The influence of top technology leadership is extending beyond the traditional IT department and into the wider business, according to the 2017 CIO Survey by recruitment company Harvey Nash and consultant KPMG.
The proportion of organisations that have enterprise-wide digital strategies has risen by more than half (52 per cent) in just two years, according to the global survey of 4,500 IT leaders. As many as 89 percent of CIOs are maintaining or increasing their investment in innovation.
Yet some sense of scale is important. The focus of this digital strategy work is still mainly around building the foundations to enable long-term business growth through technology. More than half (52 percent) of digital leaders, for example, are investing in nimble technology platforms to help their organisations innovate and adapt.
So, rather than working on projects at the bleeding edge, CIOs are helping their organisations to take advantage of new systems and services as they become available. To this end, Jonathan Mitchell, former IT leader and now non-executive chair of the global CIO practice at Harvey Nash, says evidence for the 'Uberisation' of business models appears limited.
Instead of radical change, CIOs are helping their organisations to make the most of innovation and to undertake an acceptable level of experimentation. After years of being told to not fear failing fast, it appears as if CIOs are now embracing risk, all be it carefully. "The organisation that likes to say 'no' is going away," says Mitchell.
Such is the strength of positivity that almost one in five CIOs (18 percent) report their businesses now have 'very effective' digital strategies. These IT leaders, who should be considered at the vanguard of IT-enabled business innovation, tend to be making advances in two key areas: cloud computing and automation across business functions.
Looking forwards with confidence
The role of the IT function in the future will be less focused on operational concerns and more centred on helping the business use technology to enable growth. Engaged CIOs will spend their time building an ecosystem of technologies and pushing service-led business change.
The signs of a move in that direction are already apparent. For the first time in ten years, more than seven in ten CIOs (71 percent) believe the CIO role is becoming more strategic. And it seems as if the skills CIOs have gained during the past decade leave them well placed to help lead the business into the future. "There's a transfer in the role of the CIO from being the person who leads IT to the agent of change in the business," says Mitchell.
Mitchell believes there are still three groups of CIOs: overheads, who report to CFOs; service providers, who manage IT; and the agents of change, who lead transformation. This latter group can encompass a broad range of roles and titles, such as CIO, CDO, and transformation director.
Successful digital leaders are open and outward-focused, helping the business to use a broad range of application programming interfaces and partners from across the technology community, be that providers, startups, or non-competitive businesses.
The research shows CIOs already spend about 15 per cent of their time doing work that has nothing to do with IT. That trend will only become more notable going forwards, as CIOs increasingly spend a growing proportion of their working day outside their traditional remit.
Capable digital leaders might even find chances to head up other non-IT functions, such as operations and facilities. Evidence suggests CIOs are being given responsibility for broader corporate initiatives. These programmes might not necessarily involve IT at all, but they almost always involve change and transformation.
Successful CIOs, therefore, look beyond the IT department. Rather than a creating a standalone technology strategy, smart IT leaders help their organisations develop a joined-up digital business strategy. This requirement to play a central role in strategic thinking means 92 percent of CIOs have joined a board meeting in the past 12 months.
In fact, the number of CIOs reporting to the chief executive is now at its highest ever level. In 2005, just under two fifths (38 per cent) reported to the boss. Today, that proportion stands at 62 per cent. Modern organisations are looking for tech-savvy executives who can provide executive assistance around broader change management processes.
Changing roles for changing times
The high demand for digital expertise helps explain why chief digital officers are once again on the rise. The 2016 CIO Survey showed a slowdown in the appointment rate of CDOs. However, organisations with a CDO increased 39 percent year-on-year.
CDOs are sometimes couched as being replacements for CIOs, yet the evidence points to a more complex relationship. The research suggests blue-chip companies are most likely to appoint a CDO, while appointments are highest in the advertising, media and broadcast sectors, and lowest in education, manufacturing and utilities. When both executives are in-situ in a business, CIOs and CDOs often work well together.
"They eliminate barriers, they work off each other and they create better ideas," says Lisa Heneghan, global CIO advisory service network lead at KPMG, who says successful digital leadership is less about titles and more about the capability of the individual. Companies simply need talented people who can talk about technology in a pure business context.
For executives who fit this mould, the future is bright. IT leaders at digitally-enabled organisations are almost twice as likely to be leading innovation across the business (41 percent versus 23 percent). "There is a wonderful opportunity for CIOs to move up the chain. Digital leaders are being brought into the boardroom to talk about change," says Heneghan.
Such possibilities help to explain why IT leaders have never been happier. The number of CIOs who are very fulfilled in their role is at a three-year high, rising from 33 percent in 2015 to 39 percent this year. "When you're doing something that tangibly affects business outcomes, there is much greater job satisfaction," says Heneghan.
"Digital leadership is moving from a focus on strategy to a new stage of pragmatic implementation. CIOs now need to make stuff happen. There's a sense of optimism because digital leaders are less scared about the future and more excited about the scale of opportunities in front of them."