What’s next? 2016 priorities for high-performing CIOs

In the new year, many CIOs may find themselves at a critical juncture. They can either build themselves into successful business leaders or they can risk being relegated to second tier “care and maintenance” roles in which they will provide technology support for the strategies and goals of others.

Based upon hundreds of conversations we’ve had with CIOs over the past 12 months, it is clear which path high-performing IT leaders will take in 2016. We predict CIOs will take the following steps, among others, to distinguish themselves as strategists and decision makers as they proceed down the leadership path:

Priority 1: CIOs will aggressively re-skill the IT workforce.

In Deloitte’s annual Global CIO Survey 35 percent of CIOs identified “developing and grooming leaders in IT” as their top priority for 2016. As competition for talent heats up in the coming year, CIOs will likely take the following steps to hire, retain, and evolve the skill-sets of their extended teams:

• Add or grow capabilities: To fuel experimentation in new fields, IT organizations are increasingly seeking talent skilled in emerging technologies like machine learning, digital software engineering, and DevOps. At the same time, they are looking for expertise in disciplines like creative design, user experience (UX), and behavioral psychology. Why? These fields can broaden IT’s portfolio of skills from STEM (science, technology, engineering, mathematics) to STEAM—the “A” representing a fine arts focus required to invent new ways of working, new experiences for employees and customer engagement, and for brining to life new ideas for products, solutions, services, and offerings.

• Reevaluate staffing and operating models: Lately, we see CIOs taking new approaches to sourcing talent and gaining access to critical skill sets. These may include tapping into crowdsourcing platforms, pushing existing vendor and services partners to help augment capabilities, and exploring new ecosystems (e.g. start-ups, venture capital firms, academia, other research bodies) to access ideas, solutions, and people.

• Institutionalize a “right-speed IT” model: CIO and other IT leaders are developing and enhancing their agile, iterative, development techniques and delivery models while balancing the need for transactional back-end systems requiring rigorous development, testing and governance mechanisms to ensure resilience, scalability and security. This requires developing capability, governance and staffing models to drive both agendas simultaneously.

Priority 2: CIOs will focus on the business value of their technology investments.

Running efficient, reliable, scalable and secure IT environments is a table-stakes expectation of CIOs. Some will focus on optimizing business processes and driving process efficiencies, but that will not be enough. To distinguish themselves as true business leaders, CIOs will need to impact the top lines of business significantly—a requirement with which many are increasingly familiar. Of the CIOs we surveyed, 44 percent identified growth as a top business priority for 2016. With this in mind, CIOs will need to understand thoroughly the business value and competitive advantage technology can bring to their organizations. This need is so urgent that if CIOs step up to the plate in 2016, other business leaders likely will.

Consider the following actions CIOs can use to reposition IT as a driver of business value:

• Invest in new business models and revenue opportunities: In the coming year, CIOs should consider investing in R&D, prototyping, innovation and emerging technologies. In doing so they will not just be industrializing an approach to innovation. Rather, they are evolving budgeting, prioritization, and program/project management to accommodate investments without precise and/or immediate ROI.

• Get to know the customer: Most customers expect consistent and predictive digital experiences. Creating these experiences requires complex, multifunction effort in which CIOs are key stakeholders. In the coming year, CIOs should become better acquainted with and actively engage end customers in order to create end user experiences—emphasizing usability, simplicity and utility—across all solutions.

• Play a larger role in driving strategy and investment: Increasingly,CIOs are being asked to lead technology-enabled business transformation opportunities within their organizations and many are stepping up to the challenge. In our global survey, 36 percent of CIOs said that supporting and driving business strategy is their primary job.

Priority 3: CIOs will be uncompromising in their legacy and core modernization investments.

Business leaders typically recognize the value derived from investments made in proven technologies like analytics and digital. Unfortunately, they often overlook the value long-term investments in core infrastructure and applications continue to deliver. Roughly 53 percent of CIOs we surveyed said their legacy and core investments will not have significant impacts on their businesses going forward—a belief that is misguided. Due to deep dependencies on existing front-, mid-, and back-office services and associated data, legacy infrastructure and applications will be foundational in efforts to drive innovation and growth for the business. For this reason, savvy CIOs will consider taking the following steps to recast and revitalize core assets:

• Take advantage of new vendor offerings: Enterprise software vendors are investing heavily in new capabilities and functionality that could benefit companies with strategic investments in large-scale ERP. Treating any upgrade/migration as merely a technical exercise in moving existing processes and workflows from the old stack to the new undermines the real potential value of enterprise technology investments.

• Use ERP upgrades as opportunities to reimagine business processes: During ERP and custom applications upgrades, look not only for opportunities to leverage new capabilities to enhance underlying platforms, but also to drive the convergence of digital, analytics, cloud and cyber. How might new functions and approaches enhance employee, customer and partner journeys?

• Champion infrastructure and data center modernization efforts: Initiatives in these two areas can help subsidize broader core modernization and IT delivery model transformation. By embracing 1) autonomic platforms (a combination of “software-defined everything,” virtualization, and automated management/provisioning throughout the stack), 2) DevOps for automating and integrating the software development lifecycle, and 3) strategic adoption of cloud services, CIOs can likely get dramatically more value from their IT investments.

Khalid Kark is a director with Deloitte LLP where he leads the development of research and insights for the CIO Program.