For years, the typical IT department had a vital yet simply defined role — network installation, maintenance, and support — outside the scope of other business units. But with digital transformation driving every industry, the role of IT — and the leadership strategy of the CIO — has evolved from an in-house utility to an integrated business function explicitly tied to the organization’s goals.
According to Deloitte, the CIO has steadily become a business-savvy technologist focusing team resources on driving innovation that melds business priorities and the latest technologies. To better understand this shift, let’s first consider how IT organizations have changed, and then look at the impact these changes will have on businesses in the future.
How Has IT Changed over the Last 5 years?
IT organizations have increasingly become change influencers focused on top-line business revenue rather than solely on business process automation and cost reduction. So as CIOs continue to watch costs, today they also pinpoint ways to generate business value. Over the last several years, CIOs have told me they will no longer execute cost-cutting measures without a tangible business outcome.
To ensure success, collaboration is needed between IT management and the rest of the business. No longer should IT be relegated to a silo isolated from the rest of the business. Today’s CIOs need a strategic seat at the table for business decisions intended to boost employee morale and enable the workforce of the future. They need input on the technology and tools empowering employee engagement.
This means they should commit fewer resources to the “factory” of IT. Because basic infrastructure and functions have been commoditized — and should increasingly be outsourced — IT efforts should instead focus on partnership and innovation of the business.
A great example is cloud adoption. As CTO Stephen diFilipo notes, “Traditional ROI does not apply to cloud solutions. The cloud ecosystem requires a nuanced approach to finances, revenue, and cost. A new model is required.” Today, IT organizations need to allow cloud vendors and other partners to do the heavy lifting unless it’s a task unique to the company.
Meanwhile, CIOs need to support and encourage distributed ownership for business-tool implementation. As companies focus more on revenue-generating and customer-facing tools such as CRM, ownership and implementation of these systems need to transfer to specialists in the business. CIO Paige Francis summarized this evolution: “The challenges faced by anyone failing to embrace this new paradigm would only confirm the urgency of a business partnership with IT.”
Also see: Top Digital Transformation Companies
Do Organizations Need to Adjust their Expectations of IT?
Some organizations stubbornly retain their historical view of IT, but there’s optimism that the pace of digital disruption will dispel territorial attitudes.
Many of the same CIOs who found it difficult for their teams to integrate with the rest of the business were offered opportunities to prove their mettle during COVID-19 — but the seat-of-the-pants strategizing of the past two years is neither reasonable nor sustainable for the future. The increased recognition of the CIO’s role during unprecedented circumstances has been welcome, but organizations need to plan for a more integrated IT role for transformation once processes return to a normal pace.
At the same time, the business needs to fully recognize IT as a transformational partner that not only solves problems, but foresees and mitigates challenges before they arise. As former CIO Tim McBreen says regarding the COVID-19 crisis, “The external business has been ramping up their expectations of IT as it grows into a more competent delivery and service organization that can speak their language and move with them. For this reason, the business expects more today.”
Today’s CIO: Diplomacy and Tech Fluency
With this in mind, what should today’s CIO look like? Running an IT group requires diplomacy, an understanding of the overall business, and technological fluency — not just the ability to make sure the network trains run on time.
CIOs demonstrating business, finance, and leadership skills — as well as the companies hiring them — have thrived. The pace of digital disruption is just too fast to settle for a CIO whose skills lie in just the technology basket.
“Tech wizardry isn’t enough for today’s CIO,” says CIO Carrie Shumaker. “CIOs need to engage in strategy and focus beyond operations.”
Skills and Team Construction of IT team
Likewise, the IT team requires a skill set beyond understanding technology and completing projects — CIOs should hire people who can ideate and execute. DevOps is today’s mantra.
Additionally, the IT team requires soft skills. Of course, technical knowledge and coding experience will always to be important, but leadership, empathy, and critical thinking are critical, too. To embrace diverse hiring practices, IT needs to hire for potential and foster on-the-job training to fill any gaps. Hiring people without traditional IT backgrounds is possible today because there is less infrastructure to run and more low-code, business analysis to execute.
Put together, success today for organizations undergoing digital transformation requires more of the following:
- Contract and vendor management
- Product management
- Data analysis
- Digital marketing
This means the IT organization needs to become more proactive and less reactive, with skills focused on critical analysis more than simply the gathering of requirements.
The Next 5 Years?
CIOs believe IT organizations will be even more business-oriented than they are today. This transition will see smaller staffs but with a larger technology spend. Businesses supported by an IT focused on business analysis, integration, and analytics will be more agile, and IT will be fully distributed and demand little centralized IT oversight.
This smaller IT organization will:
- Be tightly coordinated with the business.
- Outsource most services and technology.
- Concentrate on working with the business to create unique mobile, analytics, and solutions capabilities.
CIOs like Francis have already formed future-oriented IT teams. “The team I built from scratch is small, valued and valuable, expert, and targeted — but able to work across all blurred lines,” she says. “Most important, they’re happy. We’re determined to make this new team a modern pillar of excellence.”
IT organizations of the past were truly responsible for the productivity gains that have occurred over the last 50 years. However, this is no longer an acceptable place for IT organizations. A successful CIO needs to be a business strategist first and – with their team – be able to ideate and drive forward the delivery of new business models.