Disruption, a term describing the raft of technology trends around cloud, social and mobile is taking on a different meaning for CIOs as they realise it is also happening, faster than ever, in their respective roles.\u201cHistorically, the CIO role has been internally facing, it has been about servicing internal customers,\u201d says Mark Baker, director of MIH Consulting. \u201cAs the world has gone more digital \u2013 with various incarnations of cloud, software-as-a-service, platform-as-a-service\u2013 companies are looking for the digital edge.\u201d\u201cInnovative companies\u201d like Amazon and Air New Zealand are seen as having this edge. \u201cNow, it is expected that companies have an element of their competitive strategy around digital.\u201d\u201cCIOs are now spending more time on competitive business propositions, strategies, how they embrace the 700 new things that have turned out this week because in the digital age everything is moving so fast.\u201d\u201cAs a consequence the technology discussions that used to stay in the backroom is coming to the executive table.\u201d The important thing to stop shadow IT getting completely out of control is to be the person who helps people get things done. Robin JohansenThis is how Baker, a business strategy consultant following a succession of CIO and chief operating officer posts in New Zealand enterprises including Foodstuffs Auckland and Fletcher Distribution, sums up the changed landscape CIOs operate in today \u2013 and how these shifts are affecting the role. His insights provide a relevant backdrop to the 2014 State of the CIO report, where CIOs across the globe, including New Zealand, reveal their current and future challenges.Based on the survey findings and interviews with New Zealand business-technology leaders, this year\u2019s report highlights some key trends that are rearranging the CIO portfolio and moving them into areas not traditionally associated with IT.Topping the list of disruptors are digitisation as customers, suppliers and business units embrace digital platforms, and the continuing rise of \u2018shadow IT\u2019 brought by consumerisation of technology and the ease of moving to cloud services without IT involvement. It is expected that companies have an element of their competitive strategy around digital. Mark Baker, MIH Consulting\nThe State of the CIO\nThe State of the CIO survey covered 722 CIOs across the globe, including 43 from New Zealand. A third of the New Zealand CIOs report each to the CEO and the CFO, while 16per cent report to the chief operating officer. Half of them are members of the business executive management committee. When asked about their focus and how they spend their time in their current role, the greatest number of New Zealand CIOs (30 per cent) said it was on negotiating with IT vendors, followed by redesigning business processes (23 per cent). Only7 per cent reported spending time studying market trends and customer needs to identify commercial opportunities.\nIn the next three to five years, though, they would like spend more time driving innovation (56 per cent of respondents), followed by defining and developing business strategy and leading change efforts (at 47 per cent respectively), and identifying opportunities for competitive differentiation (44 per cent). Identifying market trends and customer needs jumped to 28 per cent, and only 14 per cent wish to spend more time on negotiating with IT vendors.\n\nAs to which groups or business functions have budgets specifically earmarked for technology projects, the following are the top four: Operations (47 per cent), marketing (37 per cent), human resources (30 per cent) and finance (28 per cent).\nWhen asked what steps they are taking to enhance their relationships with executive peers, New Zealand CIOs say the top three ways are through frequent communication for IT transparency (81 percent of respondents); provide advice on initiatives, strategies and management (70 per cent); and attending each other\u2019s meetings (65 per cent).\n\nShadow IT is clearly a concern for CIOs across the globe. When asked whether they see shadow IT on the rise, 40 per cent said yes \u2013 with 7 per cent strongly agreeing and 33 per cent \u2018somewhat\u2019 agreeing. This sentiment is not far from the global results, with 9 per cent strongly agreeing and 31 per cent somewhat agreeing.\nBut when asked whether these projects developed without IT involvement are running into problems, 21 per cent strongly agreed, and 56 per cent somewhat agreed, or a total of 77 per cent. The global figure is not far off, 76 per cent.\nNew Zealand CIOs also admitted the challenge of balancing business innovation with operational excellence, with 9 per cent strongly agreeing to this, and 65 per cent somewhat agreeing.\nEach year, the report tracks the continuous pathway of the CIO to increasingly become strategic partners and trusted peers in the executive suite, and to be seen less as a cost centre. The graph above shows CIOs\u2019 views on how their business colleagues see them.\n\nSimultaneous reinventionsNew Zealand business technology leaders share pointers on thriving in this environment.The mind-set of a CIO has got to be around stepping beyond the traditional boundary of IT, looking after applications or infrastructure, says Andrew Crabb, head of enterprise solutions and services at Vodafone New Zealand.\u201cHow can I add value? How do I support the organisation in all they want to do in a totally different business market?\u201cTraditional businesses are reinventing themselves, everyone is on that mode,\u201d Crabb continues. \u201cA lot of the existing organisations will be swamped or surpassed by these new technologies.\u201dCrabb cites, for instance, that in the last five years, the major organisations have been online or virtual business, the likes of Google, Yahoo or Facebook.