Choosing the CIO You Want to be Requires Restating Your Goals | News | CIO Summit Vienna 2013

Choosing the CIO You Want to be Requires Restating Your Goals

The role of the CIO can be hard to pin down – partially because it keeps changing in the current fast-paced IT environment. Cloud and mobility have altered how applications and interfaces are developed and delivered. Big data has opened doors to a deeper understanding of how an organization works and what the people it serves are after. Social media has altered the way we communicate. Yet traditional systems live on, requiring upgrades and support even as business and public sector leaders are told the cloud will make everything possible and the CIO may no longer be needed.

With more than two decades of experience examining how IT markets change businesses, governments, individuals, and economies, IDC's VP in charge of Europe, the Middle East, and Africa has studied the ever changing role of the CIO in-depth. Over the years he has met hundreds, worked on scores of surveys, and paid close attention to technology and its evolution. We sat down with Mr. Frantzen to discuss the changing role of the CIO and what it means for business and government.

Every few months an article pops up about the "death of the CIO" – they generally say that we'll always have IT guys making sure the servers work and the applications run, but the kind of top level planning and coordinating will no longer be an issue because of things like cloud and modular programming and connectivity. What do you think of these proclamations?

The death of the CIO is like a working fusion reactor – it is always ten years away. But the recurring pronouncement points to deeper issues surrounding CIOs and their roles and activities within organizations. One of them is that many simply do not know how to specifically define their role beyond core IT. Yes there is the infrastructure component – making sure servers work, email clients get debugged, PCs around the company are properly networked and secured. And yes there is usually a larger IT development component – working with departments and divisions to ensure IT tools are in place that make things run smoothly.

Unfortunately many CIOs let themselves get caught up in the technical management of both and use that to define the position. It then becomes more reactive than proactive. One way we see this is in how IT staff are recruited or trained. They are technical, great at what they do – system administration, coding, networking management – but have little sense of the larger business and no true understanding of the best way to provide value to their internal clients. Then the entire team becomes oriented towards being service brokers or even simple IT custodians. None of this needs to be case; since IT is the backbone of the modern organization, CIOs have a lot more influence than most people realize or that they themselves may realize.

That makes it sound like CIOs have more say in how their roles are defined and perceived than say an HR director or a CMO.

In many ways they do. If the CIO wants to remain a service broker or a custodian, they certainly can. But then they can expect to be dragged along by division heads and line-of-business managers looking for better IT – or lose oversight of IT in some areas altogether, e.g. as we increasingly see with the deployment of social technologies. That in turn will bring their role into question and it may indeed die. Or they may be replaced, as forward looking C-level executives and boards are already seeing that the CIO position needs to be more than it was five years ago.

To define the role beyond services broker, a CIO needs to expand the goals of their position. At any given firm, we know the marketing director's goal is working to improve awareness, brand image, and sales. We know the sales director's goal is to increase revenue. We know the CFO's goal is to keep cash flowing and the current ratio well above one. To avoid being defined as a high-level IT guy, CIOs need to make it automatic that people think of their role in terms of their goals, which should include things like "process and business enabler" and "innovation architect."

This is the transition we know CIOs are making in North America and Western Europe – being seen less as an IT services broker and more as an agent of change. But how do you convey that in a concise and tidy title? People know what increased sales mean just like people generally know what it means to keep servers working and the firewall running. It is easy to attach that – and only that – to the title.

That is an issue. Sales and revenue are concrete. Change and innovation are not – which means there are no cookie-cutter CIOs or so-called innovation goals that can be easily related in non-abstract terms. We can play with the name, calling them "chief innovation officers," "chief technology officers," "chief transformation officers," "chief access officers," or "chief information architects". All are partially true. But none of them speak to the complexity underlying the position; and some of them keep us locked into a technology mind frame when thinking of the role. Make no mistake, technology is central to the position. But the technology is really about enabling and improving corporate processes, delivering value to the business, and managing resources and risk. That reflects the greater aspect of the role, which requires a deep understanding of both the business goals and how the business works.

We are still speaking rather generally – can you put this in a more specific context?

Sure. So much of our more recent research on senior IT executives shows that line-of-business is going to be driving upwards of 70% to 80% of IT investments in the future. So let's take sales and marketing as a case in point.

First there is the technical aspect of being a CIO. Understanding customers is a top priority for pretty much every organization. So the sales and marketing team want a CRM system to better communicate with clients and potential clients. The complexities of assigning criteria to each contact and determining when to contact them, how often they have been contacted, what their interests are, what their complaints are, the likelihood of conversion or being upsold – all of that requires a fairly detailed understanding of how a CRM works and what it is capable of. Because of their background, CIOs can figure this out fast. They can then help ensure that the technical aspects are fully explained to sales and marketing and drill deep to tease out potential glitches or limitations.

Then comes the idea of service and business processes facilitation. To consult with CRM sellers on behalf of sales and marketing, the CIO must also understand the relationship between sales and marketing and how they work with each other – or just as often antagonize each other. The CIO must learn the types of sales and marketing campaigns that have been effective in the past, how those campaigns were carried out, how sales and marketing communicate, how they want to communicate, and how a CRM system might change every one of these things.

