April 26, 2011
As you may know, I recently was named the Research Director for our CIO team — a team of highly accomplished and experienced analysts at Forrester. One of our first tasks as a team was to define the current changes in the technology and business landscape and develop a cohesive view of what this means for the role of CIO. What will it mean to be a CIO in the “empowered” world? As you can imagine, this led to a healthy debate and many different perspectives on what the future CIO role would look like. Here are some highlights from our discussion so far.
What is changing for the CIO?
- Technology plays an increasingly critical role in business success. In Forrester’s Forrsights Budgets And Priorities Tracker Survey, Q4 2010, 52% of the business decision-makers strongly agreed with the statement “Technology is fundamental element of our business model.” Many companies are starting to use technology as a business differentiator, and many businesses rely on technology to provide critical information for making strategic business decisions.
- Empowered technologies make it easy to bypass IT. The empowered technologies — social, mobile, video, and cloud — are rapidly transforming the information landscape. Increasingly, these technologies are easy to acquire and bring into the corporate environment, and many can be sourced and managed outside of IT’s control — making it easy for the business and employees to bypass IT.
What will the CIO need to do?
- Drive business growth and customer engagement. CIOs will be expected to contribute to developing new revenue streams and improving existing ones. Technology will also be used increasingly to engage and reach the customers more effectively. Today, companies like Netflix are able to offer new revenue streams (on-demand video) and enhance existing ones because of technologies like public cloud infrastructure while simultaneously reducing the IT spend substantially. Companies such as Best Buy and Southwest are also starting to engage their customers and enhance their brand loyalty by utilizing social technologies.
- Manage BT demand and orchestrate sourcing and delivery. In the future, the demand for IT resources will come from new and unstructured sources as users from other business organizations source services from beyond IT. This will require input from BT enablement resources, collaborating to expand the traditional use of IT’s portfolios — project, application, and services — to track empowered BT activities for use in resource planning. On the delivery side, empowered BT requires IT to develop advanced capabilities in sourcing and vendor management where some of the vendor management functions and decisions are embedded in the business.
- Move beyond alignment to develop a strategic business technology plan. Thinking of IT as being outside of the business is fundamentally flawed. CIOs must build capabilities to describe IT functions in business terms, generating understanding of IT within the business ranks and shifting the internal IT conversation away from technology and projects and toward a business-capabilities perspective driving business results. As one CIO put it: “Don’t allow IT to use us-versus-them terminology or even call it ‘the business’ — it has to be called ‘our business.’” All this can be facilitated by developing capability maps, focusing on customer satisfaction, and moving from centralized, rule-based IT to a model encouraging collaboration, innovation, and sourcing flexibility.
What will the future CIO look like?
- An orchestra conductor. The main goal for this CIO will be to ensure execution of tasks and activities with precision and harmony. This requires attention to detail and consistent use of standardized processes. The CIO not only develops the vision and strategy but also creates detailed execution steps with aids such as checklists. The CIO is responsible for developing the vision, architecting the solution, and executing on the architecture. This soup-to-nuts responsibility requires the CIO to coordinate with third-party service providers, business executives, and technology experts to work in concert to ultimately achieve the business objective.
- An architect. The architect CIO in this case provides the design and the support to execute on business goals — but does not execute on them him- or herself. The CIO provides the blueprint and relies on the business leaders to execute based on their individual circumstances while still respecting the designated goals. Success depends on close synchronization between the architect (CIO), suppliers (third-party service providers), and builders (business managers), and the ownership is jointly shared. Coordination, communication, and collaboration among these groups are essential.
- A producer.Producers are typically great at assembling a team of creative people who work in concert with each other to achieve their objective. The team consists of people that complement each other’s capabilities and strengths. A producer CIO assembles a team with diverse backgrounds and encourages an open and fluid culture to bring out innovative ideas and push the creative boundaries. This CIO will typically assemble virtual teams with diverse backgrounds and skills to develop innovative solutions for business.
As we shape this future vision for the CIO, we would love to get your input as a technology leader grappling with these changes in your world, and I invite you to join us at IT Forum where we’ll be elaborating on our theme: “Leadership at the intersection of business and technology.” If you're in Europe, join us for our EMEA event in Barcelona, June 8-10.
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