A few weeks ago, I wrote a post on whether the CIO is going to be replaced as head of the IT department by the CFO.
A little more recently I had an absorbing conversation with former BT CIO and salesforce.com chief scientist JP Rangaswami, which touched on the subject of what the CIO of the future will look like.
The interview has already been detailed in a piece about the trends that impact on the development and deployment of cloud services, but the last trend he mentioned is very relevant to the future CIO debate.
It centres around the CIO’s ability to participate in the definition of business strategy in order to make decisions on where to invest in in-house IT or outsource to third parties.
We also discussed a broad trend that affects all C-suite executives which points towards a blurring of the boundaries between the different roles at that level.
Put simply, CXOs need to be renaissance men and women, who have an awareness of business processes outside their immediate sphere of interest.
This includes CIOs, who, as a group are still emerging from the server-room silo, but in the future will need to have a much wider skill-set while still retaining the deep technical expertise that gives them their special value.
When I asked Rangaswami about this he had a couple of points to make. Other CXOs are also limited at the moment in their outlook, to be effective masters of the corporate IT capability.
He said CFOs tend to look at the past to predict the future. When dealing with a transformation agenda, past trends have limited use.
COOs deal in the now and are concerned with maintaining the steady state, rather than growth and change. So again, they may lack the freedom to imagine the future without being constrained by present business realities.
Rangaswami agrees that all these titles will become more irrelevant as time goes on, but he also suggests four key characteristics that define the IT leader in this new CXO environment, whatever they might be called:
1 The ability to define scope
Whether it’s an HR manager thinking about contract versus permanent staffing, or a CIO thinking about outsourcing an infrastructure swap-out, CXOs will need to be able to decide what ownership model needs to be deployed to the appropriate business process.
This is very much around the ability to build third party partnerships, when they are needed. It’s also about knowing what is business critical and needs to be kept in-house.
2 The ability to federate
Business technology enables decision making to be pushed further down the management hierarchy. A fluid business environment needs junior managers to be able to make business decisions on the fly without referring back up the chain.
But this leaves the business strategy becoming fractured by too many people making autonomous decisions. CXOs need to be able to define where the balance lies between centralised control and federated freedom.
This is essentially an issue of governance which is already emerging as a CIO remit.
3 The ability to recognise the strategic from the tactical
Solutions to specific business problems look different if you change the time horizon. CXOs need to be able to act swiftly to accomplish short-term goals.
At the same time, they need to be able to pull back and look at the bigger picture, staying true to the long-term business goal.
This flexibility in approach allows the business to react quickly to changes in the market without losing grasp of its own identity.
4 The ability to see the business value of knowledge
Much of the value of a business is placed in its tangible assets, but the aggregated knowledge of the business is often ignored as a critical business asset.
Rangaswami suggests that often business knowledge remains fragmented because managers like to have ownership of their own piece of it. They discount what other departments know as less important to the business, because they don’t know what data lies outside their sphere of influence.
CXOs need to be able to share knowledge to the rest of the business and have an awareness of the capabilities of other departments, if they are going to plan the best strategy for the organisation as a whole.
It’s pretty conceptual stuff, so I asked Rangaswami what characteristics are not part of the future CIO’s skillset, to help to tie the definition down a bit.
What he suggested is interesting because some of his list is considered part of the IT remit at the moment and this is what CIOs are going to have to let go of:
1It’s not about route to market, which is a characteristic of sales and marketing, whose job it is to engage directly with the customer. This means digital channels like ecommerce and CRM are outside of the future CIO’s purview.
2It’s not about setting the wider investment agenda. Essentially the CIOs role is concerned with the flow of information, but that isn’t necessarily the biggest investment concern of the business. Rangaswami pointed out that CIOs are traditionally deficient in risk assessment and control of the wider investment strategy needs this in spades.
3It’s not about setting the values or the mission for the business. CIOs, whatever they are going to be called, are concerned with turning vision into reality. They use the business values and mission statement as their guiding stars to get the business where it needs to go, so it’s not useful to be making them up. They are doers, not dreamers, which is the privilege of the CEO.