The CIO's role in business transformation – Five key steps

A business transformation involves significant changes to areas including business processes, core systems, channels, products, and services. Because of increased dependency on technology and the fact that IT enables most, if not all, of the core business processes, CIOs play a critical role in these transformations.

In a recent survey, nearly 30% of respondents stated that the CIO was the most important senior leader in driving or supporting a business transformation. This was a higher percentage than any other senior leader including the CEO! One consequence of this is that even CIOs who are out of the decision-making loop can elevate their role by participating in a business transformation.

CIOs and business transformation

But what should the CIO's role be? Our research shows that there are different types of CIOs based on their role in the transformation. These types vary in their degree of both transformation leadership and business involvement. Each CIO must understand his base of influence and the tactics that will be effective for that role. There are CIOs who focus on implementation (soldiers), balance IT and enterprise needs (leaders),  advise on the business transformation process (change consultants), or run the business transformation (transformation leaders). No CIO is purely of one type; each is a combination that will vary with the phase of the transformation and the attributes of the CIO.

In addition to the type of CIO, understanding the CIO's role in a business transformation requires understanding the activities that span a business transformation. Using KPMG’s Value Delivery Framework to illustrate, there are five steps in a business transformation, and each expect a different contribution from the CIO:

Step 1 — Strategy: Focus on defining the end state and the activities to get there

The primary activities of this step are developing a vision for the organization, providing an organising framework for transformational activities, documenting stakeholder requirements and key performance indicators, and identifying the activities that realize value.

The role of the CIO in the strategy phase is to help define the business y and supporting IT strategies; drive planning processes for scenarios, visioning, etc.; bring in system capabilities very early; and verify the viability of the strategy.

Step 2 — Road map: Define a course of action to implement the new operating model

According to KPMG, the road map "builds upon the strategy; lays out how the organisation would need to be reconfigured to deliver the vision, strategy, and value; and sets out a course of action to implement the new operating model."

The role of the CIO in the road map phase entails owning the road map itself; helping define the business road map; defining and guiding the process required to create the road map; identifying high-risk problem areas in IT components of business plans; and defining the underlying IT components of the road map.

Step 3 — Design: Create a detailed end state and a plan for getting there

Related:

According to KPMG, the design step "captures the key requirements and defines both the detailed business and IT architectures. Furthermore, it develops program and implementation plans that together support the controlled implementation of the changes that will deliver the new TOM."

The role of the CIO in the design phase is to drive designs toward enterprise goals, establish mechanisms to control demand, and ensure that technology components are robust and realistic.

Step 4 — Implement: Execute the process, system, and other changes

During this step, the firm executes the transformation. Key elements include business process change, system deployment, the monitoring of key performance indicators, and behavioural change management. The implementation typically happens in stages and may require an office of transformation for oversight and coordination.

The role of the CIO in the implementation phase involves monitoring progress against milestones and adjusting as needed; showing how others have gone through the transformation and predicting problems; and focusing on the technical details, especially data and testing (see Figure 16).

Step 5 — Monitor: Measure the value and plan improvements

The activities in this step are largely the same as those of an organization that did not go through a transformation. Key elements of this phase include stabilisation of the new systems and processes, capture and analysis of value metrics, and design and implementation of continuous improvement programs.

CIOs in this phase are largely running IT as they normally would. The only transformation-specific activities are in measuring the value of the transformation and starting continuous improvement programs.
Use the transformation to increase your influence with the business.

The now familiar Rahm Emanuel quote "You never want a serious crisis to go to waste" applies to a business transformation. CIOs involved in these transformations have advantages that didn't exist 10 years ago. The disruptive nature of technology places a premium on those who understand its possibilities and limitations.

To take advantage of this, CIOs need to exploit their knowledge of enterprise business processes and supporting systems, and to explain technology possibilities and liabilities early and often. Finally, CIOs need to be the senior expert in the mechanics of enterprise transformation — use culture change as a bonus.

Marc Cecere is a vice president and principal analyst at Forrester Research where he serves the information needs of CIOs.