what differentiate a competent CIO from a successful CIO
Executive presence and communication
Influence and persuasion
Ability to synthesize large amounts of data and visualize the big picture
Understanding emerging business and technology trends
Projecting the impact of alternatives
Ability to articulate a strategic vision
Ethical decision making
Very few technologists are able to evolve into highly effective CIOs because developing the required soft-skills and leadership experience often requires letting go of the hands-on technical skills that drew them to the IT profession in the first place. Likewise, very few business professionals are able to grasp the technical aspects of the CIO role necessary to effectively manage technical staff.
In the past, the role of the CIO has been focused on effective management of IT infrastructure – where the majority of legacy IT investments were made for the past 30 years. With the transition to cloud services, virtualized IT environments and scalable/secure infrastructure provided by external service providers, the role of the CIO (and the entire IT department) are shifting from managing the technology to managing the use of technology within the business. Trends like digital transformation, consumerization of IT, and the proliferation of cloud-based technologies are leading CIOs to become more astute business advisors – consulting with other executives on how to best apply technologies to solve business problems
The CIO’s role in overseeing internal IT operations activities is also changing. Instead of managing large portfolios of infrastructure and teams of technical staff, companies are shifting to outsourced models (akin to manufacturing supply chain ecosystems) where the IT department’s primary role is to broker services sourced from 3rd parties. This IT ecosystem business model has a big impact on the role that the CIO plays – reducing the personnel and asset management activities and replacing them with supplier relationship management and service assurance activities.
The CIO’s role is also shifting from being focused on technology to being focused on managing the company’s information assets. While IT has always had a dual charter for both information and technology management, technology has been the primary focus for the past 30 years. As technology evolution accelerates, many companies are now viewing hardware and software as disposable resources and information as the durable asset that creates strategic value for the company. CIOs are playing an important role in educating business executives on the expanding importance of information management in driving business productivity and company strategic differentiation.
Over the next 10 years, the digital transformation of business trend will mature and blend into the underlying fabric of operations in most companies. It will be assumed that all business processes are technology enabled and all business professionals are also proficient technology users and digital practitioners. The term “shadow IT” that described business users playing an active role in technology selection and implementation decisions will likely evolve into the new normal. As this happens, the CIO will need to expand the scope of their role from “managing the IT function” to “managing the application of technology and information within the enterprise”. Effectively, the entire company will become part of the IT function.
Machine Learning (ML) and Artificial Intelligence (AI) are also projected to have a disruptive effect on the role of IT over the next decade. The availability, ease of use and cost performance of cloud computing has made ML and AI accessible to organizations of all sizes. Machine Learning is ushering in a new level of task automation and decision support, while Artificial Intelligence is transforming the way humans interact with their technology. The important thing for CIOs to understand about these trends is that both ML and AI have a huge potential but are going through a “learning curve”. For the next 5 years, the focus will be on training the technology to do new things (often referred to as skills).
In a few years, the majority of the skills of current human resources will have already been taught to the machines and the learning curve will begin to taper off. As this happens, the potential for AI/ML disruption to the workforce will become realized as many current job roles will be disrupted by automation. As this happens, the CIO will play a critical role on working with business leaders to determine where ML and AI technology should be applied within the business – taking into account a wide variety of social, ethical, financial and technical considerations.
The trend of IT shifting from being a “design/build/operate shop” to a “broker of services” is less visible than the ML/AI and Digital Transformation trends but will be equally impactful on the IT department and role of the CIO. The service broker business model is already present in most companies (though few recognize it) and is projected to become the primary business model for corporate IT organizations over the next few years as companies embrace 3rd party components in their IT ecosystem. This will require CIOs to re-think the operating models in place within the IT function, including governance and control mechanisms, organizational structures, job roles and investment decisions. Most companies will see their IT staffing levels shrink over the next few years and their outside spending increase proportionately. This will, of course, be disruptive to technology professionals within the IT organization and potentially lead to re-tooling the workforce with a new set of skills.
The digital transformation of business trend has also resulted in an expanded global focus on the ethical use of technology, ownership of data, data privacy and taxation of technology-enabled activities (such as eCommerce). One of the benefits of digitally enhanced business processes is that companies are able to effectively sell into a global marketplace. The downside to this is that these companies are then subject to a complex web of local regulations that make doing business more difficult. CIOs and the IT function play a critical role in managing regulatory compliance for the company and as a result, any changes to regulations are likely to require a timely response from IT. CIOs will increasingly be looking to build agility into their compliance processes over the next few years to mitigate compliance risk.
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