IT leaders have been urged to relinquish their monopoly on technology, as other parts of the business step up their spending on mobile, social media and cloud computing.
According to a major study, marketing, financing and other parts of the business are now better positioned to drive digital innovation in their organisations than the IT department.
Spending on technology outside the IT department is growing rapidly, and is now effectively adding 40% to companies' IT budgets, the study of 100 organisations by the membership advisory group CEB reveals.
But rather than fighting back, CEB (formerly the Corporate Executive Board) argues that CIOs should actively encourage other parts of the business to build their own innovative digital projects.
“Because technology and digitisation are so important, we will see more and more innovative ideas come from other parts of the business,” said CEB managing director Andrew Horne. “The idea that CIOs and chief digital officers will be the source of innovation does not make sense.”
If the CEB is right, the role of the CIO will refocus on the less glamorous tasks of managing the IT infrastructure, while leaving innovation to other parts of the business.
“One way of looking at it is that IT looks less exciting than it has in the past,” Horne said in an interview with Computer Weekly.
Marketing is driving digital innovation
The CEB advises CIOs to act as coaches and mentors to help other business leaders understand how to use digital technology to grow their organisation.
CIOs will need to work closely with chief marketing officers, who are spending the lion's share of company funds on technology outside the IT department.
Five myths about the CIO/CMO relationship
- CMOs want to own large-scale IT spend
- CMOs will soon outspend CIOs on IT
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- IT should get involved in digital projects before other parts of the business
- Better risk communication will drive compliance
“It is not risk-free, and there are a lot of things that could go wrong,” said Horne. “But our advice to CIOs is to enable that spending, to help business leaders be effective in the use of technology and to run the capabilities business leaders need to develop.”
Some CIOs are assisting by creating central data hubs, which can be used by local marketing teams to develop applications for their local markets.
In other cases, CIOs act as a go-between, so if a US marketing team develops an application that could be useful in the UK, the CIO can alert the UK marketing head, said Horne.
Business leaders need technology skills
At the same time, business executives will need to develop new skills as digital technology spreads throughout the organisation.
They will need people on their teams who understand project management, vendor management and the business benefits of data, said Horne.
“No one would argue you can be an effective business leader unless you can develop talent,” he said. “We think the same is true of technology. You can’t be an effective business leader unless you understand technology.”
Business executives will also need to take more responsibility for the risks of digital technology, the CEB study argues.
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“This is not going to work if the CMO makes a risky technical decision and the CIO is held responsible for that,” said Horne.
One approach is to give marketing departments freedom to explore low-risk projects, but for IT departments to be more actively involved in high-risk projects.
CIOs can develop rules of thumb for assessing risk, so IT staff know when to be more involved in a project, and when to step back.
CIOs will focus on more infrastructure
The research shows that although marketing departments are keen to experiment with technology, they have no interest in managing technology infrastructure.
That means CIOs will need to be on hand to take over projects and manage the IT infrastructure once they have proved themselves.
“Even if marketeers spend more on building systems, they will need to give more money to IT to manage them,” said Horne.
There is no danger that CMOs will outspend their IT department on technology, however.
Although their IT spending is growing, in practice they are spending 10 to 20 times less on technology than the IT department.