Infrastructure Management 

Whither the CIO? The role of IT — and the IT leader — will evolve along two different paths

Why do we spend so much time scrutinizing the role of the CIO?

Why do we spend so much time scrutinizing the role of the CIO?

Much of the reason must rest in the pace of technology change.

With every major computing paradigm that comes along, CEOs tend to worry that their competitors are leveraging technology better than they are.  “We must not have the right kind of CIO!” these CEOs exclaim. “We have an operations person, but we need an innovator!” or “We have a visionary but our operations are inefficient!” or “Our CIO is not technical enough!” or “Our CIO is too technical!”

CA Technologies has just published a study on the Changing Role of IT that is bound to raise even more questions about the role of the CIO. According to the research, more than 70 percent of CIOs are reporting to CEOs, which signals a rise in the strategic significance of IT; yet a mere 14 percent of CIOs see their role as a driver of new business initiatives. Also from the research, many CIOs have finally been able to strike a 50-50 balance between spending on new products versus spending on maintenance; but despite this success in IT investment management, CIOs are giving away their budget: More than 35 percent of IT spending is occurring outside of the IT department.

CIOs it seems, are highly strategic, yet not all that strategic. They are responsible IT investors who cannot be trusted with the IT budget. I’ve said it before and I’ll say it again: CIOs are beset by a baffling array of irreconcilable contradictions.

So, what does all of this contradictory evidence mean for the future of the CIO role, and indeed of IT itself?

Before we answer, we must take note of the fact that every company is becoming a technology company. Retailers are putting all of their eggs in the digital basket, automotive companies are creating a “digital cockpit” for the driver, and manufacturers are becoming providers of data about product usage. With technology becoming as ubiquitous to a company’s operations as finance or … I don’t know … air, we have to say good-bye to the notion of one centralized technology leader.

Technology strategy, spending decisions, and resources must extend out of IT into other business functions. There is no way that one organization can serve all of a company’s technology needs nor can the CIO can be king of all of technology; technology is just too big.

I see the CIO role evolving along two different paths:

Chief Innovation Officer. One group of CIOs will travel on the innovation path. These CIOs will leave IT operations to someone else as they focus on the convergence between engineering, R&D, and software development. They will build organizations populated by entrepreneurial types who look toward data, software, and even business processes for new revenue ideas. They will meet with external customers, forge partnerships with universities, launch innovation labs, acquire technology companies, and lead the charge in getting their business’s executives to focus on the future. These CIOs can create a vision of future products, business models, and customer engagement channels, and they have the credibility to inspire their colleagues to believe them and to follow.

Note: The best of these CIOs will be strong technologists in their own right. It always seems odd to me that “technical” is a dirty word when talking about IT leadership. For years, when I chatted with CIOs, our conversations were rarely about technology. We’d talk about business challenges, cultural change, revenue targets, and the like. But lately, I am hearing more and more of my CIO friends focus on architecture and engineering. Software development and engineering functions are converging as companies try to figure out where IT stops and R&D begins. CIOs who can really flex their technical muscles will have the opportunity not only to add to their companies’ product lines but to architect themselves out of their legacy infrastructure problems, as well.

Chief Shared Services Officer. CIOs that have spent their careers running air-tight operations might just not have the gene for business model innovation. Or maybe they have the gene, but their CEOs do not see them as innovators. All is not lost for this breed of CIO! Having spent their careers managing large operations that deliver a complex array of IT services to tough customers, these CIOs will outsource more and more of IT and free themselves up to manage other business services. Just because IT operations are being commoditized does not mean that “operational CIOs” must be commoditized, as well.

If they play their cards right, CIOs who excel at running IT as a support function, will expand their roles into other shared functions, like legal, procurement, and HR. They might even wind up in the new Chief Business Process Officer role that I am seeing emerge in the executive suite. These CIOs will hand innovation over to those business executives who are clamoring for a piece of the IT budget. But rather than be relegated to an IT services babysitter, these CIOs will take their considerable expertise with business process change, continuous improvement, project management, and vendor management and bring a new era of leadership to their companies. These CIOs will run IT organizations that are largely outsourced; they will populate their organizations with people who have expertise in vendor management and a wide array of business processes.

Technology is turning whole businesses on their heads, and CEOs everywhere are struggling to find the best way to manage and leverage it. It makes sense that as technology increases its impact on businesses, the role of the technology leader will evolve. The notion of CIOs—and their organizations—as being all about operations and all about innovation—at the same time—cannot hold. The key for every CIO working today is this:  Know which path plays to your strengths, and get moving.

Martha is president of Heller Search Associates, a long-term columnist at CIO magazine and author…


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