Share, , Google Plus, Pinterest,


Posted in:

New CEO-CIO Partnership: Made In The Cloud

Ever since the concept of the chief information officer first emerged in the 1900s, there has been a lot of talk about the status of the CIO in the corporation. From the beginning, management experts pointed out that the growing strategic importance of information technology dictated that the CIO have equal or even elevated status among C-suite executives. This rarely happened. Despite all the resources that the CIO commanded and the growing dependence on IT to keep the organization humming, CEOs tended to think of their technology departments as a service function. It was a critical service, but not the driver of strategy and growth.

Today, the time has finally arrived when CEOs and CIOs are becoming true partners. As the Wall Street Journal pointed out a few weeks ago, because CEOs now see their strategic future in digitization of processes and digitally-enabled products and services, for the first time more than half of CIOs now report directly to the CEO (53% vs. 46%, according to a Korn/Ferry International survey). We certainly see this among our clients. We are observing that more and more the CIO, at least from a strategy point of view, rolls into the CEO. Information technology is no longer an after-thought. This is because so much of what businesses are trying to do relies on IT — maintaining direct marketing and sales channels with customers, creating new technology-enabled business models, and streamlining processes in every corner of the company. So, we see our CIOs sitting at the same table where the business strategy of the organization is discussed:  What is the near term strategy, what are the new products that we are going to launch, and how are we going to counter the competition?

However, I would also point out that there is another factor at work here: the growing importance of cloud. Because of cloud, the conversation between the CIO and the CEO has changed. The conversation has shifted from what is the uptime and what are the features and the functionality to solve business problems to how quickly can this business division get the new CRM functionality it needs to beat its competitor.  The CEO has learned more about IT and how IT can enable strategy. But the CEO still does not want to get into the nitty gritty. The issues are: what are the business needs of the company and what is the business solution.  The CEO and the CIO can talk about the business solution without having to talk much about the technology aspect, because if we look at the shift to cloud then the technology piece is taken care of, because it is in cloud itself.  For example, the CIO can assure the CEO that if the goal is to supply a best-in-class customer experience, the solution can be found on the cloud and will work with whatever systems the organization already uses.

The conversation also moves away from costs and budgeting, where so many CEO-CIO conversations dead-ended in the past. Cloud implementations avoid many of the issues that made the CEO-CIO relationship fraught. With cloud you have a single software solution, you don’t have to do any provisioning, you move from capex to opex, and elasticity is infinite. The time to get anything live and going is a matter of hours and days, not months and years.

This makes it possible for both business and IT to focus on their core business outcome. How quickly can I launch a product? How quickly can we get the system that improves satisfaction among our employees, so they in turn can treat customers better and thereby delight the customer, who in turn will have the propensity to spend more? How can we please our end customers? How can we grow our customer base? These are the new considerations. This is the paradigm shift we are observing.

The new partnership between the CIO and CEO is still evolving. The CEO is learning a little bit about technology and the CIO is learning more about business—and this is just the beginning. Over time, because cloud makes solving technical problems so much faster and easier, we see the role of the CIO evolving into the chief data officer. The CDO will be responsible for the aggregation, assimilation, storage, slicing and dicing, and the analytics that turn data into meaningful information for the business. And for that, everybody in the IT realm must understand the business use of data and link the CEO’s business strategy to the enterprise data strategy.