Posted by Alexander Peters, Ph.D. on December 27, 2012
It is end of the year and time for predictions. Mine are rather intuitive, with a few obvious implications for CIOs:
First, the industry will continue to push innovation to businesses faster than businesses can absorb. In addition to customer obsessions — BOYD and tablets, social business processes, cloud computing, machine-to-machine applications, and many others — CIOs will continue to struggle with the usual suspects: huge expectations of technology from business stakeholders, cost reductions, people’s longer-than-expected learning curves, skills shortages, immature management practices, and a few more:
- Increasingly complex technology stacks. Rather than replacing legacy capabilities, most of the new products and services increase the complexity of existing technology stacks. For example, mobile devices and social apps come on top of enterprise systems of record in which organizations have invested for decades and are not ready to dispose of so quickly.
- Increasingly dynamic business models. The more technology products and services become embedded in business processes and services, the more non-IT organizations, products, and business models start resembling IT ones. Cars are becoming complex tech devices, and industries that preserved their stable structures for decades are transitioning to a continuous state of dynamic change. Take, for example, the utility sector.
- Diffusing sourcing and cost management processes. With the advent of the cloud, the traditional plan-build-run model that channeled tech investments through structured IT life-cycle processes to one place — the IT department — loses momentum. The cloud makes possible planning at the points of business operations and the faster and more efficient implementations of new capabilities at lower capital costs without IT and outside the perimeter of the organization.
- New types of risk. In addition to the more complex and difficult to control sourcing and cost management processes, exposure to new types of technology-related vulnerabilities and threats (such as reputational, compliance, and security risks stemming from the use of non-sanctioned capabilities) will continue to make the days in the life of CIOs more challenging.
Second, senior executives will spend more time on technology-related decisions. McKinsey and IBM say so — and so it will be. The implication for CIOs is that in addition to making the right politics and actively and regularly interacting with senior board members, they will need to prepare for the role of a business technology leader, meaning that they will increasingly spend time managing the seven fundamental technology factors that board members need to actively direct and monitor:
- Costs: How much should the organization spend on technology?
- Alignment: What business capabilities should receive technology budget, how much and when?
- Resources: Which technology capabilities should be dedicated to selected business functions and which capabilities should be shared across the organization?
- Quality: How good does IT need to be in terms of service quality, operational agility, reliability and resilience?
- Risks: What technology risks are acceptable from a business perspective?
- Roles and responsibilities: Who should drive the development of business-related technology capabilities and manage the delivery of technology services?
- Communications: What makes for effective communication of technology-related decisions with stakeholders and employees?
And third, organizations will increasingly need business technology (BT) leadership. BT leadership is not a one-size-fits-all role, and its multiple facets evolve as a reflection of the business models and environment dynamics in which it acts. CIOs are definitely hot candidates, but if they don’t take the role, somebody else will. We have seen, again and again, COOs, CMOs, or senior business process executives leading the transition of their organizations from the stable structures of the past to the new normal state of digital disruption. But these situations are rather suboptimal exceptions rather than the rule, as BT leadership takes more than a full-time equivalent. In 2013 we will see more CIOs in the BT leader role and becoming:
- Key members of the senior executive team. In this position they will take responsibility for the development and facilitation of good BT governance, timely delivery of information that drives executive decisions, and responsibility for ensuring that technology investments provide value to the organization.
- Directly involved and directing cross-functional change initiatives. This includes participating in conversations on how the organization develops products and services, educating executive colleagues about the pros and cons of emerging technologies,developing business architectures that serve the strategic goals of the organization and can be managed and sustained, and taking ongoing responsibility for business process and technology integration and standards, as well as for intellectual and technology asset management.
- More business partners than traditional technical leaders. The partner role goes beyond facilitating good governance at the top level of the organization. It is also about regularly engaging with stakeholders from customers and industry analysts to external suppliers, and from business unit leaders to technology users. It is also about setting directions and monitoring the performance of technology teams that operate outside IT and forging alliances with external suppliers. And at its core, it is about streamlining business operations and reducing costs while ensuring that the organization has sufficient capacity and skills to reach its business goals.
These predictions are neither disruptive nor radical, and probably recyclable in the years to come. They reflect the continuous state of transition that the CIO profession is undergoing. For CIOs striving to become BT leaders, 2013 will be an average year — better than 2012 and worse than 2014.
Happy Holidays and Happy New Year 2013!