8 business concepts IT leaders should master

CIOs know they must be business leaders, but the business knowledge they must bring to the proverbial table is something of a moving target.

There are, of course, the management fundamentals and the longstanding executive skills that remain constant must-haves. But there are, too, a list of topics that bubble up and dominate based on current trends and present-day realities.

Speaking to that latter point, CIO.com polled analysts, consultants, and CIOs about the must-have business concepts of today. Here’s what made their list.

Key business drivers

Every organization has a unique list of the internal and external activities, factors, and resources that impact its operational and financial performance; they and how they interact come together under the broad umbrella of key business drivers.

As CIOs have moved from technologists to executives over the past decade or so, they have had to better understand how their organizations operate and make money. But the upheaval of the past few years has brought the need to fully grasp what drives the business and how they do so to the forefront.

“By deeply understanding this, the technology team can partner with the business to design and implement technology solutions that not only continuously improve on the products and services customers rely on, but also create greater value for the customers,” says Mark Mintz, corporate senior vice president and CIO of Charles River Laboratories. “This is more important than ever now because technology’s role in creating value is bigger than it ever has been.”

Dynamic pricing

The 2021 Gartner CEO Survey: The Year of Rebuilding found that sustained profitability is one of the top areas drawing CEO attention. As part of that, CEOs are talking about dynamic pricing — an approach to setting the price that a company will charge for its product or service that allows for rapid change based on various market conditions and considerations.

That CEO interest in dynamic pricing in turn necessitates others, including the CIO, to understand how it works and how they can help enable it, says Irving Tyler, a distinguished research vice president and key initiative leader with Gartner’s CIO Research team.

“Every organization has some form of product or service that has to have a pricing model. In many instances those prices can be fairly stable, but one of the challenges of today, where consumers have a lot of sway and access to information for competitive analysis, is the need to start adjusting prices and knowing where, when and how fast,” Tyler explains. “This concept of dynamic pricing is something that CEOs see as important to keeping up profitability. And when top executives realize this is a capability we need, they start assigning accountability.

“This requires lots of data — the complexity of making that pricing decision can’t just be a hit or miss; you can’t just put a price out there and see if it sells. It takes technology to power it,” he adds. “So it needs the CIO to provide leadership not only to provide the right tech solutions but also to think about the design of the capabilities. The CIO needs to know more about it so they can be part of the decision-making, to get the right tech, the right team, and the right resources.”

Finance, financial markets

For years now CIOs have been advised to understand how their companies make money, speak the language of business, and calculate the value of IT in dollars. But Leona Thomas, senior delivery director with the global BAS transformation team at the consulting firm Slalom, says CIOs should amass a broader knowledge of financing, financial markets, and the global economy.

“It’s important to understand how the financials of the business world work, so you understand how they impact other issues, whether it’s dynamic pricing or ROIs,” she says. “These should be concepts you know off the top of your head, and not something you have to take a step back for.”

Others agree, citing current trends as pushing this topic to the forefront for many CIOs.

“The long low inflation, easy capital environment allowed for a margin of error that has disappeared now that inflation is back and capital is becoming expensive again,” says RJ Juliano, senior vice president and chief information and marketing officer with Parkway Corp.

He adds: “IT is a big user of financial resources that, properly chosen and managed, are investments in the company’s core goals.”

Data privacy laws

As of April 2022, four US states had data privacy laws on the books, one state had recently passed legislation, and 11 more have bills under consideration, according to the International Association of Privacy Professionals (IAPP) Westin Research Center. That’s on top of existing international laws, emerging changes to those laws, and proposed new ones.

Although they don’t have to become lawyers, CIOs do need to understand the legal and business ramifications of these laws and how their technology strategies intersect with those, says Kristen Lamoreaux, president and CEO of Lamoreaux Search.

