The Changing Role of the CIO
In the last few years, the CIO role has shifted significantly from being a technology provider and part of a delivery unit to operating as a strategic advisor, business partner, and enabler of new business models.
The commercialization of technology, particularly mobile, means we are also influencing customer demand on an enterprise level. In the cloud era, customers expect solutions to be available all the time and seamlessly integrated on all platforms, including mobile. IT has effectively become part of the product and service itself, and CIOs have become business enablers by driving the transformation of new business models.
Employee demands have also shifted dramatically, accelerated by the COVID-19 pandemic. A new generation of employees is reforming the way we work and today’s CIOs must have a digital transformation strategy in place to adapt to a new workplace reality and retain talent.
With that, CIOs and their IT departments have had to create a digital workplace footprint that not only answers to the requirements of their business but also optimizes and drives peak performance from modern employees. None of that is possible without a robust IT infrastructure and strategy. The sheer speed of innovation means that CIOs must also define a business-enabling IT strategy that is agile, scalable, and that leverages new technologies such as artificial intelligence (AI), machine learning, and robotics to deliver empowering business solutions.
Growth of CIO scope and role
These major shifts in technology, customer demands, and employee expectations are substantially reshaping the scope and role of CIOs who now collaborate with executives across all lines of business to lead their company through the digital transformation and workplace revolution. In the process, their focus has shifted – from efficiency driver to growth driver, from system provider focused on managing traditional IT operations to the CIO who shapes and creates the digital transformation.
At SAP, for example, the IT organization has experienced a fantastic transformation from the role of the traditional service provider to be the technology backbone, new business model enabler, and key driver of our digital transformation. IT is not only the technology provider of a company, but drives the busines transformation and owns all levers of an intelligent enterprise. Companies that don’t recognize that today will lose their relevance tomorrow.
In the tech industry in particular, IT departments are also often the first and best reference customer and with that CIOs directly influence product development and strategy. CIOs now speak with the experience and the invaluable voice of a customer, which solidifies their position and influence within their company’s value chain.
As trusted business partners, CIOs now play a key role in many additional functions, including enhancing corporate performance through advanced technology, driving business transformation, improving results through process automation, and ensuring sustainability by driving a solid green IT strategy.
Important functional areas of a business such as finance, marketing, and HR rely heavily on a superior technology infrastructure and the seamless integration of systems. For example, data and analytics insights can provide the head of sales with a 360-degree view of a customer that they may not have had before.
Data and analytics drive the Intelligent Enterprise, and a data-driven mindset has become a critical component in the CIO strategy.
Impact of the cloud and consumers
The move to the cloud has been an earthquake in terms of the evolution of IT. Not every company is cloud only, but nearly every company now has a cloud-first strategy in place. Whether companies run their businesses completely in the cloud or adopt a hybrid model, there are multiple significant benefits, including lower capital costs and faster access to the latest solutions.
Employees gain immediate access to corporate information anywhere, anytime, and on any device, increasing their effectiveness and improving customer service. Meanwhile, the cloud gives companies much more flexibility and enables them to respond faster to market trends, shifting demand, and competitors. As a result, they can scale up and down much more easily while only paying for what they use, when they use it.
For IT and the CIO, this means providing technical and process support for their organization’s cloud-based infrastructure to enable new business models. CIOs are also responsible for ensuring that customers have a great user experience, which in a cloud environment means everything must be integrated, simple, and smart to promote customer loyalty.
We also see a shift of power from the CIO/technology provider to the customer who now has more choice and can switch solutions more easily. That helps underscore the importance of a customer-first mindset for technology providers in particular.
In the cloud, one of the most important metrics to really measure customer successes is usage – if a customer isn’t using your (subscription) solution, the likelihood of renewal is not very high. For that, it is imperative for the CIO to provide technical solutions that enable the company to be much closer to the customer, to better understand what they’re using and what type of functionality is potentially still missing.
The pandemic changed everything
Of course, the other big change that we’ve seen over the last 18 months has been the impact of the pandemic. Employees, customers, and businesses in general depended on IT and CIO capabilities to maintain their organization’s safety and business continuity.
Almost overnight, employees needed to transition to a remote workplace with seamless access to everything required for performing their job, including all systems, data, and cloud solutions. And they relied on advanced collaborative technologies to maintain their teamwork and shared objectives. For CIOs this was a massive challenge and underscored the importance of having a solid disaster recovery plan.
We can also see that the pandemic has accelerated the digital transformation of most companies’ business processes. That meant simplifying critical processes and combining them with intelligent solutions, automating repetitive processes, and moving to the cloud. It also meant creating greater transparency about supply chains and CO2 footprints, as well as using owned and third-party data to act more proactively with the help of artificial intelligence.
The pandemic also highlighted the importance of understanding our supply chains and ensuring they are resilient and flexible. Supply shortages are a critical side effect of the pandemic and companies need to react much faster than in the past. For the CIO that means taking on much more responsibility for delivering that agility and making sure the company is running smoothly end-to-end. That puts additional pressure on the CIO, but it can also be very positive because it brings additional credibility to the role as a strategic business enabler.
Four skills of the future CIO
Looking ahead, I think there are four key skills and attributes that a successful CIO will need in the future:
- Business acumen with a holistic sense of their business and customers: CIOs must go much deeper into the business and understand their customers to effectively define and drive their organization’s IT strategy. To stay on top of trends and adjust to market conditions, they must have strong data and analytics capabilities and leverage data-driven decision-making to predict and drive the business needs of tomorrow. A CIO’s ability to lead an agile organization that embraces automation and business transformation will be a key differentiator.
- Strategic thinking, adaptability, and the ability to see the bigger picture: Successful CIOs must be able to grasp the bigger picture of the organization, including the business impact of IT decisions, ROI dependencies, and team member needs and challenges. By understanding the full stack of an organization’s needs, the ideal CIO can find, apply, and adapt the right technology to maximize company-wide success. Disruptive thinking plays an important role as well. Technology has proven to be highly disruptive, challenging almost every status quo and business model. CIOs now play one of the most important roles in shaping the business by leading the technology-based future of the organization.
- Leading with empathy, vision, and care: These CIO attributes are important to successfully lead a team through changes and an unexpected crisis. But they are also necessary to adapt to – and be prepared for – the everyday demands of the future. Change is a constant companion in the business world and drives innovation. Ensuring that employees are adapting to change and are successful is critical. Effective CIOs will have a solid people agenda in place that provides tools, programs, and career planning paths that ensure employees are moving forward within their organization.
- Communication, transparency, and visibility: Communication and transparency are critical in all aspects of the CIO’s leadership and business acumen. Being heard, being seen, and being relatable earns trust from customers, peers, and employees and will pave the way for the CIO to become an important business voice. Visibility internally and externally and being a visionary voice and thought leader in their industry will not only foster appreciation, but will also profoundly impact their organization’s business success and can be a key differentiator for success in their respective industry. A successful CIO will have a well-defined internal and external communication strategy.
Sometimes people ask me what it is like to be the CIO of a large technology company. I usually compare it to being the coach of the national soccer team here in Germany. There are millions of people who are interested and capable of talking about soccer, and some may even know the answers better than the coach. The same applies a little bit to the CIO of a tech company. At SAP, my internal customers include over 40,000 developers whose core expertise is technology. It is challenging in all the best ways and keeps me on my toes.