Technology has often been seen as the poor family member in comparison to some of its more established line-of-business relations. While finance, marketing and operations sit proudly at the top table, technology can struggle to get the highest levels of recognition.
IT decision makers often seem to be excluded from a seat on the executive board. Recruitment specialist Harvey Nash says just under a third (32 per cent) of CIOs report directly to the CEO. Such exclusion can make it difficult for IT leaders to contribute to business strategy.
The apparent marginalisation of the CIO seems strange at a time when now, more than ever before, technology is viewed as playing a fundamental role in business success across all sectors. Even today, when a CIO asks for budget for a better server, it’s seen as a cost rather than an opportunity to increase a business’s profitability. But IT is now a major profit centre for many businesses – why should it continue to be treated as a cost?
One possible explanation for the disconnect is the increase in shadow IT, where non-IT employees source their own technical solutions to business challenges. As workers become confident with using apps in everyday life, they become the go-to in situations where conventional business IT is hindering working practices. The rise of the cloud and mobile apps also means it is now much easier for workers to buy or use free services on-demand for business use, sometimes without confiding in the CIO.
This stealth-like approach represents a significant concern for technology chiefs. According to researcher Vanson Bourne, more than three quarters (76 per cent) of CIOs say departments within their own businesses are now sourcing and commissioning products with no input from the IT team. In total, it is estimated that as much as one quarter of technology spending now takes place outside the IT department, while analyst firm Gartner suggests that CMOs will spend more on technology than IT directors by 2017.
Such decentralisation places a question mark over the future of the CIO. After all, if line-of-business employees are buying their own services and systems, it poses the question why any company needs a dedicated executive to oversee IT procurement? Add in the rise of chief digital and data officers, and it becomes clear that pressure on the CIO is coming from all directions.
But there is hope.
Signs that businesses are – at last – beginning to take the role of IT seriously are starting to emerge. There is a broad recognition across the c-suite that IT plays a crucial role in business transformation. From supporting business productivity to helping an organisation gather intelligent data to inform strategic decisions on business evolution, IT is increasingly at the centre.
This awareness must be accompanied by a reassertion of the importance of the CIO’s position. Despite the rise of decentralised purchasing, the CIO remains the executive who is best placed to understand the role of technology in the modern business. CIOs have spent many years integrating platforms, establishing governance and creating roadmaps for the best use of IT in the business.
As the pace of IT-enabled change continues to quicken, the one constant, at least at an executive level, is the CIO. As digital takes hold, businesses should benefit from IT leaders’ experience of implementing technology change projects.
Gartner reports that successful organisations tend to increase the contribution of more technical roles, such as those covering technology, innovation and risk. This is the opportunity CIOs need and must be seen to step up and take responsibility for these areas. But it doesn’t stop there.
For a full reappraisal of their role to take place, CIOs must assume more responsibility for their own careers, particularly in regards to how they are perceived across the rest of the organisation. It’s time for CIOs to go beyond simply running day-to-day operations, to prove they are multi-tasking innovators who can drive business change.
A tipping point, therefore, has been reached. CIOs must play the role of objective innovators and prove they understand better than anyone else the disruptive role technology will play in business during the next decade. By embracing IT innovation, CIOs can survive and then thrive.
- Gartner on the growth of the CDO role: http://www.gartner.com/newsroom/id/2208015
- Examples of companies with CDOs: http://www.digitaltransformationbook.com/15-companies-chief-digital-officer/
- The rise and fall of the CDO: http://www.computerweekly.com/feature/Chief-Data-and-Digital-Officers-rise-to-threaten-the-CIO
- Forrester on the demise of the CDO: http://www.zdnet.com/article/forrester-warns-cdos-dont-expect-career-longevity/