Then comes real value add. The CIO can take that next step and ensure that the CRM can be connected to contact databases, products and services database, corporate dashboards, analytics applications, social media buzz monitoring, product development, financial reporting breakdowns – you name it. In many organizations each of those might run on a different system. The CIO makes sure the architecture and formats are compatible and that in the long-term everything will come together on a single platform – whether done in house or in the cloud, basically all the systems need to talk to each other.

Then comes the vision and innovation. Because the CIO has taken time to understand the needs of each division, of each line-of-business, of each corporate layer, they can propose CRM principles to other leaders within the firm – proactively showing how things can be improved or changed. CRM principles could be applied to internal IT support systems, to holiday or HR requests, or to wherever SLAs are in play. They might also take general lessons learned about professional or departmental relationships and use those to refine implementation for other projects or identify new projects. They might also decide the CRM platform offered by the vendor could be used to replace three or four other platforms in the firm, thereby further consolidating IT and keeping down costs.

That is a rather tall order. The CIO already has his hands filled with software licenses, service, upgrades, security, firefighting – as well as making systems work better for those that need them. Now you are saying they need to understand the company better than CEOs, COOs, CFOs –

In some ways, they need to. Now the CEO is going to better understand how an organization's portfolio of services meets customer needs and how resources should be shifted around and how overall positioning and branding can impact sales. The CFO is going to better understand the interplay between P&L centers and cost centers and how activity in one impacts the other. The CIO needs to better understand how people communicate, the kinds of information they need to do their jobs, the relationship between different areas, and how technology can make it all work better, all with stable infrastructure and in a secure environment. In this sense, they may indeed have a much better handle on how things work. They also have an eye on what next, in terms of IT and the potential impact on business. This allows them to design an IT architecture that not only serves business goals but makes an organization more cohesive and ultimately more innovative.

Many leading CIOs already understand the importance of getting closer to the business and developing a better understanding of IT-based business strategy and the potential for innovation. Much of our survey and discussions with CIOs points to changing perceptions and priorities in which focusing the IT organization more on business strategy and fostering a culture within IT to foster more innovation to their personal agendas.

Okay, but there is still a fundamental need to keep the IT systems running smoothly. If the CIO is going around trying to innovate new solutions and get different divisions to try new things, what happens to the old things?

This is the fundamental tension off the CIO position. On the one hand they must be mechanics and fire-fighters and spend a lot of time saying "no". On the other they must be thought leaders, at least internally, and need to find ways to say "let's try it" or "here's something that can help you." One way to balance the perception of two is to train the IT support staff to identify what might be called micro-innovations that can be shown to each employee with every repair or upgrade or helpdesk request. Right now, most people in any given organization barely understand how things work outside their department, let alone their division. The result is that for non-IT, their contact with anything IT related is usually some kind of internal support, often after sending in a helpdesk request. To prevent the IT department as being seen as little more than a custodian or services broker, the CIO can ensure that IT finds some small way to add value to each employee they come in contact with. It could be showing them a shortcut for synchronizing smart phones with PCs, giving them a few tricks for using their email client, giving a "spontaneous RAM upgrade" to key employees – something interesting or useful. It does not have to be big. The cumulative effect of this proactive approach will help change the perception of IT and should open doors for input from non-IT that could yield additional opportunities for innovation – all while keeping the infrastructure running smoothly. Of course one of the key points of success will be the ability to build relationships and communicate effectively with non-IT staff.

Sounds like it could be expensive.

It does not have to be. Now we know IT is too often considered a cost center. But a CIO who redefines their role in terms of value add and as a change agent, a CIO who can build trust through proactive engagement at all levels will find ways to economize – through sharing platforms, system consolidation, more efficient use of staff, and so forth. In some organizations, it might even bring more money in for projects that will ultimately save money or support new types of business and revenue streams.

How does it begin?

It goes all the way back to how a CIO wants to define his or her role. It needs to be done both in terms of tasks and in terms of goals both for IT and business – with strategies in place to overcome any obstacles to achieving those goals. It also means embracing the emerging technologies – for instance, instead of treating BYOD as a threat, embrace it and get out front of it to make it work. In firms where the CIO is still a custodian or a services broker, it will not be easy. But it will be worth the effort, making the job more exciting and the organization a better place for all.

In summary our view is that the future CIOs will focus increasingly on managing business services, driving analytics and overseeing controls. They’ll own the adoption of new business services while ensuring security and seamless information architecture. They will also be required to posses skills around information architect, services sourcing and contract management, business process and change management, compliance and risk management and policy development and management (e.g. security, data management and ownership, mobility management, social technology usage). And, most importantly they will have to be a driver of business innovation. Technology remains important, but the future CIO may be a non-IT business executive who excels at innovation, communication and change.

Steven Frantzen is IDC's senior vice president for the EMEA region and MD for the CEMA region. He has been researching IT markets and advising on IT practices and policies since 1990 and is widely regarded as one of the world's leading experts on how IT is transforming national and regional economies.