Dual paths of the CIO Role

Dual paths of the CIO Role

by | 16 Aug 2015 | Consulting, Technology

Why do we spend so much time scrutinising the role of the CIO?

Much of the reason is probably as a result of the pace of technology change

With every major computing paradigm that comes along driven by vendor marketing departments, CEOs tend to worry when their competitors do well at quarterly fiscal announcements that they are leveraging technology better, potentially asking:-

“We must not have the right kind of CIO!”
“We have an operations person, but we need an innovator!” or
“We have a visionary but our operations are inefficient!” or
“Our CIO is not technical enough!” or “Our CIO is too technical!”

Having recently read a report provided by CA Technologies on the ‘Changing Role of IT’ it is bound to raise even more questions about the role of the life of the CIO role.

According to this research, more than 70% of CIOs are reporting to CEOs, which signals a rise in the strategic significance of IT; however a mere 14% of CIOs see their role as a driver of new business initiatives. Also from the research, many CIOs have finally been able to strike a 50-50 balance between spending on new products versus spending on maintenance; but despite this success in IT investment management, CIOs are giving away their budget: More than 35% of IT spending is occurring outside of the IT department, or what is commonly called ‘Shadow IT’.

With technology now becoming as ubiquitous to a company’s operations as the finance function, we may have to be realistic to the notion of saying farewell to one centralised technology leader in the business. Realistically technology strategy, spending decisions, and resources will extend out of IT into other business functions or external third parties due to demanding digital agendas in order to serve all of a company’s technology needs.

According to the report the CIO role is evolving along two interesting parallel paths:

The Chief Innovation Officer:

One group of CIOs will travel on the innovation path. These CIOs will leave IT operations to someone else as they focus on the convergence between engineering, R&D, and software development. They will build organisations populated by entrepreneurial types who look toward data, software, and even business processes for new revenue ideas. They will meet with external customers, forge partnerships with universities, launch innovation labs, acquire technology services, and lead the charge in getting their business’s executives to focus on the future. These CIOs can create a vision of future products, business models, and customer engagement channels, and they have the credibility to inspire their colleagues to believe them and to follow.

The Chief Shared Services Officer:

CIOs that have spent their careers running air-tight operations might just not have the gene for business model innovation. Or maybe they have the gene, but their CEOs do not see them as innovators. All is not lost for this breed of CIO however. Having spent their careers managing large operations that deliver a complex array of IT services to tough customers, these CIOs will outsource more and more of IT and free themselves up to manage other key business services. Just because IT operations are being commoditised does not mean that “operational CIOs” should be commoditised, as well. If they play their cards right, CIOs who excel at running IT as a support function, will expand their roles into other shared functions, like legal, procurement, and HR.

This CIO might even wind up in the new Chief Business Process Officer role beginning to emerge in the executive suite corridors. These CIOs will hand innovation over to those business executives who are clamouring for a piece of the IT budget. But rather than be relegated to an IT services babysitter, these CIOs will take their considerable expertise with business process change, continuous improvement, project management, and vendor management and bring a new era of leadership to their companies. These CIOs will run IT organisations that are largely outsourced; they will populate their organisations with people who have expertise in vendor management and a wide array of business processes while maintaining corporate process standards and SLA’s.

“Technology certainly is turning the whole businesses upside down, as CEOs everywhere struggle to find the best way to manage and leverage IT.” commented Craig Ashmole, Founding Partner of London based CCserve consulting. “This is why so many industry experts are talking about the CEO having the CIO at the boardroom table, as IT done ‘right’ will be critical for Digital proliferation and business market growth.”

It makes sense that as technology increases its impact on businesses, the role of the technology leader will evolve. The key for every CIO today is know which path plays to your strengths, and get a grip with the evolution and be the new technology leader of the 2020’s.

Having spent a majority of my career working with and supporting the Corporate CIO Function, I now seek to provide a forum whereby CIOs or IT Directors can learn from the experience of others to address burning Change or Transformation challenges.

Craig Ashmole

Founding Director CCServe

IT role in Corporate Acquisitions

IT role in Corporate Acquisitions

by | 6 Aug 2015 | Consulting, Technology

IT role in Acquire, or Not-to-Acquire

The changing landscape of the IT Technology arena within corporate Merger or Carve-out

To acquire, or Not-to-acquire – The question most CEOs ask their CFO is:- Will the transaction drive financial rewards and what are the risks, but really the glaring missing player here is the CIO!

Ask yourself, How many CFOs have you come across that have a full and clear understanding of the value an ‘Open and connectable’ versus ‘out-dated and proprietary’ IT department can make in driving business revenue growth.

