CIOs Need to Evolve or Be Left in the Dust

The centralized IT function of old is under tremendous pressure from trends such as cloud computing, proliferation of consumer-focused mobile devices in the enterprise and Big Data analytics. According to a report by The Economist, as these trends erode the entrenched IT structure, CIOs and their teams must better align themselves with business needs or find themselves put out to pasture.

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Fri, June 22, 2012

CIO — For decades, business has looked to a centralized IT function to control technology infrastructure and offer services to business units and employees. Now new technologies—cloud computing, consumer-focused mobile devices in the enterprise and Big Data analytics-are eroding that structure. CIOs and the IT functions under them must prepare for transformation or be left in the dust.

According to a new report, "The C-suite Challenges IT: New Expectations for Business Value," written by The Economist Intelligence Unit and sponsored by Dell Services, C-suite executives believe the IT function is poised for a major transformation: 57 percent of the 536 C-suite executives surveyed expect their IT function to change significantly over the next three years and 12 percent predict a "complete overhaul." Fully 43 percent say their company will increasingly use IT as a commodity service that is bought as and when needed.

The C-suite Challenges IT: New Expectations for Business Value

The Economist Intelligence Unit reports that the changes these executives see on the horizon have the potential to transform not just the IT function but the entire business, creating new opportunities for companies to develop innovative products and services, connect with customers in new ways and rethink traditional business processes. These changes present both danger and opportunity to CIOs and their teams.

"When I was coming up, CIO stood for "career is over," says Hord Tipton, who served as CIO of the U.S. Department of the Interior from 2002 to 2007 and is now executive director of security education and certification authority (ISC)2. "Now IT is a critical component of the business. Nobody does business without IT."

CIOs Must Speak the Language of Business

But while IT may be central to the business, the CIO and his team can be left behind if they can't find a way to address the C-suite's core needs in language that expresses the business value of technology investments. The report found that CIOs and C-suite executives don't see eye-to-eye on the alignment issue: two-thirds of CIOs feel their function is well-aligned with the business, but fewer than one-half of C-suite executives feel the same way about their CIOs. Only 46 percent of C-suite executives say their CIOs understand the business and 44 percent say their CIOs understand the technical risks involved in new ways of using IT.

"Ideally, business executives should be able to rely on their CIO for a briefing on the technical and business risks involved in new ways of using IT," the report states. "But fewer than one-half of C-suite respondents say their CIO has a good understanding of these risks; up to one-quarter say it is poor. There are also gaps between the CIOs and their C-suite colleagues about how and where IT investment could best add value."

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