All tactical technology purchasing decisions were once the sole responsibility of the CIO and her team. For any digital needs – from a new laptop to a complete data centre – it was the IT department, and only the IT department, who had the budget and the authorisation to provide it.
The CIO was therefore very much like the head mechanic managing a highly skilled pit team. The team would build and maintain the racing car – possibly even design it too – while someone else would develop the race strategy and drive it on the track. And when success was achieved, the mechanic was never the one who got to stand on the podium holding the trophy aloft.
However, in recent years, even this vital backroom role has changed. Instead of reactively delivering a business’ technology requirements, the future CIO is likely to be a far more proactive and strategic, even visionary, role – helping to reshape established practices, drive meaningful innovation and adapt to new ways of working.
Shadow IT becomes the norm
Shadow IT has long been seen as a serious business risk: BYO devices infected with who-knows-what connecting to supposedly secure networks; rogue software installations creating potential system conflicts; or unauthorised cloud apps increasing the risk of serious data security breaches.
Despite the risks, shadow IT activity has only increased over the years; as department heads and employees seek to work in more flexible and agile ways, the IT department has been relegated to being an obstacle best avoided. The pervading view of IT is slow-moving, locked into multi-year strategic investments that prevent any attempts to quickly pivot to new innovations.
In 2016, NTT Communications found that 78 percent of business decision makers admitted to their employees using cloud services without the knowledge of the IT department. 83 percent expect the use of shadow IT to only increase over the next few years.
The last decade has seen an explosion in XaaS – everything as a service – which has made it easier than ever to implement capabilities within a department without needing to knock on the CIO’s door. Who needs a new data centre or even a physical server when the developers can more efficiently and cheaply fire up a virtual server in seconds (Infrastructure as a Service)? Why waste time and budget researching, installing and maintaining software on local machines – with the inevitable patching requirements and other limitations – when the sales team can just log into a more richly-featured cloud-based alternative with a few clicks?
According to pwc’s July 2017 report on the “Changing role of the CIO”, “(a)n increase in the amount of IT spend fall(s) outside the CIO’s budget (47%) – a symptom of IT’s lack of ability and flexibility to respond to the requirements of the business.”
In short, the CIO and the IT department – often lumbered as they are with maintaining legacy systems and responding to a steady flow of support tickets – are increasingly struggling to keep up with the pace of activity and innovation required by other departments. As a result, the CIO has lost the monopoly on technology decisions.
It no longer makes sense to resist shadow IT or even just turn a blind eye. Instead, the future CIO will need to embrace it, adopting a more agile, less legacy-driven mindset. Rather than operating as a separate silo within an organisation – which can be easily circumvented – IT should be embedded into every department, with the CIO (and his or her team) partnering with teams to establish new policies, systems and more agile workflows that recognise the ways in which we work with technology today. While most managers and teams are primarily focused on their own requirements, the CIO would also have a broader view across the entire company, identifying opportunities and ensuring any benefits, lessons or even data ceases to remain confined to disparate silos.
That way, businesses can benefit from the speed and cost efficiency of XaaS and other shadow IT trends while IT departments can reduce the potential negative impacts.
The future CIO in the boardroom
There’s another reason why CIOs are moving away from slower, reactive, legacy IT models. As the pwc report denotes, “The CIO will be expected to take a seat at the Executive table…”
How can the CIO adequately inform and advise the rest of the C-suite and the board about the organisation’s IT services – not to mention data security – when so many within the business are deliberately keeping the IT department in the dark?
According to a 2017 survey by Wipro Digital, 49 per cent of CIOs believe the biggest obstacle to digital strategies within their organisations is a resistance to new ways of working at the executive level. Meanwhile, 49 per cent of CFOs and 50 per cent of Chief Security Officers in particular reported being overwhelmed by the complexity of digital.
So, it’s not surprising that, in the same survey, half of senior executives reported 50 per cent of digital transformation strategies in their companies were not successfully executed. 25 percent of executives reported a lack of agreement on what digital transformation even means.
The more proactive, agile and strategically-minded future CIO, will be far better placed to drive new innovations and digital initiatives within a business.
A different CIO model
This more flexible, more collaborative future CIO role – with a proverbial finger in every digital pie – does bring with it a few new skills requirements.
The first, embracing BYOD and shadow IT usually requires specialised IT management tools to maximise the benefits and mitigate the threats.
Second, the CIO also requires a working knowledge of the vast array of devices and XaaS options out there.
Third, the CIO needs to have a broader understanding of business strategy beyond the IT department – including marketing, sales, finance, logistics, supply chains, even administration – in order to identify opportunities and drive digital transformation across the entire organisation.
It’s a lot for a single CIO to handle. And the ever-growing demand for specialised IT talent can make skills procurement difficult and costly.
This is why we’re also seeing the rise of the virtual CIO – or CIO as a Service – where a company or CIO outsources some or all of the technical and strategic IT requirements to a contractor or company with the necessary resources or specialisations.
There are other benefits to this virtual CIO approach – not least the flexibility it creates – as a CIO as a Service model can often be scaled up or down as required depending on the scope of the digital initiatives or how far along the business is in its journey towards digital transformation.
- The rise of BYOD, XaaS (Everything as a Service) and cloud technologies mean the CIO and the IT department are no longer technology’s gatekeeper within a business.
- The CIO is expected to have a stronger voice in the executive suite, with a broader, more proactive and visionary approach to how IT may drive future growth and value.
- The future CIO is expected to meet these new challenges by collaborating more with third-party providers, such as virtual CIO and CIO as Service consultants and companies.
Learn more about managing digital transformation within an organisation and how working with the right consultant can improve your chances of success with our free Digital Transformation e-book.