As the push for digital transformation reaches an all-time high, CIOs are increasingly focusing on bringing their entire organizations into the digital future, all while preventing even the smallest hiccup in operations. It's a tall order.
In conversations with various CIOs around the world throughout 2016, I've noted several widely consistent ongoing threads as well as some emerging IT leadership trends that have highlighted the challenging, highly varied, and increasingly momentous job it is to head up technology enablement within a large organization today.
While the job of CIO has always been split between introducing new technologies to improve the business while keeping it all running and secure at the right cost, never before have we seen such tension between the desire for organizations to seamlessly as possible reinvent themselves digitally while maintaining strict business continuity with the highest degrees of security against threats, both within and without.
While there has been much talk recently about the CMO or the Chief Digital Officer (CDO) in leading digital transformation in organizations, the reality is the responsibility for it still falls mostly on the CIO, who has by far the largest technology portfolio in the organization and a role that is -- even if it's imperfect -- the most aligned with the type and scale of the changes that have to be made today.
People change is the objective of IT transformation
As these latter changes are not primarily technology related and much more connected to the human condition within our organizations, many IT leaders struggle with the skills they must cultivate and very different roles they must play. In short, it doesn't matter if you change the technology that is rapidly becoming the business, if you leave your people behind in the process.
Of course, today's contemporary IT leader must certainly still preside over emerging and disruptive technology trends, more so than ever before in fact, but in doing so must help the organization rapidly make the other related non-technology changes required to keep up with the times and deliver a relevant and competitive set of business services to the marketplace.
It's telling that in virtually all of the digital transformation surveys, such as MIT Sloan Management Review's well-regarded analysis of over 1,600 respondents, all but one of the impediments to digital change are people-based, from lack of skills and organizational urgency to poor corporate vision and political turf wars.
If that wasn't enough, ironically, budgets aren't nearly enough either. When I've broken down IT spending by industry in previous analysis, it's clear that technology companies far outspend their less tech-centric counterparts, by more than double the cross-industry average.
The top issues for CIOs in 2016
Yet these are just a few of the top-most issues in the CIO's bailiwick. There are a host of other items top of mind this year that are important to consider below from my industry conversations:
Increasing pressure to dramatically improve customer and brand experience, while working across the aisle with the CMO to do it. Getting a organization's digital experience to perform at a high level is perhaps the biggest single differentiator in corporate results when it comes to digital today. While the CMO will want to be involved, the CIO must oversee the cross-functional development of a world-class market-facing digital experience with a combination of legacy and emerging customer-facing tech well beyond the marketing experience and deep into customer service and operations. This is no small hurdle, and new strategies must be brought to bear.
Worries about cybersecurity, including a potentially career-ending public hack. This has become a top concern to the extent that some IT management surveys put it at the very top of the spending list. Security is pulling focus away from other digital priorities, with not much to show for in terms of new value creation, making today's relatively flat IT budgets an even greater challenge. CIO are seeking creative ways to manage security and looking for IT security breakthroughs to help them spend more time leading other top-level priorities.
A growing chorus from the CEO and the board to get going with digital transformation, but without much new budget to do it. Given the aforementioned data on IT budgets, most organizations would have to increase their IT spending 50% to 100% to match what technology companies spend, yet the CEO is often the one that is pushing most for full-on digital transformation, to the point that more of them are deciding to lead it personally according to a recent survey by Gartner. CIOs are seemingly in a tough spot, yet there are decidedly new ways now to spend IT budget far more effectively than most organizations do today, by thinking like a digital native and taking inherent advantage of platforms and novel new ways to tap into cost effective technical innovation at scale.
The mass shift to the cloud, the push to go hybrid and then public, and then return the savings back to the CFO, who is often asking for it back. Some time between 2017 and 2018, most IT workloads will be in the public cloud, and plenty of data show that public cloud is right around 30% cheaper than private cloud in conserative terms, all costs considered. Will the CIO get to spend those savings on digital transformation and not pass it back to the business? That's what the CIO will have to manage closely over the next two years.
