The CIO is an evolving role and changes in technology and budgets, which are encouraging business departments to demand and use IT without consulting the IT department, mean the CIO’s role is shifting more towards governance.
While chief financial officers (CFOs) are exerting more influence on IT services contracts as cost-cutting remains the main driver, chief marketing directors are becoming having more influence on IT budgets because software such as customer relationship management (CRM) becomes critical to customer retention.
Then you have the rise of the digital expert. CIOs need to understand and be able to manage the changes being brought by digital technologies or face being replaced.
Research from Forrester said CFOs are becoming increasingly influential over IT services spending in Europe with over 40% of respondents in Europe and North America believing CFOs will gain more influence over the next 12 months. This compares with 35% that said the same thing a year ago. Some 44% said CIOs would have more influence over IT spending over the next 12 months, which was a slight decrease on the previous year.
A recent report from local government IT organisation, the society of IT managers (Socitm) said a lack of understanding of digital technologies and their use in business might lead to IT leaders losing control.
"By remaining passive against a background of profound change in the operating environment, ICT managers risk being excluded from key decisions affecting themselves and colleagues, especially those about service redesign and ICT provisioning to support revised, or wholly new, business processes,” said the Socitm report.
Dave Aron, analyst at Gartner, says CIOs need to:
"- Ensure they are not spending all their time ‘tending the garden’ of existing IT assets, and spend time hunting for new digital opportunities and threats to the business. (These will often come from social, mobile, cloud and big data/ analytics.)
- Ensure their activities are appropriately balanced between back office/ internal operations, and front office/ customer experience.
- Make sure that there is a backpath from IT strategy to business strategy. i.e. make sure that new informational/ digital capabilities are considered in creating business strategy.
- When looking at IT-enabled innovation, don’t get trapped into thinking business process improvement is the only way. That way of thinking is often too incremental. Many new digital innovations are in products, customer experiences and business models, as opposed to business processes."
CIOs may also be forced to share IT budgets with marketing departments according to KPMG. It recently revealed that chief marketing officers are controlling more IT budget as CRM becomes critical to customer retention. Mac Scott, associate director in KPMG’s CIO advisory, said the convergence of marketing and IT means marketing professionals will gradually hold more influence on IT budgets.
“Simply because marketing and IT teams depend on quality data, slick processes and stable software, chief marketing and CIOs will increasingly need to form strategic partnerships,” said KPMG.
One senior employee at a large IT services supplier confirmed this trend. He said that it is the marketing people they are engaging with for technologies such as social media, mobile apps for customers and website work.
Nick Kirkland, CEO at CIO Connect, said three big trends that are changing the role of the CIO. "Enterprise IT groups are losing control of corporate IT spend and are getting pigeon-holed in legacy systems, the business units are bypassing IT and employees are buying their own devices."
"This leads us down the route of asking what the CIO is doing?" He says the CIO of today should be going to the business offering them support. "The CIO should go to business colleagues saying 'how can I help' and not 'I want to control your IT." He says the CIO role will be diverse with no "one size fits all" as different kinds of business will require different types of CIO.
Yann L’Huillier, global CIO at finance firm Tradition, said CIOs have a critical role and need to ensure they work closely with the business to prevent silos developing.
He said CIOs must ensure they are not working in a “vacuum” to make sure there is proper governance for the IT being used.
“IT is nothing without the business and CIOs need to work with the business all the time,” he said.
Technology such as cloud computing have led to departments bypassing IT and the CIO has a more important role to ensure there is governance.
“IT and computing is now more understandable and departments can bypass the CIO,” said L’Huillier. “A lack of governance will lead to silos.”