\u201cYou still need those traditional organisations but these organisations have to embrace new technologies in order to grow,\u201d says Crabb. Countdown supermarket, he says, is one such organisation that has done this by embracing online shopping. \u201cThey are taking a virtual business model and embraced new technology to move forward in a digital world.\u201cThe role of the CIO is moving away from systems and platforms, to data and analytics,\u201d Crabb notes. \u201cIt is about finding different ways of using information that is available to us that will be where a lot of new business models are emerging.\u201dHe says this is a positive development for the CIO role, but they need to evolve with the times. The role of the CIO is moving away from systems and platforms, to data and analytics. Andrew Crabb, Vodafone\u201cToday\u2019s CIOs are looking at the online market and mobility, particularly if the organisation has staff who are working remotely or working anywhere,\u201d says Crabb. \u201cWe are talking not just location, but virtual offices, virtual organisations.\u201dThe latter does not even have a physical address. \u201cBecause of that, everything they do relies on technology, whether that be mobility, the Internet, the online side of things.\u201dTake charge of evolving your roleBrett Hobbs, group IT manager, BCS Group, says he keeps track of change management strategies using Amazon as a benchmark.BCS Group provides logistics hardware, automation controls and software solutions for the aviation and logistics sector. It is not Amazon\u2019s cloud technologies, but its strategy around developing the business that interests him, explains Hobbs. The lesson from Amazon, he says, is \u201calways looking for ways to do something new or refine something; continually looking at what you are doing and trying to be better\u201d.It is an insight he applies to his own career. Hobbs started as an IT support engineer looking after kiosks for printing photos BCS was running for a client. He then became and IT engineer and then infrastructure manager. The CEO Patrick Teo assigned him to work with one of the managers, as part of his leadership training, and a year ago he became group IT director. Always look for ways to do something new or refine something. Brett Hobbs, BCS GroupToday, he says, he has dual roles: as manager for internal IT and consultant to the project side of an affiliate company. \u201cI make sure I take every opportunity to create as many opportunities as I can for driving innovation in the company and that I am not just here to show up Monday morning to make sure everyone\u2019s computer is working.\u201cI am really looking to make a difference to the company and make this company what our competitors look to.\u201dChecking future trends \u2013 for todayDavid Moss is a CIO for a technology company that is very much into checking out trends that could impact their respective enterprise and those of their customers.The CIO at Vodafone New Zealand says these include developing new products and services that Vodafone could offer to customers, simplifying operations or providing new capabilities for the group.\u201cWe are looking at what do we do to support those technologies,\u201d says Moss. These include wearable technology like Google Glass and new uses of camera technology. In California, for instance, cameras are being installed to be able to take a photo of vehicles running a red light.The photo of the number plate will be emailed to the owner within 30 seconds. Moss says in a few months, these technologies may be adopted in this part of the world.\u2018Preparedness, not prediction\u2019\u201cAligning the IT strategy to the business strategy is what every IT executive is aiming for in the first instance,\u201d says Deloitte CIO Tim Fleming. \u201cIt really comes down to understanding what the business strategy is, and making sure that what we are doing is not just IT for IT\u2019s sake but to help deliver the business strategies.\u201cOur business strategy is all about agility [and] flexibility and what my CEO calls \u2018preparedness, not prediction\u2019,\u201d says Fleming. \u201cIt is not about making the big long-term bets, it is about being positioned to move quickly and so we need an IT architecture that is quickly flexible, scalable and agile. It is about being positioned to move quickly and so we need an IT architecture that is quickly flexible, scalable and agile. Tim Fleming, Deloitte\u201cIn the IT world, change is an accelerated curriculum,\u201d says Fleming, and keeping up with trends is increasingly important for CIOs. \u201cThings are only moving faster and faster and so being able to understand the concepts and the mega trends helps you shape what you are doing now.\u201dFor instance, five years ago, Fleming spoke with his CEO when the first iPhones were becoming popular. \u201cI said, we have a choice here: We can either attempt to lock this down, guard the walls and continue to only let authorised devices get anywhere near our network. Or we need to start thinking about BYOD,\u201d says Fleming.\u201cHe very quickly came into the view that we need to educate our people on what is appropriate in terms of how we use the device, what we do with data, and we would be crazy not to ride that wave.\u201cAnd so from the start, we adopted a BYOD approach and we think it is important not the least for employee engagement,\u201d says Fleming. \u201cIf people have got much better technology at home and in their personal lives and then they come to work and they are heavily restricted, it becomes an engagement issue for us.