Something interesting is happening in corporate Ireland. A reshuffling of the organisational deck is taking place, and as usual technology is playing a big part. The role of the chief information officer (CIO) is changing, and that is because it is becoming harder for the top brass in any serious enterprise to ignore the increasingly central role IT is playing in the business.
Technology is now a factor in more strategic decision making than ever before. From big data and business analytics, to break out departments using cloud technology to operate more like start-ups, technology is increasingly the medium in which business takes place. So how can a savvy CEO take advantage of this shift, and how can a switched-on CIO make themselves indispensable to the business?
Dramatic change
“In the last couple of years, the job of the CIO has been the ‘c-level’ role that has experienced the most dramatic change as the world becomes increasingly digitally-driven and all-new forms of IT have taken off,” said Paul Pollock, managing director of Accenture Technology.
“Certainly the positioning of the CIO has taken on a much greater relevance today than in the past. In some organisations we see a chief digital officer but in others they have combined that CDO and CIO role, but given the impact technology is having on the business, particularly to top line growth, it is becoming a much more prominent role.”
The result of this is that in many organisations, the CIO is becoming increasingly aligned with the CEO, reporting directly to them, when in the past when they tended to report to the chief financial officer or chief organisational officer.
“When you look at a lot of the new tech organisations, such as Google, LinkedIn and those, many of them are engineering-led companies and as a consequence, the role of IT is perceived very differently to how it is in traditional industries such as banking or even in the public sector. In some of these it’s very much a function of the culture in the organisation that the role of IT is much more strategic and much more important than elsewhere,” said Pollock.
“But the advent of digital, cloud and other technologies is now starting to drive businesses in a different direction and CIOs are becoming much more central in terms of strategic decision making.”
Cloud-delivered
Meanwhile, there are other changes taking place in the way large enterprises organise themselves. One notable example is an increasing trend for business units within large enterprises to look on cloud-delivered technology as a way to provision the technology they need to facilitate their business goals.
How does this square with the traditional role of the IT department as a service provider to the business?
“This is something we’re also starting to see—a kind of nuanced, borderless IT where you have businesses procuring things in the cloud and as a result, the provision of technology is no longer the sole remit of the traditional IT function. What that means for the CIO and the IT organisation is that they need to be much more collaborative and operate much more as a strategic partner to the business,” said Pollock.
“That’s why in many organisations we’re seeing parts of IT becoming effectively embedded within the business and there is a real sense of intimacy between business and IT. Obviously collaboration is a key thing.”
Varying change rates
Catherine Doyle, enterprise sales director for Dell EMC Ireland, agrees that the role of the CIO is undergoing change, but the rate of change varies wildly from company to company.
“Not all CIOs see themselves in an increasingly important role, but all the future-ready CIOs do. What a lot of them are doing is creating a separate innovation team, ring-fencing old technology that’s core to how the business runs, and creating a change-the-business piece separate to that,” she said.
The effect of this is to introduce a research and development function into the IT department that has not historically been there. While R&D is a routine part of the business function it has not so far been a big feature in how companies think about their own internal IT operations. That is now changing, according to Doyle.
“It’s called all sorts of things depending on what industry you’re in but some of the big banks that we’ve been dealing with across the UK and some insurance companies here are doing it now. I recently spoke with a CIO in Dublin that has set up an innovation and strategy unit for just this reason. It will have a representative of each of the business units,” she said.
“We also worked with a large retail bank in the UK that felt it wasn’t really reaching 25-35 year olds as well as it could. It didn’t have an app to get a quote or allow people to interface with it directly so we helped to get that app to market in six weeks. A traditional IT department just doesn’t work at that speed.”
“So to create agility and speed most of the time requires a different department, a different set of guidelines and rules that they can live by.”
Bringing in people
This is something with which Eamon Moore, managing director of EMIT agrees. He argues that if your IT strategy does not take in people, process and technology, it is “very much a flawed strategy.”
“It’s flawed because the days of the IT department being siloed away and given a bit of budget to upgrade infrastructure and hardware every couple of years are gone. The CIO has very much taken a seat at the boardroom table and as new initiatives are brought into companies, part of the strategy has to be ‘how is technology going to power them?’” said Moore.
