CEOs lay down the mandate for CIOs to run IT like CEOs of the enterprise, be responsible for profit and loss of their IT and be accountable for overall business.
It would not be wrong to say that any transformation that the IT industry goes through will not be done without the CEO’s intervention. Any progressive minded CEO who sees the value of technology uses it as a weapon against competition, while there are a few who see it as a cost centre. However, what is optimistic about the whole scenario is that most CEOs that the CIO&Leader team spoke to find IT to be an enabler of business. CEOs take on CIO role change CEOs are cognizant of the evolution of the role of the CIO and have set their expectations accordingly.
Emmanuel Babeau, Deputy CEO in chargeof Finance and Legal Affairs, Schneider Electric, sees the transition in the IT role and says that it has changed the way of doing business across industries. “We are practically doing our business through internet, and there is a change in the role, as the CIO is taking a 360 degree approach in handling business requirements,” says Babeau.
Alok Kumar, VP& Managing Director, Sears Holdings India, observes that the new roles such as CTO and CSO emerged to help the CIO take a more business-focused role than he did a decade back. “Going ahead, this role will change further and might even change its name from CIO (Chief Information Officer) to CTDEO (Chief Technology and Digital Enablement Officer) or the likes,” says Kumar. According to him, the need for speed, integration and data mining for fast and accurate decision making is no more a competitive advantage, but basic business hygiene to compete in the market. “CIOs will have to evolve to ensure that they enable their businesses in achieving that and beyond, utilising the global ecosystem and methods they did not attempt earlier,” remarks Kumar.
The real value of CIOs will come from the fact that they are the ones who understand the digital landscape of their businesses well and they should look out for all opportunities for innovating solutions to help business save and earn, observes Kumar. K Vaitheeswaran, CEO, India Plaza, expects the CIO’s role and influence to decrease as trends like data analytics and digital convergence will be acted upon by CTOs and CMOs. “In fact, over the next 10 years, the CIO role may not exist in the current form. CIOs in the future will be business leaders and have to take responsibility for business metrics,” he says.
What do I want from a CIO?
Interestingly, CEOs have set very high expectations for CIOs and consider them business drivers who would be equally responsible for driving profits. “In an organisation such as Schneider, the CIO plays an important role and I as a CEO have not disagreed with our CIO on any aspect. However, I would expect the CIO and team to be realistic in approach in terms of laying down their IT and business priorities,” remarks Babeau.
Sears’ Kumar observes two major changes happening in parallel in the industry. The first is technological innovation, which is resulting in solutions which make technology easily available, cheaper and faster directly to the end user. The second one is the high degree of technological awareness among non IT business users, who were earlier almost tech illiterate. These two changes will help shape the role of the future CIO, who will be highly strategic and will have the power to shape the company’s future.
According to him, the CIO will become an educator who will create awareness among the business leaders on how they can be more effective with technology. "The CIO of the future will not be one who will be treated as being in a support role, but one who will shape business plans and solutions along with business leaders,” explains Kumar.
“In effect, CIOs will be running their organisation like any other business CEOs and will be responsible for the P&L of their IT units and will have accountability towards the overall business profit and loss,” says Kumar.
CIO Performance Metric
Besides having broad expectations of CIOs driving growth, CEOs expect certain critical actions to evaluate performance. Vaitheeswaran considers time to market, focus of product development, market expansion, and shift to cloud to be some of the new KPIs for CIOs, all different from the current focus.
Alok Kumar says that the balance sheet and the company market reputation are the key responsibilities of the CIO. They will have to own these two key parameters in their capacity to be truly proud of whatever they do.
As the business head, Babeau does have certain mandates clearly articulated to the CIO. Babeau says, “The performance of the CIO and team is evaluated on the parameters of how much the CIO would analyse cost versus sales ratio outcome, keeping the investments low and driving good savings without compromising on the required technologies and ensuring customer satisfaction against all odds and challenges,” points Babeau.
Best Techniques to Influence and Inspire Change
A history of being a result oriented individual will have a huge impact on influencing change within the enterprise. CEOs clearly articulate that it is time that CEOs underwent awareness on how important technology can be for their organisation’s growth and help the CIO role to grow more strategic.
“It would be better if, by design, the CIO runs the IT department like a company and acts like a mini CEO. This will help the CIO to be more result oriented and forward looking, because the motivation to earn will push them hard to be more customers centric and more open to new ideas,” says Alok Kumar. He argues that his experiences finds that creating a leadership driven organisation instead of leader driven organisation helps instill the culture of innovation and openness. “The best way to influence change is to understand the areas of spend, drive automation to generate efficiency, create value standards and ensure customer experience both internally and externally,” says Babeau.
According to Vaitheeswaran, the best way to lead, inspire and drive change is to seek expertise and ask for help from people within or outside, irrespective of age or level.
CEOs' Take On Tech & Business Changes
The CEOs are quite deep into undertstanding the technological changes and are clued into the convergence of devices. Schneider's Babeau opines that technologies that are customer centric such as CRM and mobility which brings value to them is paving way for the new changes for which the CIO needs to gear up to address the criticalities. Vaitheeswaran expects innovations to happen around convergence of devices, enhancements in cloud and mobile computing areas and 3D printing catching up in a big way.
"Existing data capture and measurement systems will get outdated and business will be forced to re-design fresh predictive apps for data analytics to determine consumer behaviour and Internet of Everthing (IoE) will become more real starting with wearable devices, control of appliances through smartphones among others," says Vaitheeswaran. Besides, he says cloud will become popular in usage but large companies will lag behind SMEs in adoption as existing applications will have to be re-written for the cloud which will cost time and effort.
The focus in 2014, as Alok Kumar observes will have every business continuously looking forward to reduce cost of operations and improving productivity. However, the not so focused element of innovation will start taking centre stage in every industry in 2014. "The survival for any business would now depend on how effectively the teams innovate and bring their ideas to market faster as the business models which were built over years are getting threatened and sometimes eliminated with single innovation," says Kumar. His main concern is that as the complexity of business is increasing along with ever increasing demand for better value of the products and services, the only way it can be fructified is through effective and innovative use of technology.
Some of the technologies that Kumar expects to take a leap would be PaaS, SaaS and IaaS which are helping the business. However, the idea is the get the CIO to scale up faster and create a relevant value zone quickly.