I recently gave a keynote speech at an IT vendor conference at Gleneagles. The brief for my presentation was to explain to the audience of CEOs and other senior executives from a cross section of the technology vendor community how digital is changing the CIO role and what this means for IT vendors in terms of who they should be selling to and how.
I gave my presentation the title The Digital CIO – fact or fiction? to highlight the fact that while the role is changing, or perhaps more accurately needs to change, it did not necessarily follow that all CIOs were now Digital CIOs. Now it's worth pointing out here that I do not particularly like the phrase "Digital CIO" but decided to use it in my speech as a means of distinguishing between the old and new style of technology leader. I am certainly not advocating a change in job title or the need for organisations to have two types of CIO – something that a particular industry analyst would no doubt refer to as bimodal CIOs!
It struck me that much of the presentation is relevant to CIOs as well to the vendors that are trying to sell to them. So I have summarised the CIO relevant content under the three headings that I used to structure my speech.
The best of times, the worst of times
Technology has never been so important, so strategic and so fundamental to business at it is in the digital age. This should, therefore, be a great time to work in IT. Yet we frequently see headlines about the growth of shadow IT, IT departments being bypassed by other functions who prefer to deal directly with vendors and the CIO role being downgraded or disappearing altogether. So what should be a golden age for the CIO and the IT function is actually proving to be a very challenging time.
The problem? IT got left behind. The digital business has to be agile; it needs to be able to respond quickly to changing market conditions, customer preferences and competitor activity. But the traditional IT function is not set up to be agile; it is weighed down by the baggage it has collected over the past 20-30 years when technologies such as social, mobile and cloud did not even exist and when the rest of the business had different needs and expectations of its IT team.
A survey by Accenture demonstrates the challenges being faced by IT – one of the key findings is that an increasing number of CMOs would prefer to bypass their IT function and deal directly with vendors. A point that was highlighted perfectly by the previous speaker – a CMO from a large vendor – who told the audience how he was using a number of cloud-based solutions that he had acquired directly from vendors, as he could not afford to "wait nine months for IT to do something".
This may be good for the vendor community, I told the audience, but it is not good for their customers as it will create integration problems and data silos, expose them to potential security and privacy risks, and the resulting patchwork of un-integrated solutions will eventually reduce their ability to respond quickly to changes in their markets.
The conclusion of this section was that, to survive the disruption it is facing, IT needs to reinvent itself. IT needs a new model and a new type of CIO. And cue a shameless plug for my book, Disrupt IT!
Meet the digital CIO
Part of the new model for IT is a new type of CIO, one that is a business leader first who sets the overall direction for technology and who shapes and guides technology investment. But they are not the technology gatekeeper anymore. We already know that the amount technology expenditure outside of IT is growing and will continue to do so as organisations invest in digital initiatives. The CIO no longer has the power to just say no. They have to influence, shape and guide the investments made by other executives to ensure the result is an integrated, secure and robust platform. Some people have interpreted this development as a diminishing of the CIO role. For traditional CIOs this may be the case, but for the digital CIO it actually makes the role more important. Who else is the CEO, CFO et al going to turn to for assurance that the business is making the right technology investments?
The Digital CIO has a new focus. They are outward looking, focused on what is coming next and how the organisation can use technology to generate revenue, create new products and services, and enhance the customer experience.
Not surprisingly, with such a change in the role and focus of the CIO, comes the need for different skills and experience and a new approach to the role. The Digital CIO is not a technical role per se it is more about understanding what technology is available and how it can be used to create value for the organisation. The Digital CIO needs to have spent time outside of the IT function delivering a P&L and winning and retaining customers, and they need to be spending an increasing amount of their time outside the IT function with stakeholders across the rest of the business and with customer, partners and suppliers; the Digital CIO is a far more social animal.
It follows therefore that the Digital CIO needs business and commercial skills, they need to be good at influencing and collaborating with their colleagues and they have to be strong communicators and networkers.
But does the digital CIO actually exist?
Digital CIOs do exist but they are currently in a minority. Based on my experience working as an adviser to CIOs and through being a member of the CIO 100 judging panel I estimate that around 20% of CIOs are either already Digital CIOs or are well on the way to becoming a Digital CIO. I fully expect (or perhaps that should be hope) to see evidence that these numbers are increasing when we start the judging process for 2015 CIO 100 over the next few months.
Spotting a Digital CIO, I told the audience at the vendor conference, was a relatively easy task as their style, approach and focus was so different from the traditional CIO. The Digital CIO would want to know how a product or service could create value for their business and would be less interested in technical details and specifications. They would want an ongoing dialogue and relationship with their suppliers and less focus on pure selling. Engage with a Digital CIO in the right way, take part in an ongoing conversation and talk in terms of business value and business outcomes and the money will follow, was my advice to the vendor community.
And, as much as it pained me to say this, I also advised the vendors that, if a customer did not have a Digital CIO, then they should target the executives that were engaged with digital, as this was where the growth in expenditure would come from in the future. This advice should also serve as a warning to CIOs that are not engaged with digital: you will be bypassed and your role will be diminished as a result.
So are you a Digital CIO? Do you have the experience, skills and approach required to shape, influence and guide your organisation's technology investments for digital? And, if not, what is your plan for acquiring them?