Keeping up with the relentless pace of technology advancement has become one of the top challenges for organizations as they seek to modernize and adapt to today's digital marketplaces. Perhaps foremost on the hot seat these days is the Chief Information Officer (CIO). That IT leadership role has been under growing tension between two implacable forces: 1) applying the latest technology innovations to the business and 2) maintaining infrastructure and keeping existing IT systems running smoothly.
The argument has long been made that the top technology leader in most enterprises has a fundamental conflict between keeping the lights on and pushing the business towards more comprehensive digital transformation. The lines of business in most enterprises, for their part, seem less and less content to wait for the CIO to take a more proactive role.
In fact, these days it's often regional departments and far-flung divisions that are shifting companies into fast-moving and vital areas like market-facing mobile applications, cross-channel CRM, digital marketing, open APIs, online communities, and other high-visibility emerging business technologies. CIOs seem content to take on areas closer to their core competencies in large, centralized systems such as big data, ERP upgrades, and cloud/virtualization.
The data tells a similar story, with a new Forrester study noting that in a major demographic shift, a minority of IT projects will be led by the IT department for the average firm for the first time in history by next year.
So what's a CIO to do in a post-digital era where the forces of consumerization and pervasive digital technology puts virtually everyone in charge of the IT department? Certainly, the discussion was ongoing throughout last year that it was high time for a C-level role whose full-time job is to think about and realize the strategic digital opportunities of the enterprise. The putative Chief Digital Officer (CDO) is now frequently cited as the role that may break the logjam of competing technology priorities of today's increasingly torn and conflicted CIOs.
Data is still a little sparse on the rise of the CDO but it indeed seems to be arriving. I counted over 240 of them last year and Gartner recently uncovered about 500 people filling the role today, with about 6% of large organizations currently having such a role.
But for most organizations, the CIO is still the top leader with by far the most resources to realize technology deeply and widely across the business. For many -- perhaps even most -- organizations, the CIO is also the most respected, proven, and effective resource for realizing large, complex IT projects, which are famously fraught with high failure rates the larger they get.
DIGITAL EVERYWHERE, BUT LARGELY TACTICAL
Yet businesses are increasingly urged to apply digital innovation directly to their products, the way they operate, to their business models, and increasingly all three. McKinsey's latest global survey on digital business shows that traditional organizations are increasingly positioning themselves to make such transformation, but "at best, their companies are one-quarter of the way toward realizing the end-state vision for their digital programs." I would venture that with the current pace of tech change, that is a fairly optimistic estimate of progress.
The news for CIOs isn't all gloomy: CEOs are increasingly likely to sponsor digital transformation programs, with 31% personally backing them last year, compared to a palty 23% the year before according to the aforementioned survey. Such sponsorship is more likely to produce the kind of needed change and to do it faster, and thus increase the chances of success.
But this still ignores the elephant in the room: Most enterprise technology appears to be moving outside of central IT control, with some estimates claiming that 90% of IT will be outside of the purview of the CIO by the end of the decade.
If anything like this number is the case, how then can the CIO exert the necessary changes across the organization to build a more digitally-aligned business?
Not doing so cuts the traditional organization off from the latest business/operating models,economic advances , and the very source of sustainability that will carry it forward into the future as a useful entity to its customer, workers, and shareholders.
Related: Research: CIOs and the 'digitalization' of business
Therefore I believe there is a mandate for the most powerful technology leader in our organizations to point the way forward for our organizations, even in the presence of a growing host of tough executive competitors such as the emerging CDO or the Chief Marketing Officer (CMO), the latter which was famously projected recently to have a greater tech budget than the CIO within the next couple of years.
Given my conversations with CIOs over the last year, I believe a picture is starting to emerge on what it will take for them to empower, enable, and reshape their organizations to be far better aligned to today's digital marketplaces and channels. For instance, we have growing number of compelling examples of traditional organizations hopping the chasm between digital natives and their industry age corporate forebears. For example fellow Enterprise Irregular, Vinnie Mirchandani, has been tracking many such examples of corporate digital innovation over the last few years. His examples are the bright spots that prove corporations can find the path forward if they have the willpower to change enough of their existing corporate structures and processes.
From these examples, I think a specific type of enabling mindset is becoming the mandate the CIOs can use -- and in some leading cases have already started employing -- to wield their influence and resources to drive a much higher rate of digital innovation and transformation across their organizations and customer/partner ecosystems.
FIVE ELEMENTS OF THE NEW CIO MANDATE
At the CIO track of the recent ASAE Technology Conference in Washington, DC last December, I presented what I believed was a synthesis of these trends into actionable approaches to increase technology metabolism and drive concrete results in digital transformation:
- Lead the business from the front. The CIO should have -- or should quickly ascertain -- a better sense of how to translate the current business into today's emerging digital marketplaces and channels. And yes, that means knowing more about how to apply digital to the various parts of the enterprise than line of business executives. Relentless education and experimentation is required here to be successful. The CIO should be the visionary and evangelist that can get the business -- from the management team to the workforce -- fully on board with digital business.
- Re-invent the business for next-generation digital. The challenge of today's technology cycles is that building on the current technology trends of today means you'll be outdated by the time you realize them in a large organization. Aim 2-4 years ahead. As importantly, do not literally translate the old business, or even old digital, to new digital channels. Instead, use the intrinsic powers of the latest digital channels (social, mobile , etc.) to transform business and operating models.
- Create new and highly engaging digital workplace , customer , and business partner experiences. Virtually all touchpoints across our enterprises to all stakeholders are aging poorly and need better integration and updating to modern levels of service. Again, the consumer tech world is setting the standard for ease-of-use, new models for engagement, value creation, and better ways of working.
- Enable emergent, decentralized tech change in the organization. I've cited this as one of the ten ways that IT departments can greatly scale up their ability to absorb tech change and drive richer, far more numerous outcomes.
- Don't constrain IT, fundamentally empower. Our workers and customers have new IT departments that give them just about anything they want for virtually free. I'm talking about things like app stores. In the face of such enormous choice to internal customers, the trends of consumerization, BYOD, BYOA, and ultimately BYOT are pushing internal IT departments increasingly into maintaining primarily core IT. But it doesn't have to be that way, CIOs can be the source of such IT diversity and wide range of solutions, from creating curated internal app stores to enlist existing online communities in scale to solve business problems that couldn't be solved otherwise, as just two examples. The days of IT being "Dr. No" are long gone already. Now it's about pervasive and proactive IT enablement across the organization.
I've been exploring for a while now the many new realities of the CIO and the rest of the organization. It's clear that times are changing but our abilities to individually react seem inadequate to deal with the current -- and growing -- rate of tech evolution. The good news is that the key to unlocking our ability to adapt is in literally getting much more of the organization involved in digital business. There is a strong case to be made that IT consumerization has demonstrated that this is already happening. Now we know CIOs can and should cultivate and choreograph it.
Jul 28, 2015