Every CIO position description contains some semblance of the same 12 role requirements. This list, which you all know and love, defines what CEOs currently want in their CIOs. But to my mind, the list does not represent what CEOs actually need from their CIOs.
In today’s data economy, in which software and analytics have emerged as the key drivers of business, CEOs must rethink the silos and hierarchies that fueled the businesses of the past. They can no longer have “technology people” who work independently from “data people” who work independently from “sales” people or from “finance.” Instead, they must helm organizations in which every employee embraces data and technology as integral to what they do.
And they need CIOs to help get them there. Because of this, redesigning the enterprise for the data economy is the chief remit CEOs have for today’s leading-edge CIOs.
Here’s what that takes:
From software and the business to software is the business
When Cargill started putting IoT sensors into shrimp ponds, then CIO Justin Kershaw realized that the $130 billion agricultural business was becoming a digital business. To help determine where IT should stop and IoT product engineering should start, Kershaw did not call CIOs of other food and agricultural businesses to compare notes. He called the CIOs of SAP and Microsoft and other software companies. He was reimagining the world’s largest agricultural business as a software company.
If moving software from a supporting to a starring role is the what, then modern delivery is the how. Modern delivery is product (rather than project) management, agile development, small cross-functional teams that co-create, and continuous integration and delivery all with a new financial model that funds “value” not “projects.”
But don’t attempt to create a modern software development lifecycle (SDLC) on an industrial era infrastructure. The target architecture of the data economy is platform-based, cloud-enabled, uses APIs to connect to an external ecosystem, and breaks down monolithic applications into microservices. Wafaa Mamilli, chief information and digital officer of global animal health business Zoetis describes it well: “A platform model is more than architecture. It is a mindset that lets us zoom in to think vertically about how we deliver to the farmer, vet, and pet owner, and then zoom out to think horizontally about how to make the solutions reusable, scalable, and secure. Platforms are modular, intelligent, and run algorithms that allow us to change very quickly. If we didn’t move to a platform approach, we would still be funding these huge programs.”
The democratization of IT
If you give someone a fish, they eat for a day. If you teach them to fish, they eat for a lifetime. CIOs who deliver IT unto their hungry consumers are handing out fish. CIOs who use low-code/no-code platforms and new governance models to create self-service data capabilities are turning shadow IT into citizen developers who can fish for their own data. The hub-and-spoke model, with software and data engineering in IT, and super-user machine learning (ML) experts in the businesses, is emerging as the dominant model here.
I often hear CIOs say that they do not believe the cost benefits of a cloud-based infrastructure are worthwhile, but they are missing the point. The cloud is about more than managing costs. It is also about adopting a new development environment that contains pre-fab services that are available to your agile teams.
According to Penelope Prett, CIO of Accenture, the future of technology is all about the cloud. Her advice: “Don’t talk to your business sponsors about the cloud as you do with an ERP implementation. The cloud is an enabler for all that will come. If your business partners understand that cloud is the cornerstone of what will happen in technology for the next decade, not a business proposal with an ROI in 10 minutes, then you can really start to make things happen.”
During the early days of the pandemic, I did a listening tour of Fortune 500 CIOs, and I asked them, “What capabilities do you wish you had in place before the pandemic?” The majority said, “analytics.” For example, the CIO of an alcohol distributor saw the company’s catering channel plummet while retail sales spiked. With better analytics, they could have pivoted their distribution channels more quickly.
The challenge for CIOs who want to improve their company’s analytics capabilities is a familiar one: data integrity versus innovation. “In IT, we have traditionally focused on protecting the single source of truth, but our business functions want to experiment with the data,” says Deepak Kaul, CIO of Zebra Technologies. “To solve this, we’ve kept data engineering in IT, but embedded machine learning experts in the business functions. Core customer data stays pristine in the data warehouse, but the business functions can experiment in a cloud-based enterprise data lake. This model allows us to pivot from a data-defensive to a data-offensive position.”
Digitization is about automating your current business, and it requires tremendous leadership, especially in business process standardization. But digital transformation, when you leverage software to change your business model, requires a whole new level of transformational leadership.
Vipin Gupta, chief digital officer at Toyota Financial Services, was a part of the leadership team to move the company from captive finance to providing a financing platform for other automotive businesses. This digital transformation required a complete overhaul not only in technology, but also in sales, operations, finance, and customer service. While leading cross-functionally across the enterprise, Gupta also led the creation of a new architecture, stood up a digital factory delivery model, and pulled the company’s top decision makers into leadership action teams, whose sole responsibility was to remove impediments to the factories.
“The role of the CIO going forward is to be the architect of the future version of the business,” says Gupta. “CIOs have a holistic enterprise vantage point to influence the design of not only the platform, but also the organizational, business, and process models. Good CIOs transform IT from inside, but great CIOs use design thinking and inclusivity to transform IT by changing what happens outside of IT.”
Transformation in the data economy requires leadership at every level: business model, organizational design, culture, IT delivery model, and architecture. CIOs must get out of the role of “delivering IT to the business” and into the role of redesigning their businesses so that we are all part technologist, data scientist, and business leader. That is what today’s CEOs need from their CIOs.