Michael Billimoria and Sam Johnston look ahead to predictions for the future role of the CIO and conclude that, with the right focus, they can both lead and enable the business.
The landscape of technology spending continues to change for the better. According to Telsyte’s Australian Digital Workplace Study 2015, 55% of technology budgets were traditionally spent on infrastructure and operations, 80% of which was simply ‘keeping the lights on’.
That left little for making improvements and less for ‘doing something new’.
Thankfully, times are changing. Today, there’s a relentless focus on continuous improvement – driving ITOs to realise efficiencies.
Half of technology budgets will be (or are now already) spent on transformation and innovation; greater visibility over service delivery is enabling efficiency gains and a reduction of the costs involved in ‘keeping the lights on’.
At the same time, a large proportion of the organisational technology spend is now outside of the CIO’s budget.
Telsyte also found that, in Australia last year, non-IT business units were spending significant parts of the ‘IT budget’– with management; operations; finance, marketing and sales; and HR/talent management being key technology spenders.
Further, Gartner’s soon-to-be-published annual CMO spend survey suggests that, “for 2016, CMOs allocated 3.24% of revenue to technology spending, which is very close indeed to the 3.4% of revenue CIOs earmark for IT."
This simply means that, going forward, CIOs will not be the biggest technology spenders in the business.
Two roads for CIOs to travel
Given the focus on digital transformation of business across both the commercial and government sectors, the CIO is standing at a junction.
1. Adopt and lead ‘digital'
This destination is forecast by Gartner CIO Futures: CIO Executive Relationships in 2030 Ansgar Schulte et al. (23 September 2016).
The Gartner Research says “Digital business will change the role of the CIO in most enterprises from the manager of the IT organisation into the second most important business strategist and operational leader after the CEO. ”
This new role will combine the responsibilities of the CTO, CDO, chief strategist, chief innovation officer and chief data officer – all essential elements of achieving effective digital transformation.
By taking on this role, the authors envisage that “the CIO of 2030 will oversee a large proportion of the enterprise's intellectual capital, which will comprise legions of algorithms, robots and smart machines, as well as digital talent employed in IT, operational technology (OT), R&D and innovation centres.”
2. Forget digital and focus on ‘core IT’
Another perspective from Gartner Maverick Research: CIOs Should Forget Digital Business and Concentrate on Core IT, Tomas Nielsen (7 October 2016) advocates an alternative destination.
This argument is based on the research, “While CIOs may see digital business as a unique opportunity for CIOs, history shows that business leaders have been equally adept at picking up the necessary technology skills to make strategic technology decisions.”
Meanwhile, the role of CIOs has been to scale and operate business solutions and amplify business decisions. In this scenario, “rather than lead digital business, CIOs will therefore yet again find themselves (and their organization) in the inevitable situation where the CIO will be handed one or more business-critical, yet technologically challenged digital business solutions, which they neither envisioned nor designed.”
Four elements for CIOs to focus on
If you were to ask a CIO where they wanted to get to, almost all would opt for the digital leadership destination.
However, regardless of CIO aspirations to be digital leaders, they are still ultimately charged with running day-to-day technology operations efficiently and effectively and there is no one else in the organisation equipped for that role.
To be fair, the scenarios above are extreme examples and, for most CIOs, the ultimate destination will be somewhere in the middle, but it’s a fine line to walk.
In order to achieve a combination of both roles, we believe CIOs must focus on four principle areas: Platforms, Delivery Revolution, Innovation & Optimisation, and developing a cogent Business Narrative.
Platforms are the core technological construct for running a digital business and give us the ability to manage workloads securely and seamlessly across clouds and legacy systems.
They must become cloud-based, available on demand and mine deep knowledge of business processes in a specific domain to create an enterprise-grade solution available ‘as a service’.
Platforms are the foundation for digital enablement. Yours must enable:
- Successful, rapid development and deployment of next-generation digital applications
- Flexible delivery that allows business owners to be in control of features
- The abstraction of compute, storage, network, management and provisioning, and external vendor services
Platforms must be set up for lasting business value and resilient to the changes affecting a digital business – which is only achievable when they are:
- Scalable, to leverage elasticity to scale up and down in order to manage demand and costs
- Flexible, with simple integration between applications and app changes rapid but safely managed
- Modular, so that applications can be deployed or extended through the quick addition of functionality to the platform
- Evergreen, meaning that the platform is continually managed and future-proofed for new business applications
In organisations burdened by ageing infrastructure, platforms are a big ask. They may mean creating a new, parallel reference architecture; however, unless you enable your organisation’s digital goals through an effective platform, digital transformation will be too onerous to achieve consistently.
