The New CIO Imperative
REPORT PREVIOUSLY PUBLISHED BY OLIVER WYMAN
The IT business environment has been disrupted in the last five years — by smartphones, cloud computing, social media, sensors, and the Internet of Things. And the pace of change is accelerating, as digitization and the impact of new competitors drives the day. If organizations struggling to keep up with yesterday’s disruption want to do more than tread water, which means falling woefully behind digital natives and rapidly digitizing incumbents, they need to plan for tomorrow’s disruption.
No one knows what the digital world will look like in 2020, but we know that today’s legacy Oracle/Microsoft/SAP systems are fast turning into yesterday’s mainframes. And we know that new technologies will continue to radically disrupt traditional industries and spawn whole new categories. It’s clear that if the IT function does not change to keep pace with widespread digitization, it will fail.
Where does this leave CIOs? Because legacy systems are not going anywhere, anytime soon, CIOs must continue to maintain these stable and robust (albeit aging) systems. At the same time, CIOs must help build a new digital, agile IT infrastructure that is fit for the future. Thus, the CIO has to maintain, build, and run a two-speed IT infrastructure.
Complicating the task, the CIO used to be the sole IT stakeholder, but IT capabilities are now so broadly distributed throughout many organizations, and digital technology is so ingrained in both development and delivery of products and services, that every company is a de facto software company. In addition, firms might have a Chief Digital Officer, Chief Innovation Officer, Chief Science Officer, or Chief Data Officer alongside the CIO.
All this puts the CIO’s position and power base at risk. One risk is that the CIO will become marginalized as the “pipe provider” — treated as Chief Technology Officer instead of Chief Information Officer — and perceived as stalling progress, as the bastion of “old guard” legacy technology. Another risk is that the CEO may opt for a second “fast IT” CIO to focus on digital technology to keep pace with the leaders. To maintain their role, CIOs should seek to take ownership of the transformation of their business’s agility.