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In This HP Cloud Source Blog, HP Expert, Christian Verstraete will examine cloud computing challenges, discuss practical approaches to cloud computing and suggest realistic solutions.

The CIO of the future, an active member of the board

Digital world.jpgAt multiple occasions, I’ve talked about the fast digitization of our environment. Let’s take this a little further and start discussing what this means for the CIO and how his role in the enterprise may change.

 

As the world increasingly becomes digital, the CIO pretty much has his own destiny in his hands. Actually in researching for this blog entry, I ran into a Wall Street Journal article titled “ Wanted: More Directors with Digital Savvy” , discussing the fact most boards are scrambling to find members that understand mobile devices, social media and data analytics.

Shouldn’t that be core to the CIO knowledge and experience? Frankly, I believe in two types of CIOs moving forward. The ones that are ready to take on new challenges will become the advisors to the board. They may take an enterprise CTO type role and manage the digital assets of the enterprises. The others will manage the legacy and turn off the lights sometime in the distant future.

 

But what does the CIO need to become this trusted advisor. Let’s look at that in a little more details.

 

Understand the big picture

To add value to the board discussions, the CIO needs to understand the big picture, in other words, he has to grasp how the business operates and what the key objectives of the enterprise are. He does not need to be the expert on every business line, but must have a clear view of how things work. Only then will he be able to apply his IT knowledge and see where digital technologies can improve existing business or create new business opportunities.

 

The work on the board is very much teamwork where each member brings his own skills, knowledge and experience. But the team needs a common understanding of the task at hand. And that is new for the CIO. For the last number of years, CIOs have been asked to reduce cost while keeping supporting the needs of the enterprise. Lack of agility and digital awareness of the business users have increasingly introduced IT environments outside the reach of IT. BYOD, software as a service consumption, social media and others have blurred the enterprise information technology environment, increasing the security risk for companies, scattering data across multiple platforms and putting compliance in danger.

 

Business leaders often do not realize the potential implications of some of the “shadow-IT” decisions made. This is the first place where the CIO can help, educate and advise the board on what should and should not be done. But he should do more, he should highlight how technology can support the business objectives, being it in reducing costs, streamlining business processes or addressing new business opportunities.

 

Translate Technology in Business Opportunities

And that brings me to the second skill the CIO needs. Yes, he requires a good understanding of technology, although I would argue his understanding should be one mile wide and one inch deep. What I mean by that? He needs a wide understanding of the technologies at hand and how they fit together, what can be done when you combine them and how they can interact with each other. He should have enough technologists in his organization or his eco-system to explain the uttermost details if required. He does not need to do that himself.

 

But he should combine this with a second skill, the capability to translate that knowledge in business terms, in other words, explain the technology at extremely high level and then describe what value this technology would bring to the business if used.

 

Let me take a simple example, a message broker. The CIO could explain the fact a message broker can reliably and securely get a message (in other words a piece of information) from one place to another, and ensure the other party understands the message correctly, and the first party knows the message has been received. He may want to add a short discussion on the logging capability ensuring all parties can easily find out when a message has been sent, received etc. And then, if he is working in a manufacturing company, he could describe that such message broker would facilitate the interaction between the partners in the supply chain. He could point out the fact procurement could use such facility to share forecasts, production schedules and even orders. You see where I’m getting at.

 

In the example I have just given, I describe how technology can support existing business processes. Actually the CIO may want to go one step further and show how technology could help the enterprise innovate, creating new customer experiences, new markets, and new opportunities

 

Fuel Innovation using Technology

Here is where the CIO needs to work most closely with the other members of the board. Here is where he needs a deep understanding of the business. In the previous examples, the CIO responds with technology, explaining how technology can improve things the company is already doing. With the innovation approach, the CIO takes the lead, suggesting new things that could be done using technology. Whether it is with the CMO, the head of R&D, or any other line of business manager, the CIO now becomes the trusted advisor on how the enterprise can improve its use of technology.

 

An example is often better than a lot of words. Let me point you back to the example of a GPS company looking at using the cloud to improve its user experience, as I describe it in a previous blog post on innovation.

In simple terms, the CIO should become the CTO of the board. Now, the term CTO is amongst the least clearly defined ones. The Chief Technology Officer’s blog describes four potential roles for the CTO, one of them being the infrastructure manager. That is definitely not what I have in mind. But I believe the big thinker, the external facing technologist and the visionary role. If you go to the original article by Tom Berray, quoted in the blog entry, you will find in model 3 what might be a real good role model for the CIO of the future. And Tom highlights that the model 3 CTO should report to the CEO directly.

 

Should the CIO be part of the board?

This brings me back to my original question, should the CIO of the future be a member of the board? My answer is definitely yes. About one month ago, we had a tweet chat on the subject and somebody argues that if the CIO was on the board, there was no reason HR shouldn’t be. Well, with all respect for HR, but HR is a supporting function in the sense HR supports the business once it has decided what it wants to do. Traditional IT is also a supporting function, hence the reason most CIOs today are not on the board. But the CIO I describe in this blog entry is not supporting the business, he is advising the business on how technology can help them achieve more, and in some cases even fuels innovation and new business opportunities. That is definitely intervening in the definition of the direction of the enterprise, and not being a support function.

 

Are todays CIOs ready for the task?

Over the years I met many CIOs and have seen great role models. Actually most of those spent time in business functions. In the manufacturing industry, most of them actually ran a function in Supply Chain for a while, which I actually found quite interesting. I even saw a couple examples of CIOs combining their function with head of Supply Chain. Such CIOs have no issue in understanding the business and leading the company towards a better utilization of technology in our ever more digital world.

 

CIOs that come from the ranks in IT often have more difficulty understanding the business side of things. Not that it being impossible for them, and I actually met several which had a deep business understanding, but it is more challenging for some. It’s a different world to which they have not always been confronted. And so they see the business/IT relationship as an “us and them” kind of environment.

 

In the old days we called it business to IT alignment (BITA). It’s more applicable than ever now that information technology fuels the business, and in many situations, the business has an important digital component. It is a unique opportunity for the CIO and his team to step up and become the key advisors fueling the future of the enterprise. You don’t want to be the one who turns off the lights, don’t you?

Labels: cloud| CloudSource
Comments
dcschloesser | ‎08-22-2013 02:00 PM

Good post! A simple first step to become CIO or IT organization of the future would b to stop talking about business/IT alignment and the like. I often get the impression that everybody is part of the business except for IT. IT people tend to use the term "business" even when they talk about HR, finance or facility management. Although this may sound a bit trivial, it has significant implications if you are serious about it.

Thanks for updating new information about clouds. As an application developer you have shared lot of details about clouds. Also share your updated details about cloud in this website

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About the Author
Christian is responsible for building services focused on advising clients in their move to cloud, particularly from a business process and ...


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