The Future of the Chief Information Officer

Jim Stikeleather, Chief Innovation Officer, Dell Services, discusses the changing role of the CIO

With the complete fusion of technology into the modern enterprise, technology and business have become inseparable. Together as one, they are needed to address the bigger world, the bigger society, in which a business must operate. And it’s that bigger world that has changed as a result of the hyper‐connectivity of the Internet that, in turn, has given rise to total global competition and social networks where the future is being discussed, debated and transformed.

It’s in this context that the role of the CIO comes into question. From compliance to cloud computing, from budget cuts to social networks and business innovation: it is clear that the CIO is living in turbulent times. What will be on the CIO’s agenda ahead? Will there actually be a CIO in the future?

In the past, information technology was about productivity; now it’s about collaboration, a shared information base and collective intelligence—the wisdom of crowds, social networks and cloud sourcing of unimaginable computing power, all in the hands of everyday people.

It will indeed be informed leadership, not command‐and‐control management of computing and information resources that will shape the future of companies in the current era of global economic crisis and unexpected change. Agility is no longer an option, a nice to have. It’s the entry price. There is much to learn and cultural barriers to overcome, but the company of the future will not be the company of today.

As we shift from IT with a focus on productivity to business technology with a focus on collaboration; and as we shift from systems‐of‐record to systems of boundless collaboration backed by endless computational resources available to all, the future is here now.

Contemplating any company’s transformation to adapt to the changed world, the implications for IT professionals are profound. Companies will need a far greater contribution from IT than ever before, but that contribution will be of a substantially different nature. For the creation of an adaptive enterprise, a system‐wide view of the company is needed.

Building the process‐managed, real‐time, “social enterprise” will demand innovation centred on the discipline of “general systems thinking” from a new generation of IT professionals, where multidisciplinary skills now outweigh yesterday’s technical skills.

Just as today’s popular title of CIO evolved from programmer to EDP manager to IT director, get ready for a new title that reflects the new skill set needed for leadership as companies go beyond IT and embrace business technology.

CEOs and CIOs won’t be the ones who do all the weak‐ties work. Weak ties are connections to people that you may occasionally come across – a friend’s friend or online communities that share special interests outside of your ordinary interests – and they contain much less redundant information which is often more important for gaining fresh information, connecting new dots and thinking outside your own box.

Instead CEOs and CIOs will be the ones who provide the environment, guidance and the tools for knowledge workers throughout the workforce to capitalise on weak-ties. This also means turning decision making upside down, at the bottom of the organisational pyramid, with front‐line staff where actual events take place.

The pillars of an IT investment have been to invest a relatively large sum of money in a long project cycle, and then wait for a payback by gambling on the stability of the situation. At the end of a given IT investment cycle an enterprise should have a permanent competitive advantage. The end result of this approach is that the ongoing costs of IT have increased so much that the headroom in the budget for new investment continues to decrease. When funding is in short supply and stability non‐existent, the traditional pillars for starting new IT projects are not generally acceptable. So CIOs should stop fooling themselves.

In reality, much of the IT estate is, a requirement to stay in business, pretty stable in terms of the rate of change, a genuine overhead, and should be treated as such in terms of ruthless cost management. On the other hand, the value from using new business technology that CIOs are aspiring to, is focused on individual parts of the business in doing what they do uniquely, but doing it far better. That’s not part of an enterprise‐wide cost recovery overhead model of funding. It’s a directly attributable cost to a specific business activity—and that’s where the elasticity of the cloud computing model kicks in.

The pressure for new projects comes from two directions. One is from the cost‐cutting CFO. The other is from specific functions directly related to the need for intelligence, decision support, and building new online products and services to sell. One of the key advantages of cloud computing is not just that we can build and deploy new business applications rapidly and at low cost, it’s that we can implement new revenue‐generating business models by using situational business processes in the cloud.

The challenge for the CIO is to make sure that this happens in a coherent and cohesive manner in the context of the entire enterprise. Taking on such a role with a direct hand in supporting innovative business models is the challenge that CIOs are currently grappling with.

In business life today, employees and those external parties who do business with our enterprises are evaluating and using technology as a key part of their work, and their business units’ successes. In response to such changes it’s time to consider how to adapt the funding model of the last century to one more suitable for the coming decades, especially in light of unpredictable change in the global economy.

With business technology the focus is on people, communications, and collaboration, not computers and data. The CIO role has evolved from custodian of the infrastructure under the CFO to a business leader with a seat at the executive table. The next‐generation CIO is a strategic agent for business transformation. In the most advanced firms the CIO is the most likely executive to move to CEO. The next‐generation CIO is best positioned to manage the creative‐destruction power of technology in the face of today’s unexpected change and to craft corporate strategy.