May 28, 2014
We have been hearing the mandate for years: Align IT with business! The fact that we keep hearing that mandate is troublesome because it means that IT and business aren’t currently well aligned. That fact, combined with some of the emerging organizational dynamics we are seeing make me ask: What is the future of the role of the CIO?
The job of a CIO is straightforward (using the most tongue-in-cheek definition of the word), since there are “only” two primary components of the job. The first is that they must have a deep enough understanding of technology that they can guide the operations and evolution of the IT function. That means keeping operations running, and not having any major security intrusions or major incidents relative to the deployment of new applications. They also are the person who is ultimately responsible for ensuring that their company has the right strategy relative to vendors, cloud computing, mobility, and big data, as well as making sure the organization is making the right choice on new architectures, whether that is an application architecture or a network architecture. The recent firing of Target’s CIO showed a good example of what happens when a CIO doesn’t fulfill this component of their job.
However, as alluded to above, the second primary component of the CIO’s job is to make sure that the IT function is closely aligned with the company’s business and functional managers. A conversation that I had recently with a CIO helps to put that responsibility into perspective: This CIO said that when he was made a member of the senior management team the CEO told him that he was expected to help the other senior managers understand what IT could do for them. As he explained to me, nobody on the senior management team was very interested in hearing about how he had implemented some new technology and saved cost — they looked at that as just being an expected part of the CIO role. What they wanted to hear from him was how IT could help them develop more customer-centricity or be more innovative.
So, an effective CIO needs not only a thorough understanding of technology and deep business knowledge, but also the ability to both influence and lead. There aren’t a lot of people with those skills and that helps to explain why the average tenure of a CIO is roughly four or five years.
To make matters even more challenging, in a growing number of companies the role of the CIO is under attack from other C-level executives. In a previous blog I discussed how many CMOs are driving IT initiatives around critical marketing topics such as mobile commerce or analytics. To put this trend into context, Gartner has stated that by 2017, the CMO will spend more on IT than the CIO. In addition, driven by the desire to adopt emerging digital business models and away from traditional brick-and-mortar, a new type of C-Level executive is emerging: The Chief Digital Officer (CDO). The CDO is typically responsible for the development and management of the company’s digital business models, as well as the management and delivery of the company’s digital assets. Starbucks is an example of a company with a CDO. The Starbucks’ CDO, Adam Brotman, is responsible for Starbucks core digital businesses, including web, mobile, social media, card, loyalty, e-commerce and Wi-Fi.”
One conclusion that can be drawn from the emerging roles of the CMO and the CDO is that some companies have come to the conclusion that they will take at least some of the business-facing component of the CIO role and hand it over to other C-level executives. While it is difficult to see how far this trend will go, Gartner predicts that by 2015, 25% of organizations will have a CDO. If Gartner is correct, then increasingly the role of the CIO is just guiding the operations and evolution of the IT function. That is a very important role, but it is a very different role than what we have come to expect from the CIO.