Why do so few CIOs drive digital transformation?

Clue: It has nothing to do with their capability

Why do so few CIOs drive digital transformation? - CIO&Leader

Can the CIO drive digital transformation? Not surprisingly, you hear an emphatic yes, when you ask this question to the CIO community.

The question is invariably interpreted as one related to capability. So, for the CIOs it sounds something like this: Do today’s CIOs have the skills and competencies needed to drive digital transformation in organization? They think they can.

But data tells you otherwise. Less than 10% of Indian Chief Digital Officers or Heads of Digital Transformation in Indian companies are CIOs. Does it follow that the CIOs do not have the skills and competencies to drive digital transformation?

Not necessarily.

The Real Reason

A recent research that we conducted on digital transformation in some of the core sector companies in three of India’s top business groups—Tatas, Mahindra & Mahindra and Vedanta/Sterlite—threw some interesting trends.

One of the few points on which there seem to be a near-complete consensus among digital leaders, other CXOs and consultants is that only a senior, dedicated executive can drive digital transformation.

‘Dedicated’ is the keyword here. The current thinking is that driving digital transformation is a full-time job. It cannot be just another KRA for some executive!

It is not too difficult to explain why. A typical transformation journey, especially in a traditional business, could involve a lot of time and focus to prepare the organization before it could leverage technology.

“60-70% of the transformation journey is actually about bringing a culture shift,’ says Nischal Gupta, Chief Transformation Officer at Sterlite Tech. Almost all executives we spoke to identified culture shift as the toughest part of the transformation journey that requires undivided attention.

That can be manifested in a lot of discussion with other C level executives, creating communication programs for all employees, branded programs and a lot of similar stuff. Tata Steel, for example, started with a reverse mentoring program where 16 senior executives agreed to be reverse mentored by the youngsters. There was another program called Digital Enthusiastic Exploration Program (DEEP) that involved 60 people immersing in technology. There was another called Digital Darshan. All these programs do require considerable time and focus.

That could give a clue to the answer of our original question—why so few CIOs are driving transformation?

The organizations are not convinced that an executive who is also monitoring a data center migration or firefighting a ransomware attack could effectively have the kind of focus that transformation requires.

Gupta of Sterlite Tech says one of the specific objectives of their transformation journey is “to free up the minds of every leader to focus on value addition rather than getting stuck in the business as usual in the day to day basis.”

How can you do that, if you yourself are stuck in business as usual?

“It is not about CIO or CMO. It is about being involved in any regular operational role and still being able to carry out transformation. It is very, very difficult,” said a senior executive in a consulting firm.

What it means is: a CIO cannot be entrusted with digital transformation while (s)he is still in charge of data center rollouts or enterprise software implementation or laptop purchases.

For some strange reasons, Few CIOs are willing to give up that role. As discussed above, a dedicated resource is a non-negotiable requirement from the CEO and board.

Put these two together and you know why so less CIOs handle the job.

So, the question of whether the CIOs have the skills and competences to lead the transformation journey does not even arise when the CIOs themselves are not so willing!

But why are the CIOs so keen on continuing with the nuts and bolts? “Many, for some reason, think their importance in the organization is directly proportional to the budget they handle,” says a CIO-turned-consultant.

Despite being well-sensitized to the fact that their real contribution comes from business value they create, many CIOs cannot just think of giving up on their traditional role.

Exceptions

There are examples of people who have given up that nuts-and-bolts role and are successfully steering transformation. Take Amitabh Mishra, CDO of Sterlite Copper or Deepak Konnur, CDO of Tata Power. They are career IT professionals but have today taken up CDO roles. One common factor, though is that they have stuck to one/similar industries and hence the understanding of business dynamics of the industry segment(s) much better. In case of both Sterlite Tech and Sterlite Copper, the IT Heads do report to CDOs.

Then, there are industries that where the outlook towards technology and new ways of working is fairly mature. Take for example, technology companies themselves or investment banking business or online business.

Those industries already have a culture that is very much in sync with what digital needs. So, transformation in those industries are a lot more a collection of specific tasks. In such industries, a dedicated person may not be an absolute requirement. In KPIT, for example, CDO Mandar Marulkar oversees both enterprise IT and digital transformation.

But those kind of examples is few.

In most organizations, CIOs do not drive transformation journey and it has little to do with their competence levels and more to do with their unwillingness to give up “the control of the big budget”.


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