Dramatic changes in the business and technology landscape are creating a need to think bigger. It has led to the concept of the 'digital CIO' - a leader far removed from the traditional IT management role.
Amid a corporate world dominated by technology such as cloud, social media and mobile, a digital CIO is one that is leading business - rather than just IT - transformation. Yet only two in 10 (22%) CIOs consider themselves 'digital' today, according to an IDG report in partnership with CSC.
So how can this change be made? One only has to look at Anna Barsby, CIO of retailer Halfords, who in April was named leader of the 2015 CIO 100. Barsby was deemed by the judges to be a digital CIO due to her ability to re-energise a business that looked set to face the same demise as retailers Blockbuster and Woolworths. This required communication and leadership skills that went far beyond her traditional role.
“As Anna Barsby and her peers demonstrate,” says CSC’s Glyn Knaresborough, who advises clients on major digital transformations, “CIOs are now helping to create new business strategies, directly contributing to revenue through their products and services - and are required to communicate this coherently to the board. In addition, CIOs are increasingly facing major disruptions within their sectors, in particular from technology.”
This seismic shift is set to continue. Analyst IDC predicts that in two years, more than 70% of CIOs will move from directly managing IT to becoming an 'innovation partner'.
Becoming an innovation partner
But there is still a long way to go. According to the IDG and CSC survey, only 16% see themselves as an 'innovation partner' today. However, 65% reported that they were already doing this to some extent, with only 6% saying their role had not changed at all.
Being an 'innovation partner', and leading business change through products and services, is integral to becoming a fully digital CIO. This transition is yet to be made by the vast majority of those questioned in the survey. When asked: "Do you consider yourself a ‘digital CIO’ today?", just 22% - about two in 10 - answered "yes".
Yet the foundations are already being laid to make this transition. Important in the CIO's job today, according to the survey, is knowledge of the business (51%), developing a long term strategy (48%) and creating technical teams that understand the business (44%).
As a food industry CIO says: "Soft skills are essential. Ultra technical teams are no longer viable in the current business environment, and less so in the future. We need tech teams with an attitude."
Making the transition
So what other skills and approaches are required to become a digital leader? CIOs questioned in the survey cited the ability to speak with "non-IT people"; strong leadership skills; and partnership working as important as they strive to become a digital CIO.
And in the near term? In two years' time, a digital CIO will need to have made some progress. According to the survey, the top three skills required by this point will be:
- The ability to transform the customer experience (62% of respondents)
- The ability to better articulate how the business can generate revenue through technology (56%)
- Having the ability to 'excite and engage' (49%)
In the longer term, five years' time, skill sets must evolve further, with partnerships rising to the top of the agenda. CIOs questioned in the survey agreed that the next five years are key: 93% said they will be digital within this time.
One insurance industry CIO's comment reflects this. He tells CIO Magazine: "Quite often CIOs have previously been seen as 'a safe pair of hands'; that is no longer the remit. Understanding and selling how technology can drive the business forward and how to manage and integrate multiple tech partners are fast becoming key requirements of the role."
This need for solid partnerships - a more long term plan that is built up over time - is backed by the survey. When asked what top three skills will be required by 2020, CIOs responded:
- Being able to manage a broader set of partnerships (58%)
- To lead a transformation of the customer experience (53%)
- To better articulate how the business can use technology to generate revenue (51%, followed by "the ability to excite and engage" at 50%)
Delivering IT services
With digital now at the heart of every firm, most businesses are IT organisations. This opinion is reiterated by a law company CIO, who says: "Whether or not they believe it, many businesses are now IT businesses - not just users of technology but delivering technology based services that are used by customers directly."
This makes it now necessary for the board to discuss the company’s IT investments, strategy and opportunities. The CIO's influence is integral: with his or her help, the board can recognise how digital services generate value for the business and the customer, other than the initial transaction.
Traditionally considered the CIO's central role, IT is not considered core to today's job. When asked: "which three skills are less important today than they were five years ago?", the top response, at 83% of respondents, was "core knowledge of IT".
The ability to market IT to the business was also considered less important, with 47% of respondents choosing this answer. This - in addition to the 50% of CIOs who said last year that they are board members - suggests the business knows IT's overall importance.
