Technology Helping Change CEO’s Playbook

CEOs wake up every morning fully aware the corporate playbook is being rewritten and that companies are changing almost beyond recognition. As a result, they’re choosing their priorities carefully, knowing the next few years will upend business models, blur lines between industries and companies and demand a new way of thinking. 

A KPMG CEO Outlook survey found that two-thirds of U.S. chief executive officers said they believe the next three years will be more critical for their industries than the last 50. The biggest reason? The increasingly fast pace of technological change, notes Denis Berry, KPMG’s U.S. CIO Advisory practice leader. In fact, the survey also found that CEOs believe technological change will be one of the biggest factors impacting growth over the next three years, second only to economic ones.

And with top-line growth always top of mind for the CEO, getting a grip on technological change — no easy task as new ideas quickly iterate and gain traction — is a must.  To survive in this disruptive era and support the CEO’s efforts, the CIO must emerge as a transformational business leader, technology strategist and business model innovator. As the 2016 Harvey Nash/KPMG CIO Survey revealed, with 35 percent of respondents reporting an enterprise-wide digital vision and strategy and 24% reporting a defined digital strategy within business units, organizations are expecting digital strategy leadership from the CIO (more than half already sit on the executive board or leadership committee).

This “Creative CIO” may use his or her own IT teams and services to “test-drive” innovation and execution when it comes to digital strategy, whether by embedding cognitive platforms into their IT service management processes or developing cloud use cases that can be brought to the board and executive team.

Shifting CEO Conversation: Tech-Savvy, Change-Ready

This generation of CEOs is notably different from 10 years ago – and more tech-savvy than their predecessors, notes Steve Chase, KPMG partner and U.S. Management Consulting leader. As the pace of technology change has picked up, CEOs are seeing new business opportunities but are under pressure to provide a better customer experience based on a new set of technologies ranging from data analytics and IoT to cloud computing and robotic process automation. “I have seen this conversation shift, moving from the CIO being the one to worry about technology to the CEO and everyone around the CEO’s table worrying about it,” he explains.

At the same time, consumers are more demanding and have higher expectations for technology to be part of their lives, adds Berry: “If the CEO isn’t thinking about how to leverage these disruptors to help drive top-line growth in their business and products, they are going to be left behind.”

Implicit in any discussion about driving growth through technological change is the idea that if organizations don’t get it right, they’ll lose out to a growing set of quick-moving market entrants, cautions Chase. “CEOs can’t afford to wait out these technology cycles and be a fast-follower,” he says. “They have to be out in front, or a new competitor will capture the next connected product opportunity.”

One example, he explains, is a recent conversation with a C-level executive for a healthcare payer: “Every part of that discussion was about things the company could do to enable more seamless customer transactions and ensure a better experience — and, drive a better business outcome,” he says. “I’m not sure a healthcare payer would have had that conversation 10, or even five, years ago.”

Companies need to get technological change right on the back end as well, so CEOs must think about how to optimize their business more effectively using disruptive technologies, Berry says. For example, digital labor can start in the back office and move out to the business, while cloud computing can be used to add more predictability around resources: “The CIO and CEO must partner on this to implement the correct solutions,” he says. 

CEO’s Challenge is the CIO’s Opportunity

Today, company boards are asking the CEO questions they’ve never asked before, such as: What happens if an Uber-like entrant comes into your market? What is being done with cloud computing? How does social affect product growth? “It’s a big shift, making the CEO more active in meeting new challenges,” Berry says.

As the CEO comes to terms with the speed of change (KPMG’s CEO Outlook also found that two-thirds of CEOs are concerned that their organizations are not disrupting business models), the CIO can expect to become a real player at the leadership table, he adds. This can be a real opportunity: According to the 2016 Harvey Nash/KPMG CIO Survey, 67 percent of CIOs expect their strategic influence to grow in 2017, while more than one-third already report to the CEO. This is the largest proportion in the survey’s history.

The CIO also can help the organization digitize processes that leverage value from emerging technologies such as intelligent automation and robotics. “This is both an opportunity and a tough challenge, since the IT organization won’t get a lot of additional budget or extra relief from the usual responsibilities related to making sure the lights stay on,” says Berry.

“Now the CIO has to act differently as a true business partner in enabling change,” he adds. “But that’s where the true opportunity lies.”