According to management consultancy Capgemini, 52 per cent of the Fortune 500 firms in the year 2000 are now gone: either bankrupt, acquired or ceased to exist.
The forces bringing about such massive change in corporate success are extremely powerful when you consider the scale of revenues involved – in 2000, the company at position 500 scraped onto the list at just over $3 billion.
Digital disruption and innovation have been at the heart of this huge financial churn and have transformed our aspirations for (and expectations of) IT delivery. Its traditional role - design, install, patch, fix and upgrade - is dying out, which presents challenge and opportunity to corporate tech leaders.
For most CIOs in non-Generation Z businesses, this has created a lingering legacy headache of outdated technology and culture. ‘Hungover CIOs’, who remain focused on IT as a cost centre, rather than a profit opportunity – are being left behind. But adapting is a major challenge - many CIOs will recognise a spectrum of technologies and practices which have stubbornly resisted the momentum created by ongoing digital disruption. This ‘hangover’ can be inconvenient, painful and gets in the way of efficiency, effectiveness and competitiveness. In particular, the symptoms include:
- Strategy – CIOs are increasingly asked to focus on the value they can add, not just the money they can save. The challenge is that the business keeps asking for more, but the CIO can never get ahead of the game.
- Resources - Legacy technology can be a serious problem, and potentially very difficult to transform. The focus for CIOs is increasingly all about migrating resources to ‘as a service’ platforms, but this isn’t always possible, despite advances in approach like containerisation. And if it can’t be transformed, who then manages the legacy, and for how long?
- Requirements - Businesses spend more non-IT budget on IT than ever before, with technology procurement decisions taking place across all areas of the business. But CIOs are frequently in the position of having to pick up the pieces when things go wrong, are often the last to hear about the purchase of a new service and cannot influence decisions in the way they used to.
- Security – Security and compliance keep getting tougher and more expensive. When something goes wrong, the implications can be profound. CIOs don’t want to be caught in the headlights, but can they trust security to outside providers?
Given that these challenges are increasingly incompatible with business objectives, the lingering question for the hungover CIO is – ‘How much longer can we continue to do the same thing?’
New role, new responsibilities
The new-world CIO must now strike a balance between exploiting technology and continually exploring its potential. IT still needs to reliably and securely support the business, but perhaps more importantly, it now needs to create the agility to enable growth and change. The responsibilities are substantially different, and the CIO skillset is becoming more diverse as a result.
One example of an increasingly important role requirement is around supplier and partner management. True shared responsibility models between businesses and their external specialist partners are becoming more popular, particularly around business-critical considerations like security, and require substantial ongoing investment in terms of time and energy to collaboratively achieve business outcomes.
Another CIO requirement is to understand and evolve the precise relationship between technology and customer experience; the CIO is central to a successful customer engagement strategy and needs to own the decision-making process.
On a very practical level, CIOs need to acknowledge and embrace the defining technology trends which affect society as a whole, not just the narrow confines of their 9-5 world. Shadow IT & BYOD are perhaps the most important examples, with businesses swimming against the tide to monitor and control technology procurement and personal device usage. Given that 36 per cent of business IT expenditure will go on shadow IT resources in 2016, it can no longer be treated as an annoyance – it’s delivering an important lesson to CIOs that they need to adapt. It’s a bit like an author buying a PC for writing a book – to them it is just a tool in the same way that a pen and paper can be. So why do we have IT departments who still – in effect – aim to control what type, colour and manufacturer of pen can be used?
Inevitably, the shift in CIO responsibilities needs to be mirrored across their teams. The CIO has a key role to play in identifying, nurturing and retaining the best talent, and where it is not possible or practical to find and engage those individuals, work with their technology partners to achieve the same impact and results.
Digital disruption has created enormous change, but for CIOs its effect has also delivered opportunities to re-focus IT on creating real business advantage. It is reinventing and rejuvenating the CIO for the next decade, but curing the hangover is key to getting there.
Kevin Linsell, Director of Strategy and Architecture at Adapt
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