Digital change and the CIO

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8 October 2015 | 0

If there’s one thing all CIOs arguably now have in common, it is that they cannot escape the impact of digital change.

Digital is changing every aspect of their businesses, from how they interact and communicate with customers to developing and delivering products and services that drive efficiencies. The question today is what organisations, and their executives, are doing to address such wholesale change to the way they function and go to market.

At the same time, the digital era has raised questions about the ongoing influence of the CIO, and the strategic priorities IT leaders must assume to remain relevant. If this year’s State of the CIO report is any guide, many CIOs not only believe they are becoming more important in this transformation, they are working to make such change happen right now.

This year’s State of the CIO is a barometer for how IT is being perceived and responding to these winds of change. Many respondents indicate they are meeting the challenge head-on by creating new, innovative products and services to achieve their business goals and secure their future growth.

More than 25% are being asked to lead a product innovation effort this year, compared to just 6% in 2014. At IP law firm, Griffith Hack, the IT group is working closely with the CEO and board to create two new products that will completely change the way the firm does business with inventors and corporate organisations, its CIO, Andrew Mitchell, says.

“It’s about changing the way we look to our clients … and how we can provide a better service. The CEO now realises that technology plays a major part in that,” he says.

This is so much the case that Mitchell, who is also director of operations at the firm, is reporting to the board every month.

“It [business improvement through IT innovation] is high on their radar,” he says. “With the nature of our business, dealing with client’s inventions and innovations we have to show our clients that we are also helping to make them more efficient.”

Paul Kennedy, CIO at retail group, APG & Co, is also working on several IT-driven innovations that will be released to the market shortly. He adds the company’s CEO has put the emphasis on using technology to drive ‘customer-facing’ innovation to improve customer experience inside its stores.

Challenging but rewarding
Another key finding from this year’s State of the CIO results is that CIOs are enjoying an improved relationship with their CEO. More than two-thirds of respondents said their CEO consults them frequently about the organisation’s strategy and future, a sign that technology is firmly recognised as a strategic pillar in how businesses move forward.

The majority of CIOs (87%) either strongly agreed or agreed the CIO role is becoming more important to the business. Notably, 88% of CIOs that report to CEOs saw the CIO role as becoming more important to the business, compared to 73% for CIOs who did not report directly to the CEO.

It was also made clear that CEO support is a vital key to gaining such business clout. Just 28% of CEO reports felt their role was being side-lined in the business, compared to almost half of non-CEO reports. Overall, the number who thought the CIO had been side-lined dropped from 38% to 27% year-on-year.

Mitchell has seen a real change in the way his company’s CEO and chairman consults him about business strategy.

Mitchell was given the dual role of CIO and director of operations just over 12 months ago, and now has a revenue target to meet. He sees this as indicative of the trust he has gained with other senior managers.

“You’ve got to build that trust. Once they know you are commercially astute, that’s where the trust starts,” he says.

For Matthew Perry, CIO at DuluxGroup, IT at his firm is a little way behind in terms of business recognition, but is on a mission to transform from a traditional IT function into a strategic partner to the business.

“Running IT like a business is key. The ability to articulate value [to the CEO and other executives] that IT delivers to our customers and consumers is a critical step in this journey,” he comments. “Delivering an agile, adaptable, business-focused and value-adding service is another step.”

IT versus line of business
As technology becomes the foundation for all aspects of efficiency and innovation, technology knowledge and utilisation is rising across the business. This is triggering a substantial shift in the relationship between IT and the lines of business, and particularly IT and marketing.

Last year’s report showed 26% of respondents had mutually shared and measurable goals with their marketing function. This year, 83% expected to collaborate on a specific business initiative with their chief marketing officer over the next 12 months. The only peers higher were finance and operations, both not surprising given so many CIOs report to these functional heads.

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