Historically, the role of the CIO has been focused internally; their job was to "keep the lights on" by provisioning technology, ensuring security best practices were maintained, and executing on new solutions as other divisions in the organisation needed them to do their work. The CIO headed up a unit designated as support to the rest of the organisation.
This has been changing in recent years as organisations look to technology-based innovation as a path to competitive differentiation, and as their defence against disruption. The CIO role has consequently become more strategic, with a greater external focus. The Gartner 2019 CIO Agenda Insights: Secure the Foundation for Digital Business, shows that this trend is accelerating. Now 55 per cent of organisations report that they are shifting their operating model from 'project delivery' - to continuous product lifecycles, and nearly half have changing their business models to accommodate digital business.
Indeed, the aspiration to participate in digital business is so strong that the top two priorities for business leaders in 2019 are digital initiatives and business growth, according to Gartner's most recent global CIO Survey.
Technology's role at the centre of everything
Without technology – and a strategic CIO – modern organisations struggle to achieve their business objectives. Gartner research shows that by 2019, 81 per cent of organisations expect to be competing mostly, if not entirely, on the basis of the customer experience, or CX. Furthermore, 45 per cent of those in marketing – where responsibility for CX usually (because the CEO should be accountable for CX) lies – believe that technology is a top-three requirement for delivering leading CX. In other words, CMOs are looking to the CIO and his or her IT team to help them meet their priorities.
Technology and digital transformation continues to escalate in importance as a dependency in COO, CFO, and other C-suite executives' business plans, as they seek out opportunities for innovation, defend against digital business competition and cyber-security threats, and drive organisational productivity and efficiencies. Exploiting 'big data', artificial intelligence (AI), robotic process automation (RPA) and the Internet of Things (IoT) offers opportunities for positive self-disruption across the entire enterprise. However this is not a secret: most organisations are pursuing similar paths looking for digital business 'sweet-spots'. For example, Gartner's CIO Survey has recorded a massive 270 percent increase in organisations planning to invest in AI initiatives in 2019.
The CIO today needs to know the drivers and business objectives of each of their peers in the C-suite team, and work closely with them as both an enabler and a thought leader. The CIO today has a responsibility to help their peers navigate digital business. Core to the success of the contemporary CIO is their ability to articulate technology trends, generate new ideas, and deliver agile business solutions at the 'speed-of-light' pace of digital business.
"CIOs are in the position where they understand better than anyone in the C-suite what the digital era means. They understand how the changes and opportunities presented by technology have come about, and how quickly the space can change," Gartner Research Director, CIO Advisory Group, Jenny Beresford, said.
"CIOs also understand change, having lived through constant and accelerating change in IT for decades. Because IT is the incubator for digital business, initiating and enabling product, process and system change, CIOs can understand how the wider organisational culture needs to adapt, so they can match the speed at which digital business opportunities present. Because they're right at the centre of this, CIOs need to step up and share that knowledge and experience with their C-level colleagues."
The centricity that CIOs have to the technology-driven changes in the current environment also means they need to be a direct report to the CEO, and have access to the Board, Beresford added. "There's an acknowledgement that the digital era requires the person that is leading the technology function to be very close to the CEO, at the heart of the organisation. Additionally, there are still many Boards that lack IT experts among their numbers and CIOs need to step up to that responsibility."
The CIO: A role in rapid transition
The enhanced role that CIOs have within organisations, and their shift from the internally-focused and supporting role to externally-focused and central role has happened quickly. A good local example can be seen in financial services: even ten years ago, technology was not considered a core priority and opportunity for competitive differentiation to Australian banks. It was only when Michael Harte, the then-CIO of Commonwealth Bank, commenced a $1.1 billion core transformation exercise that Australian financial services began competing with technology. That initiative by CBA has led to numerous product-driven innovations, particularly around consumer applications and touch points with the bank, that gave it a significant competitive advantage. One that other banks (and CIOs) quickly raced to compete with.
Harte's core transformation project only commenced in 2008. Just as the original iPhone only released 11 years ago, in 2007, and yet now it's impossible to imagine life without that kind of smartphone, it's now difficult to comprehend a time in which a CIO was just a support role within a corporate environment.
'"Ten years ago, the CIO rock stars were rare and a little outrageous, but now it's understood that global markets are increasingly disrupted dominated by digital giants exploiting technology innovation to transform customer experience," Beresford said. "The companies that are turning heads in the market are founded and led by entrepreneurial technologists like Elon Musk, Jack Ma and Jeff Bezos. It's technologists - and CIOs if they have the courage and credibility - that are the ones creating value".
Now that technology is at the heart of competitive differentiation, however, the newfound importance of the CIO won't be going anywhere. As the Gartner 2019 CIO Agenda: Secure the Foundation for Digital Business insights shows, CIOs need to develop a new set of skills around their new external and product-delivery focus, and those that do will put their companies in a far better competitive position.
For more information on the evolving role of the CIO in organisations, download the Gartner CIO Agenda Insights.