For organizations to thrive in the coming years, CIOs will need to do more than just provide them with technology and platforms that nibble at the edges of what's possible. They need to wholeheartedly embrace digital transformation and become the change agents who will help their organizations adapt in a world driven by digital technologies.
Prior to the COVID-19 pandemic, digital transformation was, in many ways, just another technology buzzword.
Today, discovering how digital technologies can be applied to streamline operations, break down data silos, delight customers, empower employees, increase productivity, best the competition, enter new markets, attract new customers, cut costs, and meet every other conceivable business need now and, in the future, falls squarely on the CIO's shoulders.
"When I think of digital transformation and [the] CIO's role, COVID[-19] has proven that it's a necessity now … because companies have to engage with their customers through very different ways and means compared to before," said Rashmi Kumar, SVP and CIO at HPE. "CIOs really need the caliber now to think like COOs, if not CEOs of the company."
To do this effectively, CIOs will need some help, said Sanjay Srivastava, chief digital officer of Genpact, a digital transformation services provider. They will need to become co-creators who work with extended teams both inside and outside of their organizations to explore and define the art of the possible.
The first step of this process is defining the CIO's role within their organization, he said. If a CIO thinks their job is to keep the light on and reduce costs, they haven't defined the role correctly.
"The right job is, how do I co-create? How do I build new business opportunities? And that is a whole other skill set," he said. "It's rare that a CEO that will say, 'Listen, I've got a real problem with how do you get a data lake set up?'"
Keeping the lights on is table stakes
Table stakes for CIOs today is understanding how their organizations work and knowing what technologies are available to make them work better.
To be successful going forward, CIOs also need to provide the vision for how new tech like AI or robotic process automation can create business opportunities and improve the customer experience — which is the driving force behind business growth and profits today, said Sanjay. If the same technology can do both, which is becoming increasingly common today, all the better.
While the pandemic didn't change what technology can do or the technologies organizations were using, it did accelerate the imperative to use technology more creatively, more directly to solve business problems.
An example of this dynamic in action was the massive shift to remote work early in the pandemic. Companies with a significant portion of their applications and infrastructure already in the cloud were able to adapt to this new reality much better than those who did not.
"The momentum [for digital transformation] was generated by the external perspective," Sanjay said. "The rewards were always meaningful, even before the pandemic, right? My question is … why weren't you doing it before?"
To help answer this question, the CIO of one of Genpact's clients spends 45 minutes each week educating their CEO on various business technologies such as AI. The outcome of these sessions is the CEO gains a better understanding of the limits and the possibilities specific technologies bring to the organization.
With a more tech savvy CEO to work with, digital transformation discussions become more productive and actionable.
"The real qualities of a good leader and a CIO is having the ability to listen and the ability to liaise between their C-level peers on the business side and to understand and interpret … what transformation might mean to the sales and marketing guy," said Brett Sparks, senior director analyst, Sourcing, Procurement & Vendor Management at Gartner. "Does it just mean 10% upsell on our website? Instead of selling mattresses, now we sell pillows, too? Is that success? Or do we mean move to the cloud? Or do you mean, automatically reboot servers when they hit 95%? What does it all mean?"
Likely it's all of the above.
But it's not about just providing point solutions to solve specific pain points, said Kumar. Given the unrelenting demand for more and more digital capabilities, CIOs need to think more holistically.
"CIOs need [to] create a common set of platforms, services and capabilities for the whole company so that every business unit leader who is thinking about digitalization in their line of business or in their products can leverage IT and have two results," she said. "One, it will accelerate the digital transformation for the company and, two, it creates a unified customer experience around all products and services."
Digital transformation is not about tech
For many CIOs today, thinking like a business person instead of technologist is just part of the job, said Kelby Zorgdrager, CEO and founder of DevelopIntelligence, a software developer training company.
"Most CIOs I’ve observed are very business minded and may actually be more business minded than technology minded," he said. "The CIO’s role isn’t to suggest technology for technology’s sake. The CIO is a partner to the business, who digs deep to understand the true needs, and then works with a team to design a technology road map for achieving specific organizational goals."
"Sometimes, that roadmap needs to include large-scale technology transformation," Zorgdrager said.
For CIOs who may not possess insights into the market nuances impacting their organizations, they should partner with those in the business who do, said Sparks. While a seemingly obvious solution, these partnerships do not always come easy.
"There are so many different facets to look at," he said. "It depends on if you have [a] meek CIO, who wants to be a pleaser and do what the CEO or CFO says. And then you have other CIOs who report directly to the CEO. And they do have their ear and they are driving innovation. And they are working with these providers, and they don't need near as much help.”
Because they are so strong-minded and have such a firm grasp on tech and business considerations, the downside risk for the latter type of CIOs is coming across as bossy, said Sparks. “They end up telling the sales executives what they're going to do. It's a double-edged sword."
Given all the pressures on businesses to rapidly expand the use of digital technologies, it is likely these strong-minded individuals will be the ones who carry the day, said Sparks. The days of simply delivering on what the business thinks it wants are quickly coming to an end.
"In the long run, most companies will end up being technology companies," said Sanjay. "That's the No. 1 topic on most board meetings. Maybe the company is not there right now but, it's part of CIO's job to illustrate and bring that out. The job is not to just run the operation … but once you run it, it's like, 'Oh, my God, you've been running [IT] for five years and you can't come up with a new idea on how to change it?' I mean, you don't want that question."