Tech is stuck in the mud. Here's how to break free again
While it's widely acknowledged that CIOs are now in a stronger position than ever before, only a few digital leaders possess the characteristics that the successful business of the future requires.
Buoyed by recent digital transformation successes and a new round of IT spending, which analyst Gartner says will increase 5.1% to reach $4.5 trillion globally in 2022, digital leaders should be grasping the opportunity to extend their remit into new and exciting areas.
Unfortunately, many CIOs are still on the back foot – rather than being progressive, research from Deloitte and Workday research suggests many IT leaders are too reactionary. So, what's gone wrong?
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One big issue is the pace of change. CIOs have spent years fighting for attention – while they talked to the board about the dangers of disruption, the business baulked at the idea of investing more and more cash in a technology function that it rarely understood and often undervalued.
Consultant Deloitte and tech company Workday surveyed 600 executives globally and found that just 8% of CIOs strongly agree that the role of the IT department is increasingly strategic, that incremental technological improvements are crucial to long-term success, and that their organisation possesses high levels of data savviness.
Many IT teams remain held back by stodgy processes: almost half (45%) of CIOs say they need to innovate quicker and 43% are under pressure to create greater enterprise agility.
The research also found that progressive digital leaders behave differently to their peers in three key areas: exploiting data to fuel decision-making processes, collaborating with finance to drive transformation, and adopting an agile and incremental approach to digital transformation.
"A progressive CIO builds agility into not only their technology and their architecture but is creating an organisation that's responsive and can adapt to change," Workday CIO Sheri Rhodes tells ZDNet. "They think carefully about how work is done, in terms of working in product teams and adding value."
CIOs have proven during the past two years that digital transformation isn't a topic to be avoided in the boardroom but is instead vital to the long-term success of the business.
The task now is to finally break free of the perception that IT chief is a maintenance role and to prove (again) that the CIO is the key person for leading cross-organisation and digitally enabled change.
While just a small number of CIOs are on the front foot right now, the report suggests there's lots of opportunities for IT chiefs to become more progressive.
And the key to making this shift, says Rhodes, is much more about adopting the right leadership culture than it is about implementing the right systems and services.
"It's about creating an operating model today, and the business processes that support that model, which can flex with the requirements of tomorrow," she says.
Rather than relying on big budgets and advanced technologies, the research reports that progressive CIOs focus on propagating three key cultural traits – mindset, agility and collaboration – that can and should be adopted by IT leaders and their teams.
Other research also alludes to the critical importance of culture. Almost 80% of IT chiefs believe their organisation is already falling behind competitors because of an inability to keep up with the pace of change, according to the 2021 Global CIO Survey from Logicalis.
The key to success is building a cross-organisation culture where employees – whether they're in the IT team or another business function – can surface and test new technology-based ideas quickly.
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When new demands and unexpected challenges arise, an agile approach means organisations can absorb the impact and find ways to not only survive but to thrive, agrees Rhodes.
"You can't think of everything – no one would have predicted the pandemic would happen to the extent and duration it has. But organisations can cope with change by building something that's flexible, by breaking down silos, and creating cross-functional working."
For other digital leaders looking to be progressive, Rhodes stresses the importance of building strong bands with C-suite peers.
"Success is about developing that progressive attitude and helping to shape the business strategy and internal partnerships," she says.
Progressive CIOs are particularly collaborative – the research says 60% describe themselves in this way compared with 44% overall. In fact, 90% of progressive CIOs say their IT departments are now much more integrated into the business than they were 12 months ago.
These forward-thinking CIOs focus on ensuring their priorities are strategically aligned with the wider business and the objectives of other members of the C-suite.
The survey suggests that one of the most important relationships for CIOs to cultivate is with the finance chief. As many as 83% of CIOs believe they will miss growth targets unless IT and finance work more closely together.
As other experts have suggested to ZDNet, the CFO and CIO relationship is the connective tissue that helps organisations understand what they will need to do to be successful in the future.
In an agile business, where people work together in smaller groups on multiple targets, a strong relationship between the CFO and CIO helps ensure that a myriad of projects and investments in technology are creating value across the organisation.
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In the case of Workday's business strategy, Rhodes says she has two key techniques for ensuring that the IT department collaborates effectively with the CFO.
First, quarterly investment reviews, which demonstrate that the team is progressing in the right way. "We have objectives and key results and those cut across the business, so that we're looking at the same outcomes and we're measuring them in the same way," she says.
These quantitative results are then backed up by qualitative assessments. Rhodes and her IT team spend time building relationships with the rest of the organisation, listening to their requirements and deciphering the business context for transformation.
"That's about understanding the thought process behind why the business might need to change direction or might be thinking differently. So, I think success comes from a combination of two things: maintaining conversations, and then supporting that ongoing relationship with structured mechanisms for measurement," she says.