The Changing Role of the CIO – Part 1
July 5th, 2012 By: Industry Perspectives
Ravi Kumar S is the Global Head of Consulting and Systems Integration business in the Manufacturing Industry Group of Infosys. He has more than 18 years of experience in the consulting space incubating new practice lines, driving large transformational programs, evangelizing new business models and enabling disruptive technologies.RAVI KUMAR S
“Is the CIO role really needed today?” This is one of the questions that flicker past the minds of the people occupying the corner rooms at some of the Fortune 500 companies. On deeper reflection, one will realize that the question is not totally unfounded today, when the IT investments and IT product choices are being made directly by the CXOs–after evaluating the alternate products and the business impact and value add that these products will have on their business goals and strategies. Another interesting trend is the shrinking of the CIO’s team, due to the multi-pronged forces such as outsourcing, cloud and increasing role of the product vendors and systems integrators.
Strategic Benefits of CIO Role
The advent of the millennial generation, which has grown up amidst the internet and the online and social, collaborative world, has impacted the way the business users perceive IT. The appreciation for the strategic benefits that IT can bring to the business and the far reaching impact it can create on the firm’s top-line and bottom-line is much higher today among the CXOs than at any time in the past. The CXOs who run functions like marketing, sales, finance, HR etc. have reached a stage of maturity after having used IT for both business and personal purposes over the period of several years.
The advent of social media and usage of collaboration and communication tools by the business users has further enhanced their appreciation of technology. The advents of business intelligence, big data, cloud and mobility have created a paradigm shift in the way the CXOs look at IT. The game has completely changed from automating the operations to harnessing IT for strategic advantage. Several leading firms are looking at ways of scraping out costs from the routine “keep the lights on” IT operations and using these savings to fund the IT initiatives that add to the business top-line or bottom-line.
The trend of IT vendors selling directly to the CXOs started couple of years ago when the impact of IT on the business started having far reaching consequences and the choice of the right technology or platform for addressing the business needs made a significant impact on the ability of the business teams to meet their objectives such as expand market share, reduce time to market for new products, reduce order to cash time and the like.
Changing the Old Paradigms
The CEOs have been always involved in decisions that require huge financial investments in IT, but the “selling” by the IT vendors was done to the CIOs and the CEO was involved only in the final stages for vetting the ROI and for making a financial commitment. Today the IT vendors “sell” the IT platforms and products that have synergies with the firm’s business strategy and which will create a significant impact on the top line and bottom line directly to the CEO. There are value articulation frameworks that correlate business benefits accruing from the IT product or platform implementation to parameters as diverse as incremental revenue or profits of the firm or even the stock price of the firm. And who better to articulate such benefits to than the CEO!
Other Executives Now Part of the Decision Making
Similarly, there are a lot of instances where the IT vendors “sell” to the firm’s Chief Sales Officers in areas such as CRM, Sales and distribution and the like where the sales team are the key business users. The sales team, being the end users, would have a lot of say on what product or application they want to work with and what product would best meet their needs. The CFOs are no exception where concepts like cloud, with its opex vs. capex benefits as well as the accounting and financial applications, are sold to them. Even the CMOs are not left out in the endeavors of the IT vendors to sell directly to business. Contemporary trends like social networks and digital marketing are some of the ideas that are exploited while selling to the CMOs.
What Lies Ahead?
Now what does this leave the CIO with? Some of the doomsday theorists go to the extent of saying that the CIO role will eventually become redundant and will cease to exist in its current form and shape. There are concerns among the CIO circles that this role will be eventually relegated to that of a back-end procurement one from the current role of a chief decision maker and leading the firm’s large army of in-house IT employees as well as running large enterprise-wide programs. At the same time, there are other schools of thought which say that CIO role might transform and the responsibilities might be altered, but will certainly flourish in the days to come as well.
The next part of the article series will cover what the CIO role will look like in future and how it will metamorphose to become more encompassing and more rounded on all fronts.
Editor’s note: Deepak Pelluru, who is a Practice Manager in the Consulting and Systems Integration Unit within the Energy, Communications and Services (ECS) industry vertical at Infosys, also contributed to this article. He has 15 years of experience in the IT industry and experience in IT consulting, large program management, strategic planning as well as handling key client relationships.
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Thank you for sharing valuable insight and your honest assessment. You are right on about the changing dynamics of roles that are changing with the ever-changing business dynamics. It’s moving more and more towards outsourced model to include managed services, cloud computing and management tasks. Also agree that other C Level executives are getting involved in the IT decision making process.
Look forward to reading your next article.
Maloy PatnaikPosted July 8th, 2012
Thanks for this article.
I couldn’t agree more that the CIO role is getting challenged with many organizations beginning to bring in with hybrid ‘Business-IT’ structure that combines business and IT capabilities under single unit.
In such environments, CIOs would need to move beyond the traditional Time/Cost/Quality focus around IT operations to a more direct role in ensuring customer value creation (traditionally the realm of other CXOs).
Looking forward to the next installment of the series.