From CIO to Business Leader

From CIO to Business Leader

Business IT IT

4 minutes Read | Published December 14, 2020 | Michael Domondon

There is an ongoing sea change in the Chief Information Officer’s (CIO) role within an organization. Aside from running the internal IT operations, CIOs are now being asked to leverage information technology to turn IT into an income-generating unit of a company. For IT to add this kind of value to an organization, the CIO’s role needs to be broadened. From being mainly a functional leader, a Chief Information Officer needs to transform into a business leader as well.

A new challenge

CIOs already face challenges with the current responsibilities of their position. These responsibilities are challenging, because they are seemingly at odds with one another. The CIO and the IT department are tasked to “keep the lights running”, to make sure an office’s IT is well maintained and cared for. At the same time, a CIO needs to be technology- forward, always ready to adapt new technologies into their current infrastructure. As if these two things are not challenging enough, the CIO is asked to handle these responsibilities while also reducing operating costs. 

Adding a mandate for IT to be income-generating is a major transition for a technology and operations-oriented officer. CIOs normally take a back seat to other C-level executives, like the CFO and CEO, when it comes to the revenue side of business agendas and goals. This new responsibility thrust upon CIOs has caused dissatisfaction to some of those who hold the position. According to a CIO survey conducted by Logicalis Now in 2020, 49 percent of executives felt dissatisfied over the last 12 months. According to the research, some of this unhappiness is due to the pressure to impact their organization’s revenue. 

Although this demand to add business value is challenging CIOs like never before, and is the cause of unwanted pressure to some, there is no escaping the current reality for the CIO position. Like the adage popularized by business author Alan Deutschman goes: “Change or Die”.

CIO as business leader

At first glance, transforming the CIO into a business leader does not seem practical. The CIO---and by extension, IT---caters to the needs and requirements of internal customers: an organization’s employees. Therefore, the IT department is normally a cost center and not a profit center for a company. But becoming a business leader can be seen as an opportunity for motivated CIOs. If one would take the time to ponder, there are avenues that they may take in pursuit of this goal. Here are 3 things that CIOs might consider when molding themselves into business leaders:

Know the business

A CIO must learn the business of a company inside and out. They should make it a priority to get to know how the different business units operate. What processes are they currently using? Are all their IT needs being met sufficiently? Do the leaders of these units have any IT concerns? What about the workforce? 

Digital transformation

Having answers to these questions above will allow a CIO to leverage their major core competency, technology, in order to add business value. As stated previously, one of the CIO’s responsibilities is to be technology-forward. A CIO needs to have a paradigm shift. It should no longer mean only improving an organization’s IT infrastructure from a continuity of operations’ perspective. It should also be about ensuring that the exploration of new technologies is done with improving business-related issues or concerns in mind. Make IT into a driving force of business innovation. 

Hiring the right people

Shifting IT’s focus on business innovation will prove challenging. For technologically-driven business innovation to take hold, business units, who normally do not require that much IT know-how, will need to add tech skills to their core competencies. Almost 50 percent of respondents to a 2018 IT strategy survey conducted by McKinsey cites lack of technical skills in traditional business units as the primary obstacle to digital transformation.

The right people with the right skills will need to be found, and CIOs are uniquely qualified to be a part of the process of assembling the talent required for innovation. Either by selecting from the current workforce and training them or recruiting new talent, a CIO can take the initiative and be part of the decision-making process.

The business-minded CIO

A CIO who has transitioned into becoming a business leader may now face the challenge of their new mandate to impact revenue head-on. Here are a few examples how they may do so:

Build revenue-generating software products

The CIO can put on a “different hat” and consider external clients. They can leverage their IT workforce to create infrastructure or products that can impact revenue. For example, if a company is in search of new revenue streams, creating the necessary IT infrastructure and software needed for e-commerce is a good idea.

Another thing to consider is to productize internal company tools or software. A popular example of an internal tool being productized for consumers is Gmail. 

Streamline business processes with technology

If the CIO works closely with the sales and marketing departments, they may be able to contribute ways to increase sales and market share by making them more efficient. Automation can be used to streamline the business processes of these departments to improve their ability to generate revenue.

Use analytics to chart business strategies

The CIO is best qualified to drive a company’s big data strategy. By leveraging AI, machine learning, and data science, the CIO can drive the initiative to collect, sort, store, and most importantly analyze the company’s business data. The data can then guide business-related decisions and long-term company strategies. The analysis of big data is vital in the digital age to remain competitive. 

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