Digital transformation is sweeping through businesses, giving rise to new to new business models, new and different constraints, and presenting a need for more focused organizational attention and resources in a new way. It is also upending the C-suite, bringing in new corporate titles and functions such as the Chief Security Officer emerge, Chief Digital Officer and Chief Data Officer. These new roles seemingly pose an existential threat to existing roles – for example, the CIO.
As companies invent new business models through digital transformation and bring new organizations into being, they do more than cover new ground. They also carve new roles out of existing organizations (the CIO organization, for instance). Other digital threats potentially affect the CIO role:
- Recognition that digital transformation now makes technology THE business, rather than technology supporting the business; therefore, IT and CIO roles are much more vital to growth in sales.
- Competing through new digital models and digital platforms, focusing on redefining the customer experience and employee experience to create and deliver new value.
At Everest Group, we investigated the question of “Will the role of the CIO go away?” As a result of that investigation, we come back strongly with “no.” In fact, here’s happening to the role of the CIO: the CIO charter is changing and thus changing – but strengthening – the role.
Reasons For Changes In The CIO Charter
The focus of the CIO charter is increasingly changing – matching the new corporate charter for competitive repositioning. The prior focus was on the plumbing (infrastructure, ensuring applications are maintained and in compliance, etc.). Although those functions remain, the new charter focuses on building out and operating the new digital platforms and new digital operating models that are reshaping the competitive landscape.
The reason the CIO role is changing with the new corporate charter is that, in most organizations, the CIO is the only function that has these necessary capabilities for digital transformation:
- Breadth of vision that sees the entire organization and all its workings
- Depth of resources and ability to drive transformation projects and apply technology across silos, functions and divisions.
Digital transformation inevitably forces new operating models that have no respect for traditional organizations that are functional. Digital platforms and digital operating models collapse marketing and operations, for instance, spanning across these functions and groups to achieve a superb end-to-end for customer experience.
The new models force much tighter integration and often a realignment of organizations. The CIO organization and its breadth of vision and depth of resources to drive the transformation and support the new operating model that inevitably emerges from transformation.
How The CIO Role Must Change For The New Charter
Meeting the goals of the new charter for the CIO role will not come without CIOs changing their organizations and, in many cases, changing personally. To seizing the opportunities in the new charter, as well as shaping it, requires substantial change in (a) modernizing the IT, (b) the orientation and mind-set of the IT organization, and (c) changing the organizational structure.
To support digital transformation agendas, CIOs face a set of journeys in which they need to dramatically modernize their traditional functions. They first must think about their relationship with the business. To meet the needs of the business in a much more intimate, proactive, deeper way requires more investment and organizations with deeper industry domain knowledge and relationships. They need to move talent from remote centers back onshore to be close to the business so that they can better understand in a deeper way what the needs are and act on those quickly.
Second, the IT operating model needs to change from its historical structures so that it can deliver a seamless operating environment. The waterfall structures that still permeate IT need to change into a DevOps model with persistent teams that don’t change, teams that sit close to the business. IT also needs to accelerate the company’s journey to automation and cloud.
One thing companies quickly find about operating models is that they can’t get to a well-functioning DevOps team without migrating to a cloud-based infrastructure basis. And they can’t get to a cloud-based infrastructure basis without transforming their network and network operations model.
To meet the new charter, the CIO organization also needs to change in the following aspects:
- Change its mind-set
- Ensure deeper business knowledge
- Increase agility and speed
The modernizations I mentioned above then call into question the historical organizational structure of IT with functions such as network, infrastructure, security, apps development, apps maintenance, etc. In the new digital charter, these functions inevitably start to collapse into pods or functions aligned by business services.
As I’ve described above, substantial organizational technology and organizational change is required within the CIO’s organization to live up the new mandate. I can’t overemphasize the fact that the change is substantial nor overemphasize the need. In upcoming blog posts, I’ll further discuss the CIO’s role in reorienting the charter from plumbing to transformation and supporting the new digital operating models.
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