Chief Information Officers have long had to go beyond simply managing information technology and find ways to create additional value for businesses by leveraging that technology. As the world embraces new technologies seemingly every day, CIOs now find themselves at the helm in steering companies in the right direction to keep pace with the latest trends and support their business as a gatekeeper to enabling and supporting technological transformation.
According to research conducted by the Massachusetts Institute of Technology’s Center for Information Systems Research, only 47% of Chief Technology Officers and 45% of CIOs can be considered to be digitally savvy. Digital savviness implies an understanding of the impacts that emerging technologies will have on a given business’s success over the subsequent decade, and conveying the importance of these effects to the top management team is key to the success of corporate transformation.
Often, top tech execs are more focused on IT infrastructure and back-office operations than on creating business value based on digital technologies. Moreover, only 12% of leaders in the finance and insurance industry can be described as digitally savvy, which underscores the risk of disruption to the industry by more agile fintech startups. Such statistics suggest a misplaced priority on ensuring compliance with regulations rather than creating value via new products and business models.
Companies with digitally savvy executives in five key roles — Chief Executive Officer, Chief Finance Officer, head of marketing, head of corporate communications and investor relations, and head of compliance and legal — show the strongest statistical link to high performance. Top-performing companies are twice as likely to have a digitally savvy CEO.
Many successful CIOs have now realized savviness is a much broader concept that is a prerequisite for many executive roles and an overall organizational journey that the CIO can influence, lead and support alongside the CEO.
Finding A Balance
CIOs are constantly faced with the dilemma of keeping production running while listening to business needs. Achieving an appropriate balance is a challenge because technological development is an ongoing process as businesses continually identify new needs. There’s a trend toward greater business agility and an experimental “fail fast” approach that demands the implementation of an information and communications technology (ICT) strategy. McKinsey recommends establishing the role of technology as a business and innovation partner by designing a “tech-forward” business strategy (e.g. technology-enabled products and business models), integrating technology management across organizational silos, and delivering excellent user experiences.
The CIO often must choose between focusing on production or supporting the execution of business strategies. Often it is the skillset of a CIO that allows for one or the other rather than a conscious decision. The Chief Data Officer role has emerged partly for this reason as it facilitates the CIO in maintaining a production-centric focus.
“Because CIOs define their position in relation to the production-business support dimension, their role should be based on a strategic decision that considers both ICT and business strategy.”
Because CIOs define their position in relation to the production-business support dimension, their role should be based on a strategic decision that considers both ICT and business strategy. Role changes may be difficult for a single individual to accomplish, but taking an organization to the next level requires a personal level of change for the CIO.
A New Paradigm
Standardization has often been seen as a precursor – even a prerequisite – for digitalization. Thankfully, this paradigm has changed; building a perfect platform first is simply too costly and time consuming. As such, large-scale programs and transformation initiatives have become increasingly modular and now tend to feature shorter delivery cycles. Artificial intelligence, automation, application programming interfaces (APIs), and a multitude of enablers are emerging alongside new ways of working, both in business and in technology.
In terms of large-scale IT initiatives, planning should be a dynamic process rather than something static, which allows transformation teams to remove roadblocks as well as allocate people and resources as needed. CIOs are producing value by hosting a war room for issues facing initiatives: technology choices, integration, vendor performance, security, platform performance, a lack of resources, priorities, and skills, just to name a few.
“CIOs are producing value by hosting a war room for issues facing initiatives: technology choices, integration, vendor performance, security, platform performance, a lack of resources, priorities, and skills.”
McKinsey recognizes the need to reinvent technology delivery so that services are improved through agile ideas. These include improving IT services through the addition of next-generation capabilities such as end-to-end automation, utilizing platforms as a service and the cloud, building small teams around top engineers, and developing flexible technology partnerships. The CIO’s role is an example of agility in the sense that the CIO must lead in relation to engineering capabilities removing obstacles.
The CIO As Gatekeeper
The importance of security should be clear to all, although it is the CIO as gatekeeper who must deal with the issue in practice. Determining how best to implement rules and practices in a structural way is a constant challenge; there’s no need to stifle business creativity with an overregulated environment. According to McKinsey, if businesses are to keep pace with rapid technological advancements, CIOs need to implement a flexible architecture supported by modular platforms, enable data ubiquity, and protect systems through the introduction of advanced cybersecurity measures.
“Determining how best to implement rules and practices in a structural way is a constant challenge.”
The ability to work digitally is as much a mindset as it is a practice, and there are certain behaviors that serve this ability best. These include being able to experiment with new technologies and unproven ideas, embrace an iterative way of working, pivot quickly between different projects and stakeholders, and exhibit resilience in relation to changing course and dealing with failures.
According to Stephen Andriole, Professor of Business Technology at Villanova School of Business, a successful CIO must identify and integrate technological solutions on a case-by-case basis to see how they operate and what real value they create. He encourages CIOs to follow a bottom-up approach that allows for a technology to be selected, tested, and then either scaled or rejected.
Hiring The Right Talent
What should data-focused managers think about when it comes to onboarding CIO talent today? What do companies and managers tend to overlook? Jonathan Tudor, Director of Data and Analytics at GE Aviation, notes that it’s necessary to think outside the box when it comes to IT or data and analytics.
“You can’t just be a technologist today. Oftentimes, the problem you’re going to encounter won’t be a technology problem but a people problem.”Jonathan Tudor, Director of Data and Analytics at GE Aviation
“You can’t just be a technologist today. Oftentimes, the problem you’re going to encounter won’t be a technology problem but a people problem,” he says. “On my team, we often think of ourselves as a startup within a larger organization, where you need to wear many different hats. We have many people who have non-traditional backgrounds for IT — for instance, former musicians and chefs who switched careers and bring diverse experience to their work in data and technology. I think this diversity helps in many ways for connecting with people, because much of our work is people-oriented in addition to being driven by good technology.”
It’s also important to stress the necessity of a business partnership for any self-service program to be successful. An example of this is data ambassadors — professionals not on the central data team but who can act as extensions of the team in business locations. They help manage communication, break down organizational barriers, and drive governance across different sites. Encouraging this type of collaboration is critical for amplifying the role of a smaller self-service team across the wider organization.
Now that technology is embedded in every aspect of business and business value, it is up to the CIO to unlock the full potential of technology in its broadest meaning to set, shape, and execute ambitious business strategies – which will effectively steer the business in the direction of its choosing. Now more than ever, it is crucial for companies to establish strong data leadership capable of defining and delivering on a data vision that supports their overarching business vision.
About the Authors:
Arto Sormunen is a Partner at the Helsinki office of Stanton Chase and specialises in executive search for clients in the realm of technology transformation.
Petri Imberg is a VP for CGI, where he focuses on large clients with transformative business and technology needs. Petri has broad experience in the technology industry and with CIOs.