This means that Board Executives are negotiating in the dark and potentially loosing large percentages of cost of sale value. There couldn’t be a better time for the CEO to bring the CIO to the table.

Businesses today are under more pressure than ever to deliver value to stakeholders, particularly when undertaking bold initiatives such as mergers, acquisitions or asset disposals. This is true not only for corporate acquirers but also for private equity (PE) or Venture Capital (VC) firms, whose strategy is leaning toward add on acquisitions as a means of growing their portfolio companies.

Under the current economic conditions and the rising cost of debt, corporate business management teams will require additional focus on effort in order to restructure or streamline operations, and specifically the IT departments of acquired businesses to deliver success in the absence of financial engineering. For a while now Information Technology (IT) is fast becoming a key lever which management can use to deliver operational benefits — whether in reducing operational costs, entering emerging markets or scaling their business across multiple geographic regions. With the advances in technology and its impact on today’s business models, companies are increasingly pushing the boundaries to remain competitive. IT is one key area to do this — Technology should be looked at as a business enabler and not look at as so many boards still do today, as a cost to do business.

“The sooner that executive boards put the CIO or the IT department on their monthly agenda as a regular discussion point the better,” says Craig Ashmole, Founding Partner of London based CCServe consulting. In my humble experience and far too often I see the CIO struggling to get the ear of the CEO or even agendas on the board table; businesses need to view IT as a business enabler rather than viewed purely as a cost centre.”

Part of the reason the CIO is not at the board table is that often they do not speak the language of the business board executive. Technology scares most senior board members and until the Generation Y and Generation X group get into those senior positions we will continue to see a disparity with Technology and Fiscal business matters.

The CIO challenge is to do his/her bit too, they really need to fully engage with the commercial business functions, and stop hiding behind technology to protect themselves. The ‘head-in-the-sand’ CIO will have a rapidly growing threat from the likes of the CMO or emerging CDO Digital Officer. Understanding the business functions that deliver revenue is a key focus going forward.

With the fluid market of M&A today there are two clear distinct areas a corporate or global business can go with this. One; is to look at how costly it will be to split companies up or carve out elements that are no longer key areas of business growth for that organisation and IT efficiency should be at the forefront, not just fiscal separation.

The other area on the acquiring side of an M&A transaction – Many CEO/CFOs look at the cost of acquisition proposed by the big 5 consultancy houses, often building in huge elements of ‘cost of sale’ to mitigate IT integration risk especially where transaction teams are uncertain.

“Making ones own IT and infrastructure easy to connect with while utilising open standards or cloud services could help the process of bringing together two disparate lines of business,” Craig Ashmole goes on to say, “More importantly M&A is about the shortest time to ‘joined-up’ business revenue growth which gets the attention of the CEO. Well prepared IT and infrastructure are key success elements to that joined-up process.”

There is a large growth of non-accounting technology focused personnel being hired into the Big-5 consulting transaction teams as more emphasis is given to IT & Technology within the merger/carve-out transaction process. This however should be a balanced process, in my opinion, with ones own CIO office within the organisation. What an IT department or CIO office may lack however is in the broader wider exposure that seasoned interim independent consultants might bring to the negotiations. Independent interim IT consultants have often engaged in similar situations or have awareness skills from engaging in many other organisations as they move from assignment to assignment.

Whatever the CEO or board choose to do as they grow through acquisition, or transform through business carve-out, they have to put the IT agenda firmly on the boardroom table and should seriously consider taking advantage of the experience and quick turn-round support that so many senior and interim consultants have to offer, to support their own CIOs.

Having spent a majority of my career working with and supporting the Corporate CIO Function, I now seek to provide a forum whereby CIOs or IT Directors can learn from the experience of others to address burning Change or Transformation challenges.

Craig Ashmole

Founding Director CCServe

The CIO becomes the Chameleon In Chief

The CIO becomes the Chameleon In Chief

by | 29 Jun 2015 | Consulting, Technology

We are seeing a high volume of discussion on the expectations of the CIO and the need to change tactics

The two-speed CIO just isn’t going to cut it – tech chiefs need to be able to respond to changing environments and requirements more quickly than ever.

he modern CIO must act like a professional chameleon, changing their form and their IT function to suit the fast-changing business environment.

Analyst Garter suggests CIOs are fully aware that they will need to change in order to succeed in digital business, with 75 per cent of IT leaders saying they will need to adapt their style and skills during the next three years. The analyst talks of the need for executives to adopt a bi-modal stance to IT.

