The metamorphosis of the CIO

It should come as no surprise to the readers of this column that the CIO’s role is undergoing significant change. Gone are the days where the CIO was relegated to being the ‘efficiency executive’. Instead, today’s CIO is a catalyst for strategic value and a critical enabler of business strategy.

Indeed, most CIOs – according to KPMG’s 2010 Global Survey on the CIO agenda – now see IT as a key driver of business innovation and enhanced productivity. More than half also think that IT will provide competitive advantages throughout the organisation and improve overall customer satisfaction.

Underlying this trend is a clear shift in focus from the ‘internal’ opportunities, such as process automation and ERP systems, to ‘external’ opportunities that create new business and drive revenue growth. At the same time, an overwhelming number of CIOs are also looking to squeeze out latent or unrealised value from their existing systems and processes.

In return, CIOs are increasingly expected to contribute to the overall business strategy, taking an enhanced role in organisational management and reporting directly to the CEO. In some cases (such as Philip Clarke at Tesco), the transformational value of CIO is even being recognised by their ascendancy into the CEO role.

For the majority of CIOs, this metamorphosis is characterised by three main issues that sit atop their agendas:

Extracting value – In the aftermath of the recent credit crisis, everyone is focused on securing value for their money. For CIOs, this means not only achieving full utilisation of their existing systems, but also putting downward pressure on sourcing costs.

In particular, CIOs will be taking a hard look at the cost versus quality ratio that they are currently experiencing from their outsourced vendors. The UK’s Department for Business Innovation and Skills (BIS), for example, recently saved an estimated £5m per year by renegotiating the terms of a single contract with an outsourced vendor.

Enabling innovation – IT leaders are increasingly focused on implementing technologies that foster greater innovation throughout the organisation. For some industries, such as Financial Services, this means more sophisticated regulatory compliance and data management technologies that help deliver new and innovative services to their clients. For others, the focus is on implementing new technologies that enhance efficiency and drive down costs (for example, cloud computing or web conferencing).

Driving productivity – Two out of three global CIOs are also firmly focused on driving enterprise-wide productivity gains through technology. Advances in business-oriented collaboration software are already changing the way many businesses design, develop and execute their business strategy. With the increasing adoption of these tools, today’s CIO is well positioned to transform their organisation’s culture, efficiency and overall productivity.

For most CIOs, the next few months and years will be a true test of their ability to adapt to this metamorphosis. While many will embrace the change, seeking out opportunities to drive innovation and creating sustainable productivity gains, others will first need to refocus their function from mere operational cost centres to effective business strategy drivers.

About the author:

Bryan Cruickshank, Global Leader for KPMG’s Technology Advisory practice, is a new columnist to CIO Magazine and will share lessons, insights and best practices from his experience working with global CIOs and IT leaders. Mr. Cruickshank can be reached at bryan.cruickshank@kpmg.co.uk.