The rise of new tech and IT approaches so fast (containers, mobile, new cloud stacks, devops, bimodal, etc.), that many existing staff skills are badly out of date. If you peruse my enterprise technology trends to watch for 2016, you'll see that only continuous learners in both IT and business will be ready for the future of technology. To address the growing IT skills gap, especially in areas like information security, data center management, and big data, CIOs are forecast to tap into the so-called "gig economy" extensively in the next several years to find the additional talent they need to propel their organizations forward into the future.
Threat of digital disruption on the doorstep today, rather than 3-5 years down the road. A recent study published in Harvard Business Review notees that most executives expect digital disruption within a year, a far shorter window that previously, meaning most C-Suite leaders can't kick the can down the sidewalk to the next round of leaders. The implication: CIOs now need contingency plans, beginning this year, to face digital newcomers in their industry that rapidly drain marketshare away.
Operations quality still has to improve, while doing all the of the above. Competition and operational quality standards set by the public cloud are raising the bar for existing IT departments.
Digital turf wars with the CMO, CCO, CDO. Other C-suite leaders are busy with their own technology plans, often in silos. The CIO is well situated to be the ultimate orchestrator enterprise-wide IT, if they have the right approach that won't fall back to the IT backlogs of old by looking to cloud partners, fostering a developer network to create the additional needed apps for the business, and partnering with startups.
Coping with the rise of shadow IT and LOB tech investment such that in 2017, significantly more than half of all IT will be outside of IT control. Shadow IT as a source of innovation and a driver of creative security solutions is the mantra of the year, yet most CIOs grossly underestimate how prevalent it is. Smart CIOs will use shadow IT as a force for digital transformation at the edge of their organizations, while providing workers with usage guidelines and infrastructure to make them safe and secure.
Widespread pressure from C-Suite, industry, and LOBs to lead the business too, rather than just technology. The CIO of 2016 is focusing on becoming a leader of the business, just as much as the technology. The expectation now is that the CIO should be able to take a board seat and direct the future of the company with even more effectiveness than the rest of the board, because of the understanding of where and how new emerging technology can take the company into new markets.
Increased pressure for greater staff diversity, especially gender diversity, while female tech leaders remain in very short supply. Women still only hold 22% of technology positions, and while laudable efforts have been made by certain companies like Intel and Facebook, most CIOs have a long way to go to close the gap, and many will spend considerable time and effort focusing on it this year.
Increased pressure to be compliant with a growing body of often difficult to understand or enact international data protection and privacy regulations. New rules like the EU's complex new General Data Protection Regulation (GDPR) is coming in 2018 and will affect businesses around the world. Other countries outside the EU are rapidly developing their own and large enterprises will have a data privacy regime they will have to comply with that will become quite onerous in its own right, just to continue doing business as they do now. CIOs will need to plan ahead for strategic ways to get economics of scale, often by tapping into cloud services that already have compliance baked in.
The CIO as the Face of the Organization's Future
As I've noted recently, the the infusion of technology into almost everything in the business world is inevitably going to shift and remake much of the C-Suite. However, as we've seen with an emerging generation of IT leaders, we're genuinely seeing a new sensibility from those leading IT. As the CIO of the largest employer in Wisconsin, Aurora Healthcare, Preston Simons said to me on a recent episode of CXOTalk that I hosted with him and fellow ZDNet columnist Michael Krigsman about the pervasiveness of tech being such an enabler today today:
So if information is power and information is then cascaded up and down the enterprise, then is there a loss of feeling of control. And you've got to be open to that. You've got to be open to which is kind [I meant] when you asked me the mandate. My mandate is to for IT to be transparent.
These are big changes in the formerly heavily controlled world of IT that is now being pulled apart and remade by rapid tech change, digital disruption, and technology pervasiveness. The CIO that is a combined business/IT leader, open to transparent change using new methods, a proactive includer, ready to think like a digital native, and obsessively focused on stakeholder happiness likely has the best chance of succeeding this year.
Note: This post was sparked by an internally posted question by fellow Enterprise IrregularDavid Dobrin about what concerns CIOs today, with some items contributed by the terrific HR thought leader Naomi Bloom. Thanks to both for helping bringing about this conversation.