The adoption of emerging technology is heavily affecting consumer behavior, blurring the demarcation lines of industry sectors, creating new market niches and allowing new entrants to enter the stage disruptively. Across a number of sectors, digital technology is lowering the barriers to entry. We see it time and again. what used to be a clearly defined local or regional market dominated by a small number of sellers suddenly turns into a global arena experiencing stiff competition as former oligopolies evolve into polypolies at lightning speed.
In a fast-moving world underpinned by the proliferation of cloud computing, broadband and mobile technologies and the exploitation and monetization of data, organizations must constantly adapt to stay ahead of the game. Corporate leaders are aware of these radical changes, as emphasized by PwC’s 20th annual CEO survey, which highlighted the breakneck pace of technological advance and changing consumer behavior as the two greatest concerns for the C-suite.
IT on the board agenda
“The board of directors, as overseers of company strategy, play an important role in their company’s digital transformation. Yet, the focus on digital skills for board members is a somewhat new idea,” says Mike Quindazzi (@MikeQuindazzi), Managing Director at PwC.
He goes on. “Just a few years ago, many boards lacked technology expertise in the boardroom, while last year 42 percent of directors ranked IT strategy expertise as a very important attribute for the board, according to our findings. As management further consider levering digital and emerging technologies as a competitive advantage, they should also look at their boardroom. Is the board ready for technologies companies who are investing in are blurring industry lines, creating new business models and competitors?”
Forward-thinking business leaders understand that digitizing their organization is a requirement, not an option. They constantly push further to ensure swift progression on the learning curve. “Leading boards are considering deeper dives, outside of board meetings, to stay up to speed on emerging technologies, in addition to keeping up with continuing education. They are making sure digital is part of the overall strategy discussion, not just transformation but also keeping a keen perspective on the competitive and potential mergers or acquisitions. By being involved and understanding what is really needed to undergo digital transformation, boards can ensure that leadership is executing on its plan and steering the company toward a successful digital future,” Quindazzi emphasizes.
The CIO’s evolving role
As outlined in PwC’s Changing role of the CIO report, in response to shifts in the business landscape and changing business requirements, the role of the CIO is going to be reinvigorated and extended across a number of dimensions. Here are eight examples:
1. From support function to core function
As the dependency on technology increases, the CIO function will be further elevated and mandated with the overall supervision of the company, and will report directly to the CEO. The role will be less focused on operational tasks and more focused upon guiding the board on how to leverage IT strategically.
2. Emphasis on value creation and growth
The focus will change from bottom line to top line, with more emphasis on outward-focused activities that create business value and help streamline IT operations—for example, by leveraging strategic sourcing partnerships around cloud computing.
3. Embracing agility
To keep up with the rate of adoption and meet increasing customer demands, CIOs need to implement and champion agile methodologies such as DevOps, continuous integration/continuous delivery (CI/CD), and simplified governance.
4. Expansion of the CIO role
As they grow in importance and relevance to the business, other technology-related functions will be put under the CIO’s responsibility, including Chief Digital Officer, Chief Technology Officer, Head of Security and Chief Data Officer.
5. Becoming data-driven
Creating and exploiting data can be a real game-changer in terms of leapfrogging the competition. Savvy CIOs will spearhead the data movement by providing vision, submitting opportunities and turning data into actionable insights.
6. Growth engine and change agent
Instead of responding to changing requirements, CIOs are expected to proactively spot opportunities for growth, efficiency and differentiation using their knowledge of the available and emerging technologies.
7. Championing diversity
While findings from PwC suggest that, overall, a mere 6 percent of CIO posts are held by woman, Fortune 500 companies score a little higher, with 15 percent employing a female IT leader. This number is poised to rise as organizations embrace diversity, equality and inclusivity.
8. Moving beyond tech
More than ever, mastering soft skills—including the ability to inspire, lead, communicate and build effective relationships—is growing in importance. Attracting and retaining talent, nurturing a millennial workforce, and embracing new ways of working are additional requirements.
The key to success in the digital era will be the ability to meet changing customer requirements and strategically leverage technology to support new business models and manifest sustainable competitive advantage.
With IT moving straight into the epicenter, the implications for the CIO are manifold. Along with the digital pursuit, the CIO will become a fundamental part of the corporate leadership and tasked with enabling and facilitating the transformation. This will entail providing vision, guidance and strategic leadership around how to apply technology in a smart fashion to compete and win in the marketplace.
While the CIO won’t be relieved from contributing cost savings through standardization and automation anytime soon, it’s evident that this is not necessarily the way to wring the most business value out of IT. Astute CIOs understand the need to move toward enabling top-line growth, which can yield even greater economic outcomes for their company.
This is, however, not a mutually exclusive tradeoff, but a complementary task that will only grow in importance going forward. Embodying good corporate citizenship, serving as a role model, being inclusive and embracing intense collaboration will be essential for CIOs to master the challenge at hand.