Photo: The CIO of the future must demonstrate both technological expertise and strategic business thinking. Credit: Andrea Piacquadio | Pexels
Technology has driven business growth for decades now, with the internet and digitalization transforming human communication, consumer-brand relationships, and the very way we work. Which comes hand in hand with the rise of the CIO as an essential actor in the design of the overall business strategy. The differential impact of technological changes on a company’s success has transformed the role of the CIO from a purely functional one to that of a proactive strategist, equipped with leadership skills and disruptive thinking, who must work in close collaboration with all other departments.
The pressure on CIOs to leverage technology to create business value is high, now that CEOs are realizing its key role in enabling business strategy. Emerging technologies, from the metaverse to artificial intelligence, are influencing market trends across all industries and shaping the behavior of increasingly tech-savvy consumers. Companies cannot afford to miss out on this new technological paradigm, quite literally—businesses further along in the digital transformation process had roughly twice the revenue growth rate than those who were falling behind, a recent study has found. Moving forward, technology won’t simply support a company’s business goals, but rather drive its entire strategy.
The aftershocks of the pandemic
The COVID-19 pandemic has fast-forwarded by several years the need for companies to integrate technological instruments into every process and at all levels. Mobility and gathering restrictions and health concerns forcibly hastened the digital transformation of companies, public services and sectors such as health and education alike.
COVID-19 has also exacerbated the importance of digital technologies for businesses to attract and retain talent, and meet new clients’ demands. Employee working habits and customer buying behaviors have shifted significantly during these past two years: the average share of internet users who made purchases online increased from 53% in 2019 to 60% following the onset of the pandemic (2020/21), with online sales also increasing in value, according to UNCTAD. 71% of workers now want a hybrid or remote work model, as the 2021 State of Work study conducted by Owl Labs shows. Younger professionals, in particular, demand more flexible working, with 72% of Gen Z employees having left or considered leaving a position as a result of an inflexible work policy, per LinkedIn data.
In addition to developing the infrastructure to enable this new system of long-distance working, one of the primary responsibilities of CIOs in the aftermath of the pandemic is to build resilience in order to drive business recovery and ensure preparedness ahead of future crises. Consequently, some of the areas identified as a priority for business-IT alignment are cloud computing (as it offers the flexibility and low-cost scalability needed to cope with potential disruptions and support remote access and online collaboration), AI and machine learning, and automation.
Seeing eye to eye
Such an accelerated, almost mandatory adoption of digital solutions in such a short time means that harmony between CIOs and other members of the C-suite has become urgent. But to build this synergy between decision-makers, there is work to be done on both parts.
‘IT's changing mandate in an age of disruption’, a 2021 report from The Economist Intelligence Unit, found that collaboration between IT and non-IT teams was thought to be strong by both sides, although 41% agreed that their organizations would benefit if collaboration was stronger still. This same report noted that 29% of respondents cited lack of access to technical talent, inadequate collaboration between IT and non-IT teams, and lack of budget and investment as the chief barriers to reaching their organization’s digital goals. But the report highlighted a key finding: business decision-makers complain more about lack of access to technical talent and inadequate collaboration with IT, whereas IT decision-makers identify legacy IT systems and lack of investment as the biggest obstacles to achieving objectives.
Some of the main advantages of business-IT alignment that experts cite include reducing digital friction (that is, delivering technology that is easier for workers, customers and partners to use), improving customer engagement and productivity, and fueling innovation. On the other hand, among the perceived challenges are lack of trust and credibility between IT and business leaders, lack of business acumen within the IT department, lack of technology knowledge among other business functions, and IT leaders’ inability to communicate how technology initiatives can support business goals.
Mutual understanding might also be hampered by unrealistic expectations and the inevitable disenchantment in the hype cycle of any emerging technology. This gap between overly optimistic hopes regarding the potential functionalities, performance and ROI of emerging technology, and its actual limitations, stems in part from a lack of communication between IT professionals and other business strategists, as well as ignorance of the more technical and obscures aspects of digital solutions on the side of senior executives and decision-makers. A CIO must therefore become a proficient communicator, able to clearly share their expertise and likewise listen to the other parties’ own business insights.
A shifting job description
CIOs are expected to retain the increased visibility and prominence they gained as a result of the pandemic: 74% of IT leaders and 78% of LOB (line of business) respondents to the 2022 State of the CIO survey are confident that their heightened status within organizations will continue in the coming years.
In addition, CIOs are increasingly seen as changemakers. CEOs have become more aware of the importance of tech leaders to drive transformation and business growth: the 3,000 CEOs surveyed for IBM Institute for Business Value’s The 2021 CEO Study placed CIOs among the top three C-suite executives most crucial to achieving their business goals, tied with CTOs. And for the CEOs of top-performing companies, heads of technology ranked second in relevance. With these growing responsibilities, CIOs’ business knowledge must now extend beyond ensuring IT systems efficiency and profitability into long-term, holistic strategizing.
We can thus begin to glimpse the skills of the CIO of the future: they must boast an innovative mindset, able to drive change within the company. They must also have great flexibility and proactivity to accommodate or, moreover, anticipate tech trends. Their ability to implement agile and adaptive processes to quickly embrace and leverage emerging technologies will be a brand's main safeguard for the future in a context of profound disruption and uncertainty.
Their increasingly cross-functional role within businesses also means that coordination, communication, and mutual understanding with other departments has become paramount. The technological processes and solutions implemented by the CIO have an impact on all sectors of a company, not only on a practical, technical basis, but at a fundamentally strategic level. Business goals and technology objectives are now one and the same. Instead of speaking of the IT strategy as a mere chapter in the company's playbook, the business strategy as a whole must be intrinsically technological, at all levels and in every stage. In this scenario, CIOs have become a decisive agent of change.