In brief

In brief

  • CIOs have demonstrated their ability to connect the business and technology strategy. Now, they’re in a position to drive innovation.
  • After getting their financial house in order, CIOs should focus on the rest of the business while advocating the value proposition of emerging tech.
  • Then, CIOs should evolve their function operating model to be product, services and experience-based, to help enable agility and flexibility.
  • An economic surge will likely follow the vaccine rollout, and CIOs have an important role to play in new growth opportunities.


Quarterly CIO Outlook

It’s a new day for chief information officers (CIOs). In the past, the CIO was primarily the head of corporate IT and manager of back-office technologies. Today, that role is steadily evolving as we prepare to enter a post-pandemic world.

Technology is not only shaping business strategy but accelerating our recovery from the COVID-19 pandemic. Given CIOs’ proximity to the technology stack, they are in a unique position to lead their organization—and society—through disruptions and toward new, innovative avenues of sustainable growth.

In a world of technologists, much of the C-suite has become well-versed in the tools and technologies within the marketplace. What sets the CIO apart is the ability to combine technology prowess with a keen understanding of business strategy.

At the start of the pandemic, CIOs were the first to respond by rapidly adopting technologies like cloud, analytics, artificial intelligence (AI) and security. By partnering with other business leaders to maintain operations and transition to a remote working environment, CIOs gained experience and insight that no one else in the C-suite has.

Now, CIOs are being seen as agents for change in their organizations. At times, their role may look more like that of a CTO or chief digital officer (CDO). In the future, these positions are likely to converge as technology becomes so ubiquitous in society that the responsibilities of these three roles fall under the same purview.

CIOs need to help drive innovation. And if they want to demonstrate their value, they’ll have to meet the prerequisites: namely, an IT shop that’s in good financial order and an optimized operating model.

Turn credibility into inspiration

A CIO’s first priority should be looking inward to make sure they’ve optimized their own IT departments. Take technology spend, for instance. By bringing their run cost down, CIOs can free up more funds to invest in new, exciting capabilities that will help transform IT, and ultimately, the business.

Once they’ve gotten their house in order, CIOs will have the time and energy to assist the rest of the business by providing guidance around technology and business strategy. CIOs with a solid grasp on emerging technologies will be able to articulate and advocate their value proposition to the business.

CIOs should be mindful, though, to take incremental steps so they can demonstrate early proof points. Innovation must be scalable. That’s why they should look to one or two areas of the business, such as finance or marketing, as a starting place for collaboration. These small steps will ladder up to creating a larger, innovative culture where the CIO and technology are key drivers of agility across the enterprise.

Leading organizations that innovate at scale show 2.2x higher revenue and 1.8x better operating margins than organizations lagging behind.

Source: Accenture, Pivot to Value with Living Systems, September, 2020.

Evolve the operating model

If CIOs want to adapt to an evolving business landscape and meet liquid customer expectations, they’ll need to swap out their traditional, function-oriented IT operating model for one that is products, services or experience-oriented.

Think of it like a kitchen renovation: With a function-oriented operating model, you’d have to call around town for an architect, a tiler and an electrician just to install the oven. With a product, service or experience-oriented operating model, all of those different tradespeople work as one team, communicating and integrating among themselves. This allows them to make quicker decisions with greater flexibility.

39%

of CIOs said that their IT organization has capacity for delivering IT and digital business innovations on target and the ability to rapidly to accommodate real-time market changes.

31%

of CIOs are already working toward harnessing disruptive technologies for developing new revenue channels.

Source: Accenture, CxO Pulse Survey, June/July 2020.

CIOs can lead the transformation of their organizations by aligning the operating and business models for flexibility and efficiency. It won’t be easy, though. Organizations often fail to pivot quickly toward changing customer needs, markets and technologies. These trends have only accelerated during the COVID-19 pandemic.

Most leaders acknowledge that the business, IT and operations must work together in very different ways to support this new operating model. That’s why CIOs must examine every component of their operating models and adjust as needed to enable greater speed, agility, innovation and iterative methods. In doing so, they’ll not only transcend organizational boundaries, metrics and rewards but earn the credibility to guide the organization toward growth.

Prepare for the post-pandemic world

We’ve seen how technologies have helped expedite the development and deployment of a coronavirus vaccine. As businesses become more engrained in our daily lives, CIOs will provide even greater value to their companies by coming up with creative new ways to generate business and provide value beyond merely procuring and implementing technology.

Looking ahead, more vaccines will be distributed globally, which means economies will likely experience a surge as lockdown and distancing restrictions are loosened. Companies will want to ensure that they’re providing relevant, exceptional experiences for customers as consumers not only return to former buying habits, but also new ones developed during the pandemic. Technology will be the great enabler here, so it’s imperative that CIOs step up and prepare their organizations to take advantage of the economic upturn.

The evolution of the CIO is underway and shows no sign of slowing down. Looking forward, businesses will continue to lean on the CIO as an enabler of strategy.

If we’ve learned anything from the past year, it’s that the future is in flux. However, as we adjust to this new normal, one thing has become a certainty: CIOs will play a pivotal role in their companies, their ecosystems and society in general, in the years to come.

Five steps to take today

Now is a good time for CIOs to conduct a financial health check on their technology budget. Identify opportunities to reduce run costs and free up funds to invest in transformation and new technology capabilities. Collaborate with the CFO to clearly measure and articulate the business value that technology is driving and showcase it for the entire C-suite.

Transform your IT operating model to be product/service/experience-oriented. Design and align the new operating model with the company’s business model. By implementing agile delivery methods across functions, CIOs can promote enterprise agility. That said, agility isn’t enough—CIOs should reassess processes, procedures and corporate policies that might be blocking or hindering collaboration and speed.

Choose one or two business or functional areas where you can double down on innovation ideas. Start by identifying which functions or business leads will be best to collaborate with, be it the CFO and finance function or another area. CIOs should pilot these initiatives and start to collect success stories and allies early on so that they can clearly demonstrate the value proposition that they and their teams bring to the organization.

Promote technology across your enterprise to help transform your company culture. CIOs should use their understanding of the business and technology landscape to target areas of the business that are ripe for transformation. Offer to pilot digital capabilities in areas experiencing rapid growth or that are perhaps under pressure to perform and/or react to changing market conditions.

Be the champion of digital fluency across your company. CIOs have an opportunity to work with training and HR teams to drive a digital fluency agenda across the enterprise. Upskill and reskill employees in both IT and business functions on how to use automation, AI, digital tools and operating principles like DevOps and Agile.



Diana Bersohn

Managing Director – Technology Strategy & Advisory


Neil D’Souza

Managing Director – Technology Strategy & Advisory

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