© iStock/VallarieE
© iStock/VallarieE

Forrester believes 2019 will be the year that digital transformation goes pragmatic, with CIOs taking the reins in turning innovation into real business value.

CIOs will be responsible for building the tech foundations that offer the speed and flexibility necessary for continuous innovation and a customer-obsessed IT operating model.

"CIOs will be held accountable for leading measured innovation that delivers results," Forrester research directors Pascal Matzke and Matthew Guarini explain in the firm's Predictions 2019: CIO report.

"Key success metrics will shift to how tech increases revenue, drives agility, and sustains changing business models. Expect leading CIOs to prioritise innovations with direct paths to revenue and assemble and simplify the myriad Agile and DevOps metrics into a single measure of speed."

First Central Insurance & Technology Group CIO John Davison believes these developments will lead more CIOs to take on responsibilities that have traditionally been under the remit of an operations director.

"In businesses driven and facilitated by technology, the CIO is the executive most likely to have the breadth of knowledge, experience and understanding to be able to deliver the changes necessary for digital business models and to ready the business for the predicted pace of change," Davison tells CIO UK.

"The CIO of the future may very well see their key objectives becoming much less about creating or delivering technological systems, and much more about ensuring the application of technology, change and data across all business processes…maximising the value from the company's people assets as well as their technology and data ones."

Opportunities and risks

Forrester also expects a high-profile failure of a big-budget tech moonshot that destroys a company to provide a warning to CIOs.

"Instead, CIOs will focus on more narrow problems they can solve with combinations of automation software and layers of AI that create real customer value and lead the way for future growth in emerging technology," explain Matzke and Guarini.

Trainline CIO Mark Holt believes an increase in data sharing between key stakeholders and the growing availability of AI development tools will make these combinations more accessible.

Holt is already taking advantage of this, and recently launched a chatbot in the Trainline Android app that uses the same Google toolkit that powers the Google Assistant.

"I think that's a trend that we'll see continuing," he says. "We saw last week Amazon at re:Invent launched a whole bunch of recommender technology that you can just plug and play. A lot of this really complicated tech will go from a place where you need lots and lots of super bright people to understand things like deep learning to a lot more packaged solutions that you can just pick up as software-as-a-service.

"For example, the Amazon capability can just be deployed to your app. I think a lot of people will be picking that up next year involving the way that they use AI in their tech."

Davison expects augmented intelligence to gain traction as consumers and businesses search for greater clarity in decision making than that provided by black box algorithms. In his own industry, this could mean AI calculates a claims reserve for any insurance claim, but human claims handlers can choose whether or not to use it.

"In this subtler way, the technology can 'augment' the claims process," he says. "The principle of creating greater transparency when applying newer technological processes means insurers can help instil trust back into the industry whilst retaining the valuable personal touches necessary to deliver excellent customer service.

"I do expect to see more and more businesses using augmented intelligence in this way to support business functions and encourage human interactions, rather than simply replacing them."

Shifting strategies

Forrester estimates that spending on back-office technology that supports core transactional operations to rise by 5% in 2019 as CIOs splash out on creating the flexible foundations they need support emerging technology projects.

"CIOs must refactor this core, and they need to do it fast," advise Matzke and Guarini. "Some will opt for overhauls to new cloud-based platforms, while others will tap APIs, data lakes, and connected devices to deal with continuous change."

Forrester also expects CIOs to blend their Agile and DevOps skills with product organisations that need more emerging tech and the software product delivery skills to digitise products, services, and operations.

Barclaycard CIO Keith Little believes such changes will produce more resilient and effective solutions.

"I think we'll see continued growth of that engineering-driven thinking that's having a drive to just better quality engineering," he says. "You see that trend industry-wide and it's something we're pushing hard at Barclaycard."

New skills

The skills gap will remain a challenge, but CIOs can help bridge it by rethinking how they struggle their teams.

Trainline CTO Holt expects that organisational structure will come to define tech as much as the product in the coming years.

Holt is a big believer in Conway's Law, which states that "organisations which design systems ... are constrained to produce designs which are copies of the communication structures of these organisations," and constantly experiments with new structures for his tech teams.

He is particularly keen on multi-disciplinary teams, in which designers, developers and analysts all work together in a single squad tasked with a specific OKR (Objectives and Key Results).

"By putting that cross-functional team together you get the innovation and you're also able to sometimes break down the barriers and execute much more quickly," he says.

"You can ship a very small tweak that you believe that you have on the site is going to drive improved engagement, and you can see the results and you can ship the next one, and then the marketing team can put something out on social that starts the uptake. You get that really tight feedback loop that's very important."

These cross-functional teams will be enhanced by the growth of multi-skilled IT staff.

"What will be declining is people who are just specialists in one specific technology," says Holt. "People aren't going to want someone who's super deep in just one thing. Everyone loves the T-shaped people. They have the depth in one thing but they've got the breadth across lots of other things as well."

Changing roles

Forrester also expects an increase in the CIO turnover, with 25% of top-performing firms looking for new CIOs as CEOs increasingly see the need for customer-obsessed, continuous innovation.

If the CIO cannot deliver, there will be a breakdown in the business relationship and the CEO will look to others to lead the tech agenda.

However, effective CIOs will gain even more influential C-level roles at their existing organisations, or find better opportunities elsewhere.

Holt believes the successful ones will be those who are able to engage with the board and think strategically about technology's effect on the business.

"The way that you build your technology either enables or constrains what you can do with it from a business perspective, and I think the ability to think up and down the stack is really important," he says.

"If I also see what can go from a business perspective then I know therefore how we need to tweak our technology organisation and our technology architecture to be able to deliver against that strategy.

"And a lot of the time the strategy is just mood music. A lot of the time it's not explicit, until suddenly it's very explicit. I think the role of the CIO is to be able to interpret that mood music, understand the actual strategy and create an organisation that is capable of delivering that.

"It's not about being the one who comes up with the ideas or decides what's happening. Our job is to work on the organisation - not in the organisation -  to create a tech organisation that's able to do whatever it is that we as a business need to do."