A focus on becoming a digital leader also emphasises the need for CIOs to free up time previously spent on IT and infrastructure. There is a requirement to change in the way IT is delivered, with automation and self service cited by those questioned as a means to do this.
According to the surveyed CIOs, there is growing demand for better automation of workflows, service integration and management, and process automation.
Into the future
The eight in 10 CIOs who have not made the transition to digital now need to move beyond technology, towards a more strategic approach. More than anything, this requires a new mindset: a digital CIO must think beyond IT towards creatively leading innovation within the business.
It will not be easy.
The modern business is now an IT business, and the CIO's already proven skills, knowledge and experience are well-placed to lead the organisation. According to one CIO at a global risk consultancy: "Many CIOs have grown up from strong technical roots. The new CIO needs this understanding, but must also be an innovator and business leader. She or he must be comfortable in front line business environments; many are not."
An education industry CIO agrees, saying: "Being an evangelist on a public stand is not something we are naturally trained for or something that comes easy to us."
So many are not comfortable leading the business, but with learning and commitment, every CIO can move out of their comfort zone. It entails moving beyond operations and infrastructure and focussing on the 5Cs shown in this report.
As a public sector CIO says: "The CIO role is changing: taking people out of their comfort zones can only be a good thing."
The five 'Cs': key skills needed to become a digital leader
Perhaps the most important - and alien - concept to long-time CIOs, communication with all areas inside the business is key to digital leadership.
This means stepping outside of the IT function's natural comfort zone and communicating across the supply chain. It will see CIOs embrace stakeholder management, relationship building, networking and influencing skills.
As a CIO working in the education sector says: "A true CIO should be a visionary leader able to articulate clear strategies and goals to meet the business needs. [He or she] needs not only technical skills and understanding, but also the ability to listen to other members of the board team and collaborate to be effective."
CIOs questioned in the survey confirmed: there is an increasing expectation to drive business transformation. This can be seen in the need to transform the customer experience - which six in 10 said they need to do within two years. It is then essential to ensure this vision is understood by the business.
At the same time, CIOs are influencing the technology choices being made by departments other than IT. It calls for a joined-up and consistent approach across various IT budgets and initiatives.
This ability to communicate effectively will not happen quickly: it requires time to build trust and rapport and must be done regularly. As such, digital CIOs should start to put aside a few hours of each working week for networking. This includes attending events, dinners and generally socialising with key people.
IT has always been at the core of what the CIO does and this knowledge can be harnessed by experimenting with new uses of technology through partnerships.
When asked what the single biggest change would be to the CIO's role in five years' time, the top answer was "becoming an innovation partner" followed by the ability to create and manage new partner ecosystems.
On top of internal partnerships, a digital CIO can be agile by creating new external relationships through partnering and building supplier eco-systems. Collaboration with partners, suppliers and customers can create new offerings and generate value for everyone in the business, demonstrating the CIO's unrivalled digital leadership skills.
It is not always easy, but a digital CIO must learn to be creative. This means thinking differently about products, partnerships and running the digital business - and ways in which this is presented to others in the organisation. A digital CIO should have a strategic vision of how technology will transform the business and how this can be implemented.
This creative yet strategic approach not only applies to general thinking, but to allocating budgets and managing costs. It entails the creation of new business models, products and services; the generation of new revenue streams; and the creation of a unique customer experience.
The digital CIO must think like a marketer and learn how to sell to customers. This requires different ways of thinking, and an ability to use the power of technology as a platform for new ideas. Digital CIOs must not hesitate - and they should have the ability to move quickly, with a focus on driving growth and the relationships needed to encourage this.
For example, "managing change based on customer insight" is something cited by an insurance industry CIO as essential in the battle to become digital.
Part of honing these skills could entail a data-centric approach: whether working with external partners or departments internally, how can the CIO use vast amounts of data produced by the organisation and its customers to intelligently predict trends and improve the product?
CIOs have amassed vast knowledge from years spent working directly with technology. But in order to continue to innovate and create new products and services, they need to continue to learn.
Technology is constantly changing: cloud is seeing astronomical growth and social media is now key for many IT businesses. A digital CIO should ensure he or she keeps track of new technology capabilities and considers how these could be applied to the business.
This requires research: by talking to partners and fellow CIOs, as well as reading industry reports, it is possible to identify relevant technology trends and use them to help generate products and services and - ultimately - revenue for the business.