Modern CIOs, suggests Gartner, need a rock solid and efficient IT operation that, frees up time and resources for innovation. So, does the idea of a bi-modal CIO resonate with IT leaders and how can technology chiefs change their style to suit business need?

Does bi-modal IT resonate with CIOs?

Former CIO and digital advisor Ian Cohen says the keys to success in the digital age, such as understanding product management, behaviour, and sentiment, often have very little to do with the traditional view of enterprise IT. In fact, Cohen says the often used description of a bi-modal IT is nonsense.

“I still hear people talking about the need to manage both the back and the front office as if they are two separate things and are all you need to consider,” he says. “If you understand the power of technology, you’ll know that IT has always been multi-modal. The best CIOs already have responsibility for a broad range of digital transformation projects as part of their portfolio of management skills.”

Gartner says as many as 89 per cent of CIOs believe that the digital world is creating new types and levels of risk for their business. What is, perhaps, more surprising is that 11 per cent of CIOs do not recognise the change. For such IT leaders, a wakeup call is surely required. And as Cohen suggests, that moment could be fast approaching.

“If you don’t have that focus, there’s a big risk that you won’t be a CIO for much longer,” he says. “Ultimately, digital needs to be everyone’s responsibility – no single executive can own the digital agenda. But someone has to be the catalyst for transformation and the best CIOs are agents of change. It’s not about being bi-modal, it about your organisation – and the technology that enables and supports business – being multi-modal.”

Research suggests technology chiefs do understand the importance of responsiveness. Consultant Deloitte reports that more than two fifths (41 per cent) of executives recognise the importance of an agile delivery model to mature IT organisations. There is, however, confusion about how this state might be reached — and Tullow Oil CIO Andrew Marks is another executive who believes the phrase bi-modal IT is nonsense.

“There’s a lot of talk about the evolution of the CIO role, but technology management is, and always has been, multi-speed,” he says. “While IT leadership does change over time, it’s impossible to say how the position will change in the future or how many years it might take to reach the next stage of leadership.”

Marks’ suggestion is that the act of being a CIO is directly related to the context of the business within which an individual operates. And there isn’t a “CIO to order”; your career could go in any direction, such as working in operations, working for a start-up, and then returning back to work in IT.

“I don’t think you need the badge of successfully transforming a business through IT to be considered for your next role,” he says. “If you’re not into running continuous change initiatives, you will still be involved in milestone events, yet these tend to be subtle changes, rather than complete organisational transformations.”

How can CIOs change their style and meet business need?

The modern CIO, therefore, needs to be a multi-modal chameleon. There is an almost limitless amount of variations in form and function of the role due to the different demands in host organisations. What is more, some CIOs will not necessarily find it easy to adopt the right stance.

Stephen Hand, former CIO and principal consultant at Consult 360, says a willingness to think differently – particularly in regards to innovation – can be a big ask for IT leaders. Unlike other c-suite peers, technology professionals are not necessarily used to thinking in new and radical ways.

“The IT professional’s longstanding focus on governance, strategy, and information means many technology executives have more in common with the finance chief than some of their more entrepreneurial executive peers, especially those in the marketing and sales departments,” says Hand.

But an insular style of leadership is simply not an option. As businesses look to gain a competitive advantage from digital transformation, engagement seems to be the watchword for IT leaders, who must continue to spend less time in the data centre and more time facing internal and external customers.

David Reed, head of information services and infrastructure at the Press Association, picks up on this point, suggesting that successful CIOs spend as much time as possible trying to understand how technology can make a positive impact to the overall business.

“IT must align with both internal and external business objectives,” he says, stating that stakeholder management is an absolutely critical success factor for modern CIOs. “If the technology you implement doesn’t do anything for the bottom line, it’s a waste of time, and will lead you down the path to failure.”

Engagement requires commitment on both sides. Such close working is engrained into the working culture at Top Right Group. The media firm’s IT director Sean Harley says the technology team supports the firm’s product managers that are delivering new services for customers. Many of the projects being delivered have a strong digital element.

“Customers today want social interaction and personalisation,” he says. “Does a dedicated CDO give you an advantage in those areas? It’s debatable, but what I do know is that a decent product manager who knows their sector – and who works hand in hand with the technology team – can deliver those benefits. And that’s what we see in our organisation.”

Having spent a majority of my career working with and supporting the Corporate CIO Function, I now seek to provide a forum whereby CIOs or IT Directors can learn from the experience of others to address burning Change or Transformation challenges.

Craig Ashmole

Founding Director CCServe