“It’s often thought of as a purely legal problem, but you [as a CIO] need to be an expert in this space in the countries in which you do business. The complexities of today, pulling data from social media as well as internal streams, where and how data is stored, how you’re using it, cross-border data transfers, means that in a click of a mouse your entire reputation can be put at risk.”

The geopolitical environment

Similarly, Jeff Wong, global chief innovation officer with professional services firm EY, says CIOs should have a stronger grasp on the geopolitical landscape and how world events, political decisions, and related actions could impact not only their organizations as a whole but how they deliver technical and digital services.

“With changing global dynamics, you’ll no longer have global standards. And you may have to think about different service providers in a way that you haven’t had to before,” he explains.

Case in point: US government concerns over Hauwei and ZTE led to federal bans on the use of their equipment, a move that has both design and cost implications for companies across the United States.

That’s just the start, Wong says, noting that other national policies and geopolitical actions affect how and where organizations can store data, what and where they can use certain algorithms, and even what cloud providers may be used — all of which is information that many CIOs need to track and understand.

The customer journey

Wong advises CIOs to know where the company is getting customers, how it does customer acquisition work, what are the price points of the customer acquisition function, and other similar knowledge around its company’s customer function.

“The reason why it’s so important today is because customers have shown that they have a willingness to change how they shop, how they get things, and what they’ll pay,” Wong says.

Surveys bear this out. Some 17% of U.S. consumers say they usually or always abandon their purchases due to a poor customer experience, according to a study from Emplifi, a customer experience platform company. Factor in those US consumers who will sometimes do this, and the rate jumps to 52%.

The report also found that nearly half of US consumers say previous good customer experience with a brand, the speed of availability/delivery, and a large selection of products factor into their decisions when considering where to shop for new purchases.

And 65% of US consumers said they’d pay at least 5% more for products and services if they knew they would receive outstanding customer service.

CIOs can’t afford not to understand such dynamics.

“Becoming ‘customer obsessive’ is the top business concept that CIOs must master to be successful,” says Edward Wagoner, CIO of digital at JLL Technologies. “Historically, IT teams have gotten requirements from businesspeople or through sales and product teams that meet directly with customers. We’ve all been victim of a technology product that works but fails to meet the needs of the customer. The closer IT can get to the customer, the better we can understand what they value and what they need.”

Human-centric work

With hybrid office environments here to stay, experts say CIOs must now understand how to make them work better.

Gartner’s Tyler says this means organizations will have to transform their workplace from an office-centric design to a human-centric one.

The concept of a human-centric workplace goes beyond enabling virtual work and online collaboration, he explains. It’s instead a deep dive into building an environment that supports the people.

“Now as we’re all going back into the office, we have to think about what that looks like. We have to rethink work. We have to realize [workers] are human beings and think about what’s the right balance of working from home versus the office, how do we deal with scheduling, how do we make workers feel connected, what works, what doesn’t,” Tyler says. “The CIO has to be part of those choices.”

Others agree.

“A lot of businesses just went through a forced transformation due to the pandemic. They are now identifying what has worked well, what has not and what they want to keep,” says Rebecca Gasser, CIO of Omnicon Health Group. “It also provides a unique opportunity to focus in on the employee experience and the future culture of the organization.”

Business resiliency

CIOs are typically seen as experts in disaster recovery, and are key participants in business continuity planning. But some IT leaders now say they have to understand business resiliency at a whole new level. Because more organizations have global reach through customers, employees, and/or service providers who stretch around the world, they’ve had to contend with issues such as domestic and international civil unrest and war in addition to a pandemic.

“Business resiliency has taken on a different connotation today. There’s a crisis management piece that to date CIOs have not been paying attention to,” Lamoreaux says.

Lamoreaux said these events have executives asking: What would we do if supply chains face further disruption, whether a major industrial accident occurred, when the next country implements a lockdown?

“And many have been turning to CIOs to help get them through these questions, to figure out how to do things faster, cheaper, find new routes, and make it more secure,” Lamoreaux says.