CIO role crucial to business transformation

Still perceived as `watchdogs,’ CIOs urged to build up ties with C-suite peers

By Ernst & Young

For many years, chief information officers (CIOs) have been talking about becoming a true partner to the business and the executive management team. But, as the latest Ernst & Young report highlights, relatively few have broken out of their comfort zones to actually become one.

The encouraging news is that many CIOs find the remit and responsibilities of their role hugely rewarding and enjoyable. Nevertheless, many more will need to test the limits of their comfort zones in order to become a relevant partner to the business in the years ahead.

Ernst & Young, a leading global professional services firm, recently conducted a survey of over 300 senior IT professionals globally, along with a further 25 CIOs and 40 respondents from across the rest of the C-suite executives, to capture business views about the evolving CIO role today.

According to ``The DNA of the CIO,’’ published as a result of the survey, CIOs see significant potential to add value to the business and are strongly motivated to make a difference.

Many are keen to change the often weak or limited perception of IT within the business for the better. They want to move away from being seen as a mere support function and toward a stronger role as an innovative and transformative part of the business.

At a high level, underlying technological shifts, such as the move to the cloud and the ongoing consumerization of IT, provide a compelling opportunity to reshape the image of IT and the role of the CIO.

And there is no doubting their willingness and motivation to work hard on this: nearly nine out of 10 CIOs surveyed for this report see this as a key reason why they have got to where they are today.

Sixty-four percent of the CIOs interviewed enjoy the scope and remit of their role. IT’s influence today stretches into nearly every facet of the business, from HR and finance right through to the supply chain and product development.

Nevertheless, for many, there is still much more opportunity to show influence. All CIOs are engaged in the execution aspects of the role, such as dealing with cost management and keeping the lights on _ and many are involved in enablement _ from proactively generating ideas through to acting as an information broker.

However, the third facet of the role, or development, is least often pursued by CIOs. From delivering transformation through to introducing business model innovation, this can be the most rewarding part of the job but is only open to those who truly consider the rest of the C-suite as equal peers.

CIOs clearly enjoy the depth of responsibilities of their role, making this a desirable career choice for most. About two-thirds are content to see their role as a final career destination. Many derive huge personal and professional satisfaction from the wide-ranging projects and initiatives with which they are involved.

And while the others are not dissatisfied, they harbor ambitions for other executive roles within the business. One in ten, for example, has an eye on the top CEO job. And among the majorities that are happy as a CIO, about half remain ambitious, hoping for a true invitation to the top table.

But far too many lack a career development strategy that can support these aspirations. About one in three of those polled for this study indicated that they were strongly in need of advice on how best to develop their career.

This is especially true for those with a largely technology-oriented background. For CIOs, whether aspirational or not, the underlying shifts in the technology sector will demand that they start to develop their career more systematically.

``The clear message from many CIOs, is that the status quo will need to change,’’ Ernst & Young’s Global CIO Maureen Osborne comments. ``In order to stay relevant in a rapidly evolving technological landscape, CIOs will need to break out of their comfort zones within the data center. Those who don’t, will run the risk of being further relegated down the corporate hierarchy, or sidelined altogether.’’

Not yet at top table

Too few CIOs are currently regarded as true members of the executive management team. This limits their potential for change.

Many CIOs nowadays appear to be C-level in title only, and this rank is not necessarily reflected in how they are perceived in the leadership team. Less than one in five hold a seat at the top table, for example. And less than half say they are deeply involved in strategic decision-making.

Related to this is a perception that CIOs have a higher regard for the value that they bring to the business than that seen by their C-suite peers. For example, while 60 percent of CIOs strongly believe that they help enable fact-based decision-making in relation to corporate strategy, just 35 percent of their C-suite peers agree.

But if CIOs are truly going to deliver on the potential remit of their role, and the potential of IT, they will need to work harder to finally secure their position at the top table.

Nearly four in 10 CIOs cite overcoming a lack of support from the executive management team as one of the biggest barriers they face. In a worrying number of businesses, the perception of IT still appears to be shaped by its role as ``helpdesk.’’

Indeed, what is clear throughout this study is that the views of the rest of the leadership team often remain stuck in the past, when IT was simply a back-office function that operated the basement data center.

Most leaders aim to keep any discussions with the CIO centered on IT budgets, with few seeing this as a chance to engage in a wider discussion about the value of technology.

Far fewer also see the need for leadership from the CIO as part of a wider sense that the C-suite prefers a CIO who is simply stable, consistent and doesn’t rock the boat much.

CIOs acknowledge that it will be difficult to change such perceptions, but doing so will be a prerequisite for recasting the role of the CIO, and IT, within the business.

Although CIOs have acknowledged for well over a decade the need to develop their softer skills, not enough progress is being made.

When asked to identify skills that are crucial for their role, 81 percent of CIOs cited leadership and 79 percent named communication and influencing skills. Both scores were well ahead of IT know-how.

But despite this recognition, it is also clear that too many CIOs don’t know what it takes to join the executive management team.

One of the most important changes is still often forgotten: the need to discuss technology issues in terms of the business value they bring _ whether costs saved, revenues gained, customer satisfaction achieved or similar _ rather than in terms of uptime, gigahertz and terabytes.

Too few CIOs bring strong financial literacy to their role. For instance, they need to understand how IT spend affects the net present value of the business, and consider costs in balance sheet terms versus profit and loss terms. For too long, CIOs have resisted efforts to improve these skills. But they must take action.

C-suite ties crucial to success

A more senior role is inevitably more political in nature, making the need to win friends and influence people far more important. The transition to the modern CIO role requires many incumbents to put a far greater emphasis on relationship building and fostering better links with a wider range of stakeholders both within and outside the business.

There is wide agreement that developing these skills is the number one thing that CIOs can do to bolster their chances of promotion, with nearly three-quarters considering it highly important. Nevertheless, few appear to relish the task.

When asked about key priorities for the years ahead, internal politics ranks low for most respondents. More copies of Dale Carnegie’s classic work on winning friends and influencing people will doubtless be needed as CIOs work to secure the relationships they need.

Ernst & Young Global IT Advisory Leader Dave Ryerkerk concludes that future CIOs will need to be able to show proactively how IT can be used as a source of innovation within the business, rather than merely a support function.

``Naturally, a part of this will be securing the chance to support a major business project of some kind, which can, in turn, make a specific impact on how the rest of the business operates,’’ he says. ``The value of this is clear: once business leaders start to recognize an IT leader as someone who can transform the way they operate their business, perceptions can quickly start to shift. This will be especially clear if the resultant changes in the business operating model impacts top line revenue growth.’’

Compared with many other C-suite roles, CIOs have wide-ranging opportunities to influence and effect change across the business. But few have taken action as yet. This will need to change, not least given the underlying shifts in the dynamics of the technology industry.

Ernst & Young’s report, The DNA of the CIO, provides CIOs with a robust and balanced toolkit on what to change, who to influence and how to do it. But it will be up to CIOs themselves to find the courage to reinvent themselves.

This article was contributed by Ernst & Young, a leading global professional services firm.