Research shows that the CIO’s role is changing—rapidly.
The rise of new technology is transforming the way we work—it’s no longer a question of when or if organizational leadership will change as a result, but how. One of the most significant shifts in roles is occurring for the CIO. As the technological environment changes, it is inevitable that adaptions to the role of the CIO—and the interplay between the business and IT organizations—shift as well.
In a series of conversations with IT and finance executives across the country, we discussed the changing dynamic between business and IT, and the increasing expectation for the CIO to convey business value between the business and IT organizations. The research reveals that the CIO must now act as a Value Broker—and that this contributes to the transformation of the CIO in 2015 and beyond.
Over 8 months, we conducted one-on-one calls and facilitated group discussions with industry-leading IT and finance executives.
Months of Research
IT and Finance Executives
Top Industries Represented
Executives in Participation
The group discussions were held in cities across the country, including:
A CIO’s Perspective
Andrew Wilson, CIO of Accenture, and Chad Quinn, CEO of Ecosystems, discuss the changing role of the CIO.
The business is bypassing internal IT to work directly with external providers.
The rise of shadow IT and organizational consumerism are affecting the dynamic between business and IT, requiring the CIO to alter its function to effectively lead internal stakeholders and coordinate external vendors.
As of 2014, 70% of business executives are willing to run their own technology projects, without the involvement of internal IT (CEB Research).
IT budget control is shifting to the business.
Not only are 70% of executives willing to run their own technology projects, but they have the financial resources to do so as well. Gartner predicts that 90% of the IT budget will be controlled by the business by 2020. At the beginning of the decade, the business only controlled 20% of the IT budget.
. . . But only 43% of IT investments are achieving full value.
Gartner conducted a study of 2,053 worldwide CIOs, managing a total of more than $230 billion in IT budgets. Results showed that organizations achieve only 43% of technology’s business potential.
That represents a significant gap in the business’s ability to realize the full value of technology investments. With the business in control of the IT budget, the CIO should expect to hear an increasingly common question from the business to IT: “For the check I wrote you, what value did we achieve?”
The CIO’s ability to maintain a strategic role in the organization will depend on his or her ability to clearly and sufficiently answer this question—and provide the structure to ensure that the full value of each investment is achieved.
The CIO has recently been considered a “service broker,” where the focus is on “connecting business units with the best technology.” Now, there is an additional shift required of the CIO—the CIO must become a “value broker” between the business and technology.
The emerging role of the CIO not only connects the business to technology, but can also advise the business on strategic connections and convey the value of these connections to diverse groups of internal and external stakeholders.
To merely connect the business to the appropriate technologies is no longer enough—the CIO must also understand and convey the value of connecting the business to providers and services, and ensure that investment value is achieved.
4 Trends for the New CIO
Four specific trends emerged from our research, based on challenges and opportunities faced by today’s CIO. Now, the CIO must effectively integrate various parts of IT, enable aggressive innovation, serve the organization, and convey value. All of these trends characterize the role of the CIO as value broker. (Click to expand.)
The CIO will need to enable aggressive innovation by providing the overall architecture needed to support business strategy. The focus is no longer on specific technologies but instead on the overarching strategy for implementing various technologies to create a unified and efficient whole. Tactical requirements are further in to the IT organization.
The CIO needs to deploy technology that is both effective and easy to use. Internal stakeholders will be the CIO’s “customers”–looking for efficiency and speed.
The parts within the IT organization must be integrated to work together effectively. CIOs will be expected to reduce the amount of time it takes for this to occur–from months down to weeks or even days.
The number of providers to the business is increasing, and budgets are shifting toward the control of the business. For the CIO to truly enable the business, there must be clear value definition for each investment.
5 Essential Traits of the Value Broker
Focuses inside and outside the organization.
The CIO must focus inside the organization in order to understand the true business problems that need to be solved. However, the CIO also needs to maintain a thorough understanding of current technology trends and best practices outside of the organization in order to identify the best solutions.
Not defined by “power.”
A new mindset accompanies the shift in the CIO role, as the value of the CIO is no longer determined by the number of people in the IT organization or the amount of assets over which the CIO has control. In fact, as companies arise that do not have physical assets in the traditional sense–think Airbnb and Uber–this shift is more apparent. Now, the CIO’s value remains in his or her ability to connect the business to technology and convey the value of these connections.
Advises the business.
In order to the CIO to advise the business on the best technology solutions, the CIO must have a thorough understanding and opinion of the technology available. In doing so, the CIO serves as an adviser, problem solver, and strategic expert.
The CIO must orchestrate vendors externally, and market the value of the solutions internally to the business.
Markets IT value to the business.
In order to convey value, the CIO has to approach each IT investment as a project that needs to be communicated to internal stakeholders. Achieving full value of an investment requires communication of the value that is intended, with clear outcomes and owners, and frequent communication back to stakeholders on project value.