2. Delivery Revolution
We’re currently witnessing a powerful combination for a delivery revolution through:
- Agile: smart and effective application delivery
- DevOps: to help the business win through a speed, improvement and business value focus
- Lean Change: to reinvent organisational change through an iterative, non-linear feedback-driven approach
Organisations that embrace and integrate all three elements will deliver in ways which will renew overall business confidence in technology departments.
Most believe that automation is the key focus area for effective delivery, but a delivery revolution also demands new ways of thinking and working – a topic well-covered in our four-part series on digital transformation.
The revolution doesn’t happen overnight… It requires an understanding of the excellent Agile Fluency™ Model (below) charted by Diana Larsen and James Shore in 2012.
While the revolution commonly begins in teams at a certain point, structural change is also required.
This in turn, demands an organisational culture shift.
3. Innovation & Optimisation
It’s getting harder to keep up because the speeds of development and improvement making existing products and services obsolete faster.
Most organisations are struggling to change their operating model to allow innovation and ‘start-up thinking’. The problem is, the longer an organisation waits to change, the greater the gap between the traditional business and innovative digital competitors and the velocity differential continues to widen.
Innovation is not easy, but embedding it within the organisation is key.
Changing to an innovation-based culture requires an entrepreneurial mindset – or thinking like a start-up – which traditional businesses find very difficult to do. In fact, most are in a poor position to ‘disrupt’ themselves – leaving them prey to new entrants successfully disrupting their markets.
Many attempts to innovate are sabotaged by skills and culture that don’t allow for change.
Some of the approaches we recommend include:
- A flexible innovation process which focusses not just on creating new solutions, but supports the learning journey that occurs with experimentation and ideation.
- Tuning your recruitment, talent management, skills and professional development to innovation
- Other tactics for cultural change such as gamification, improved collaboration techniques, and visualisation and transparency of work
There is no choice but to simply prepare for disruption. To survive and prosper, this entails becoming resilient to disruption within your own markets, or entering new ones.
4. Business Narrative
Perhaps the most important area of focus for CIOs aiming for the perfect destination is mastering the art of getting the right message across their organisation. This requires working closely with other business leaders to craft a ‘business narrative’.
It’s critically important to align with fellow leaders to develop a consistent technology story and keep it aligned up at that level.
Senior leaders may not always agree on the execution of digital transformation, but those battles can be managed.
In comparison, an inconsistent digital transformation story delivered to the business creates more silos and, ultimately, failure to deliver on the digital agenda.
Once you’ve settled on the right story together, it becomes a marketing exercise. All leaders must vocalise the message by being active advocates to their managers and the rest of the enterprise.
Use multiple forms of communication – videos, blogs, social media, etc – and consider how the story should be told to different groups: one-to-one meetings with leaders, executive or board presentations, town halls with operational staff and the sales teams.
Above all, make the business narrative simple, but not simplistic. It must be clear, relevant, business-focussed and backed up by facts or it will fail to hit the mark.
So where to from here?
We don’t believe that Australian CIOs must make a decision between an ‘everything digital’ or ‘strictly keeping the lights on’ role.
The road to the future is more about understanding what you’ve got then bringing the different ‘silos’ in your enterprise together in a collaborative way.
By working on strengthening close collaboration with the business – as well as a strong focus on how technology departments can adapt to the ‘digital imperative’ – you can position yourself for a role as both a digital leader and a technology enabler.
This article is based on the presentation “CSC: What’s Next for the Australian CIO?” by Michael Billimoria, Sam Johnston at the Gartner Symposium/ITxpo 2016 25 October 2016
- Digital Transformation: Driving Innovation, Creating Adaptability and Developing Resilience
- Lean IT: New focus on old ways
- Accelerating Digital Transformation through implementing a DevOps Capability
- Lean Change: A unique approach to managing change at speed
About the Authors
Michael Billimoria is CSC Consulting’s Chief Technology Officer and an industry thought leader with a proven track record of successfully delivering programmes that have realised tangible business benefits in complex environments. He has a strong people and business process focus which has allowed him to influence and then lead change in highly political environments across large numbers of cross-functional teams. Michael’s relentless focus on next-generation technology services and how they will affect organisations, people and the world at large allow him to successfully advise clients on how to remain competitive in today’s rapidly changing world.
Sam Johnston is responsible for driving the development of Next-Gen technology solutions to benefit clients' digital transformations as Regional Chief Technology Officer for CSC. He is focused on securing and growing CSC's largest and most strategic accounts and actively contributes to the product road map, innovation and prototyping of next generation technologies. He is also a subject matter expert and thought leader, regularly representing the company at international events.