From IT Cost Manager To Business-Savvy CIO

The role of the CIO continues to change as enterprises and technologies continue to evolve. And the pace of change clearly is accelerating.

Today's businesses are dealing with major shifts within the global economy as well as in the role of government, including increased regulation and the need for unprecedented levels of transparency. CEOs are demanding new business models to deal with increased global competition and are focused on establishing and growing collaborative relationships with business partners. And with the coming of age of social media, forward-looking enterprises also are heavily focused on delivering solutions that enhance customer relationships and create customer value.

These business trends are based on continued advances in information technology. The widespread availability of broadband Internet and mobile devices has had a profound effect on both our business and personal lives. And the consumerization of IT has forced many enterprises to rethink the definition of technology in the workplace.

As recently as a few years ago, most enterprises would have looked at social media as a plaything; now Fortune 1000 CEOs routinely appear in YouTube videos, and their companies maintain multiple Facebook pages. The explosion in data generation, unstructured data and the use of real-time analytics is changing the way enterprises deal with customers and business partners. And cloud technologies are making enterprise applications and data available to small and mid-size companies that otherwise could not afford to build or support them.

The CIO Opportunity

With all of these advances in IT, the role of the CIO has been marginalized; some experts even contend that the role will soon disappear. Based on research with a community of more than 2,500 global CIOs, the Center for CIO Leadership believes that these experts are partially correct. The traditional role of the CIO as "manager of the IT cost center" -- that is, tactically focused upon keeping the lights on and reducing cost -- is being marginalized.

But many higher-performing enterprises and the CIOs that help lead them have realized that, because so much of the business agenda is either IT-driven or requires IT as a key enabler, the opportunities for CIOs to advance their role and increase their contributions by leveraging IT to create sustainable business value are bigger than ever before. CIOs have a choice: They can continue to focus on managing data centers, infrastructure and eliminating cost (and likely be marginalized over time), or they can step into leadership roles as executives who understand the needs of the business and how to leverage technology to drive top-line revenue, profitability, cross-selling, up-selling, customer satisfaction/experience management, and the many other business dimensions of a truly IT-smart organization.

Making the shift from a tactical, operations-oriented manager to a strategic enterprise leader can be a significant challenge for CIOs who already are consumed with the demands of a 24x7, crisis-to-crisis driven environment. The transition to business-savvy CIO is best accomplished by IT executives who recognize the need for and develop the right leadership skills. For example, the focus on incremental process improvement needs to evolve into a focus on business strategy and end-to-end business process; objectives around cost reduction need to be augmented by programs that create innovative solutions that support sustainable business growth; and human resource management needs to shift from a staffing focus to one that looks at the overall IT organization and talent requirements in order to most effectively support business objectives. Further, risk aversion needs to evolve into risk management. And finally, information security can no longer be relegated to an IT-only concern; rather, it needs to be treated as an enterprisewide cultural responsibility.

When you consider all of these dynamics, there has never been a better time to be a CIO.

Harvey Koeppel is executive director of the Center for CIO Leadership.