\u201dTrusted peers and advisorsRhoda Phillippo, director of technology at Infratil Group, says when an organisation starts a transformation program, the most successful CIOs are the ones that team up strategically with the business unit owners of the change they are trying to make.It could be working with the CFO for a billing project, or with head of sales and marketing for an online digital program. \u201cThat partnership makes the CIO more effective other than just becoming the technology provider of a business plan.\u201dShe says another thing CIOs can do is to set aside a budget every year for \u201cplay money\u201d. This money, can be spent, for instance, on trialling smart marketing ideas. \u201cHave at least a couple of those running in a year and see how it works,\u201d says Phillippo.\nShadows on the landscape\n\nWith the rise of technology that can be bought as a service, a number of CIOs find they have to grapple with what is referred to as \u2018shadow\u2019 or \u2018rogue\u2019 IT.\nSo how do CIOs handle this?\n\u201cI have got a real policy, I really believe that you don\u2019t say \u2018no\u2019 to a business unit for doing something unless you have a solution,\u201d says Aaron O\u2019Brien, CIO of Les Mills International (LMI). \u201cI talk to my managers about this all the time.\u201d\nYou can\u2019t take somebody off something and make them less productive unless you have an alternative and better solution, he says. \u201cI really encourage people to be upfront, to be honest with what they are working on \u2013 skunkwork type of projects \u2013 because I am going to find out anyway.\n\u201cAnd I am not going to close it down. I am going talk to them about an alternative and better solution and how long it will take.\n I really believe that you don\u2019t say \u2018no\u2019 to a business unit for doing something unless you have a solution. Aaron O\u2019Brien, Les Mills International\n\u201cBy doing that, people are more open about what they are working on. If they are worried they are going to shut it down, they are going to do it in secret.\u201d\nHe says that approach is working well at LMI. \u201cIt does not mean it does not happen, especially as there are so many new cloud technologies all the time,\u201d says O\u2019Brien. \u201cWe always try to give them a better solution.\u201d\n\u201cIt really is a difficult and growing problem because it is so easy now to pull out their credit card and sign up\u201d for these services, says Robin Johansen, former CIO of Beca and now an independent consultant. Then, the users find out they need to integrate it with other systems like HR, or they need customer information.\n\u201cThe CIO has got to position himself or herself as the one who assists people to get the services they want,\u201d he says. \u201cToo often, CIOs unwittingly get themselves into a situation where they are seen as a blocker. CIOs traditionally have concerns about security, business continuity and DR.\n\u201cYou still got [those concerns] but you have got to be an enabler,\u201d says Johansen. \u201cThe important thing to stop shadow IT getting completely out of control is to be the person who helps people get things done.\n\u201cTo do that, you can\u2019t sit at your desk, you have got to be engaged out in the business, understanding what the business is trying to do,\u201d he says. \u201cYou don\u2019t stride into the office [of a business colleague] on your first meeting and say, \u2018Tell me about your IT issues\u2019,\u201d says Johansen. \u201cIt has to be, \u2018Tell me about your business, how things are going on for you, what is new and what is challenging for you.\u2019 In so doing, you are learning about the business but you are also uncovering opportunities to use technology to be the enabler.\u201d\nMore CIO appointments?Phillippo of Infratil says the CIO role is found in corporates, but when it came to small and medium enterprises they had IT directors instead. \u201cThey basically have somebody looking after their infrastructure.\u201cWhereas now, businesses are realising with this digital revolution it does mean if you do not have somebody focusing on technology in the same way that you have a specialist lawyer or specialist financial officer, then you are actually missing a huge business opportunity. The CIO role should be focusing on how to better service the business so it can become faster. Luis Carselle, ISACAShe cites the case at Wellington International Airport, a part of the Infratil Group, which created a CIO role. The head of IT, Gavin Ng, was involved in getting the right infrastructure in place, but the airport could do so much more with the information it has from parking systems, airlines and retailers, among others. \u201cThey need a much broader BI [business intelligence] strategy,\u201d says Phillippo. \u201cThey needed to be able to understand technologies that may help the airport compete more effectively.\n\u201cThat role could not have be buried under the CFO. It needed to be separate and given a voice at the table to optimise competitive opportunity.\u201dShe sees more organisations doing this, and these need not be corporates.For Luis Carselle, vice president of ISACA, there remains one key goal of the CIO across sectors. \u201cToday, not just in IT, the organisations have to move fast because of all the competition,\u201d he explains. \u201cIt is very hard to maintain competitive advantage, whether one is in financial or marketing. One day you invent something, the competition will catch up very fast.\u201dIn whatever industry, \u201cyou need to move fast and the technology should be an enabler of that\u201d, says Carselle. \u201cTo move fast, you need the foundation and the technology is one of those foundation. The CIO role should be focusing on how to better service the business so it can become faster.\u201dDivina Paredes (email@example.com) is editor of CIO New Zealand. Follow Divina Paredes on Twitter: @divinapFollow CIO New Zealand on Twitter:@cio_nzSign up for CIO newsletters for regular updates on CIO news, views and events.Join us on Facebook.