“The situation to be avoided is having the business come up with strategy and then when its finished, bring in the IT department, which is perhaps how things were done in the past. Instead, you have to have technology very much at the forefront of the strategies that the business is coming up with.”
Moore further agrees that self-provisioning is an example of how IT has moved centre stage.
“In the past, the IT department was typically seen as a cost centre and when things got a bit tougher, it was told to cut the budget. But actually technology is used across all departments. With traditional infrastructure, it is kind of hard to decipher who uses what,” he said.
“But today, cloud technology is being used in each department and technology is a cost centre within that department. It’s far easier with the X-as-a-service delivery model to work out what each department is spending.”
The result is that companies that facilitate this way of organising their affairs are being rewarded with more agility and more accurate per-proposition costing.
“It’s giving companies and even departments within companies the agility to go to market at speed. Whereas before it would have taken large upfront investment, that ‘lumpiness’—literally of having to find lump sums—has gone away and what we’re seeing is more spend on projects that allow companies to scale and grow,” said Moore.
“And as cloud-delivered services come to the fore, the business is starting to see the value that they represent. They can be dialled up and dialled down as projects come and go and they typically come with built-in benefits such as business continuity for data recovery. Perhaps that mightn’t have been included in the spend before.”
Cost breakdown
The future-ready CIO is increasingly breaking down their IT spend per department and as a percentage of overall cost rather than as a single monolithic cost.
“That way you can truly see the profitability of a department, or of an initiative or indeed a project. Before it was all wrapped into one profit and loss statement and I think the ability to separate that out can give you a cost at a per-initiative level.”
According to Francis O’Haire, director of technology and strategy at Data Solutions, when it comes to corporate trends, Ireland tends to follow behind the UK, which in turn follows behind the US.
“This kind of thinking is happening in Ireland, and we operate in the UK as well and we’re seeing it there too. All you have to do to see the seeds of this situation is look at the how shadow IT has grown, the idea of technology finding its way into the enterprise without the IT department really being aware of it. People want to access the best tools to do their job, that may mean that their own personal technology or it may mean cloud delivered services they can provision with a credit card,” he said.
“People within certain departments in the enterprise tend to be pretty tech-savvy, especially in marketing for example. They tend to move ahead anyway if the CIO isn’t on the ball and isn’t working to facilitate them. For this reason, CIOs need to become far more open to change and far more strategic in how they facilitate the business goals of the company.”
“The reason why people might go ahead and provision resources in the cloud themselves is because they’re afraid to go to the CIO and ask to use a new technology, be it file sharing or mobility or whatever. It is much easier to just provision it with their own budget. To get around, this the CIO and their department has to be a trusted advisor, almost like a reseller to the business,” said O’Haire.
‘Department of No’
It is a cliché in tech circles to say that IT is the ‘department of no’ – whenever the business wants to do something it gets told all the reasons why it’s a bad idea. Suggestions are always too expensive, too difficult or too risky. O’Haire and others like him argue that this isn’t a sustainable way to operate in 2017.
“If a CIO wants to remain relevant they need to start being the person who helps make things happen, rather than stopping them. They should be innovators and they should be bringing ideas to the board. They should have an entrepreneurial spirit and they should understand and embrace the way the business thinks,” he said.
“They should be able to show how technology can open up new routes to market, or new markets entirely. If you can’t do that, you’re not as valuable an asset as you could be to your company.”
The CIO should have access to the boardroom table and they should win over the respect of business people, and that involves being able to speak the language of business, not just technology.
“They can’t be in there talking in technical terms – it’s got to be in business terms. In a way, It’s a two-way street. If the CIO isn’t facilitated and enabled in this mission then the CEO and the business are missing a trick as well,” said O’Haire.
“Most businesses these days recognise that technology is extremely important to them, so they’d be mad not to have the CIO at the table, embracing that person and making sure that person has a voice to help them understand where technology is going and to do a certain amount of crystal ball gazing.”
“What new techniques, products or technologies exist that could help bring the business forward?”
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