CIO in technology world

CIO tending towards CEO?

Been quite a journey for the IT /Technology industry just supporting businesses to gradually, but definitely, starting to hand hold business to directions like never before. In the distant past (at least feels like that) there were the EDP (Electronic Data Processing) departments in companies created to provide support to the Finance folk, and then gradually to point of sale. Over time, companies figured the role of a CIO with the proliferation of technology across their operations. Technology based companies started having a CTO too. Traditionally and because of the support nature, IT continues, in some cases,  to be treated as a ‘cost’ and also report into the COO or the CFO. Happens in many a large multi-billion dollar strategically stagnant corporation. However, we do know (and see this every day) that the world has moved on and there is a clear and present danger for these mammoths that they will be left behind in the race and die out.

Technology today plays a more strategic function, and in many organizations it walks hand-in-glove with business. But, in many others, it leads business designing new offerings or creating new ways of doing business.  Many tech startups have opened up new business areas or have taken existing business models through a discontinuous shift by putting technology in front. Technology and business strategy aren’t really separated anymore and that is why, many of the good CIOs today talk directly to the organization’s business strategy.

The symptoms are everywhere. The WSJ, if you recall, used to have a section called the Marketplace. Sometime, early last year, they changed the name of the section of Business & Tech. The WSJ and other predict that “algorithms will increasingly guide nearly every function in the modern enterprise,” resulting in the elevation of CIOs everywhere and “valuations for Silicon Valley startups [that] march ever higher.”

The word “digital” came with no predefined boundaries and it started with smashing boundaries in the world of entertainment and content driven sectors. As it proliferated to other sectors, we saw there were no industry based rules or limitations. No holy cows, and nothing sacrosanct. Every business, now, is a technology business. Disruption caused by technology is blurring or even eliminating rigid industry boundaries very rapidly

This change is as much external as it is internal. Compartmentalization of data was created in organizations to support divisions and subdivisions in the company. New world organizations are now data driven and barrier less;  many organizations are transforming to be so. Now, data flowing through previously impregnable boundaries can cause these departmental boundaries to dissolve and in some cases even the traditional functions to disappear.

I remember reading an Economist survey a year or two ago which had correlated the strong link between a CIO’s role to the company’s success at innovation. CIOs of strong innovators (organizations) were noted to be more likely to be the principal strategist for key strategic technologies, especially consumer-facing mobile applications, as well as online learning, enterprise social networks, big data analytics and social media. Essentially, digital. Of course, that is only one part of the world of digital. You know that.Forward looking organizations are starting to transform their business culture to creativity, collaboration and innovation. Many of these service transformations are made possible because of investments which are CIO sponsored.

An industry survey run last year (by Harvey Nash) showed that the shift is quite underway, with 66% of CIO projects are those which are designed to make money (as opposed to just support) and for 34% of the CIOs surveyed, digital is now. Some 48% of the CIOs expected their role to change in the next two years. 32% of the CIOs surveyed now report directly to the CEOs, a jump of about 10% over the last year. That takes us to the topic of the next jump.

It’s no tsunami, but it is starting to happen. Mid-year, last year, former Burger King CIO Raj Rawal became CEO of Fresh Diet, a small meal-delivery company. Then, Guy Chiarello quit as CIO of JPMorgan Chase to be president of First Data, a financial services powerhouse. Companies in real estate, oil, services and healthcare have also appointed CEOs who are former CIOs.

Today, monster forces of social media, mobility and analytics technology are causing tectonic shifts in the business environment. The tech shops in smart organizations are in the forefront because IT is now the number-one tool for formulating and executing strategic advantage. A smart CIO using data a and technology smartly to create new revenue may be well-positioned to lead a company. The CEO job has never looked more attainable for a good CIO.

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