The development of business-driven digitization initiatives, with added power from AI, puts new demands on tech leaders. We believe that the CIO remains the key to success, while the CIO role needs to be updated, with the “I” retaking center stage.
The CIO role first appeared in the 1980s, coinciding with the breakthrough for personal computing which accelerated the digitization of workplaces and businesses.
Right at the turn of the Millenium then saw the breakthrough for Business Intelligence. The awareness that you can extract insights from data – when digitalized – raised new demands on controlling and managing growing data volumes. From these needs, another tech management role evolved, the Chief Data Officer (CDO), focused on data and analytics.
Eventually, the CDO banner was hijacked by sales and marketing, employing “their” Chief Digital Officer for the mission to digitalize sales channels and dive into e-commerce.
In the 2020s, we have observed a trend where the CDO is being joined by additional tech leaders, such as the Chief Analytics Officer (CAO). And most recently, the jury is contemplating whether AI also calls for a corresponding title, CAIO. Sorting out this acronym soup, we are unconvinced about the need for all these diverse tech management roles. Time has come for the CIO to step forward and claim overall responsibility.
Everything-as-a-Service
The pace of tech development is ever increasing. It’s never been easier for providers to launch new digital services, also promising lightning-speed implementation. When ChatGPT launched in the fall of 2022, it reached one million users within five days. Barely two years later, the service has more than 180 million users.
Organizations are no longer dependent on the IT department for sourcing and onboarding new services and tools. For that, we should thank servitization and convenient, cloud-based delivery models (Software-as-a-Service, Platform-as-a-Service, etc). Development and integration is greatly facilitated by new lowcode/nocode tools. From this trend also follows that more specialized, niche services are being launched. The conventional CIO vision for enterprise-wide business applications capable of serving the entire organization has taken the back seat.
Another significant outcome from this new reality is that organizations (or departments) can be extremely agile, quickly adding new tools available as-a-service from specialized providers, without the need for nuts-and-bolts tech skills.
New challenges: silos and sprawl
When each business function acquire tools focused on their specific needs, new challenges arise. Above all, it feeds a fragmented IT landscape with technical and informational silos. It also comes with a loss of control and adaptability from being a captive of suppliers, forced to adapt their style of service management. Obviously, supplier (in)dependence has always been a factor in sourcing decisions and a well-known CIO challenge, but today's “candy store” which promises instant digitization of virtually every part of the business adds a potential trap. The supply side diversity is appetizing, but fundamentally incompatible with applying long-term, strategic thinking to sourcing and vendor relations. Excess choice fosters technology and information sprawl.
The Chief *Information* Officer
The CIO's qualifications and authority have long rested on a blend of tech/operational expertise and business acumen. A CIO leading a team which delivers reliable, efficient services while providing business support that matches the various needs of the lines, in tune with management visions has been highly praised.
But when business lines have the option to select and purchase their preferred tools directly from suppliers, including maintenance and operations, that will obviously be a concern for the IT department, and more specifically, the CIO role.
We believe that the CIO role is still important, but needs a new job description to create value and stay relevant. After decades of inventing new tech leadership roles, it is time to return to the core and reinvent the Chief *Information* Officer.
From service provisioning to sourcing requirements
As businesses become increasingly digitalized and tech operations are outsourced, information management emerges as a critical function. But without someone taking charge of digitization and managing information assets at the enterprise level, there are few incentives for departments to look beyond their own information needs.
Interaction between departments and functions becomes difficult with different providers having little understanding of, or incentive to support, information management outside their respective domains. That is when we really need the CIO – to ensure that requirements for new tools mirror the enterprise view on data access and management.
Such provisions are really nothing new. For example, Business Intelligence and analytics tools will only reach their full potential if they can effectively access and ingest all relevant data. We now embark on the next phase, with AI powering and enabling new ways of using information. This makes data provisioning even more central. To train the AI models, access to appropriate and accurate data is critical.
Open software interfaces for bridging and preventing silos, while facilitating integration may then be decisive for choosing your provider – a typical factor where a CIO will catch what business lines are missing.
In addition, there are more significant requirements that should be covered by providers, with cyber security perhaps being the most important aspect other than the strictly functional capabilities.
The traditional IT department used to define its organization from the needs to manage applications and infrastructure, a model that becomes less meaningful when the services are implemented elsewhere. We observe that the CIO's focus will shift towards information management, integration and security.
From this follows new demands on leadership, and that the CIO needs a different management toolset. It will be a critical task to define rules and policies, establish these within the organization and ensure compliance, all the way to the suppliers. To create relevant and precise enterprise tech policies, a solid grasp of suppliers' technologies as well as business needs and current legislation is required – a mission for which the CIO is perfectly suited.
Policy maker, diplomat, visionary
Being the Master of regulations and policies is not enough. You also want your CIO to be a visionary with persuasive powers to enforce the rules and ensure compliance across the organization. A collaborative mindset is essential when approaching business leaders with budgetary powers, who may also (surprise!) possess considerable tech expertise.
We encounter more and more tech-savvy managers in various functions who really know their stuff when it comes to digitization, far from a Black Box approach to IT. It’s a positive challenge for the CIO to include these colleagues and find ways to work with resourceful people outside their team.
The CIO 2.0 should use a humble approach, build trust and deal with the lines of business. The role model is the responsible parent who not only sets the rules but who is also a recognized authority, the one you turn to for building a future-proof tech stack. Effective governance is becoming the most essential vehicle for the CIO to reach her objectives.
The CIO is one of the few management roles, perhaps along with the CEO, who was trained to apply a cross-functional view of the organization. The CIO understands the risks of building silos and “Quick and Dirty” solutions with negative long-term value. The CIO is prepared for the role as an architect who creates the foundation for business execution, then acting as the conductor who will orchestrate all available resources in a world of SaaS and low-code solutions.
We believe that a “born again” CIO 2.0 is also the tech leader of tomorrow. That's not to say there isn't room for other CxO roles in the digital realm, but without healthy skepticism, you will likely end up with too many senior titles, each spelled to reflect the latest hype. A hotshot Chief AI Officer with an obscure mandate is probably not the leader that your organization needs today. It is time for the CIO to step up and take the role of the comprehensive tech leader that the modern organization needs.
Author: Dan Ekholm, Group CIO på Dometic and Johan Nodén, Data Architect at Random Forest
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Dan Ekholm
Johan Nodén
Would you like to hear Johan and Dan discuss this blog post? Listen to Episode 100 of Data-Podden. (publish 25 april)
