The modern digital enterprise relies on technology more than ever before, but that reliance won’t automatically equate to a more strategic role for the internal IT function. In this digital business and cloud computing era, the CIO’s greatest challenge is to forge a new role for the IT organization that focuses much more on adding value and driving competitive advantage and much less on operating and maintaining legacy systems, says Margaret Miller, whose 30-year career in IT includes leadership roles in the private and public sectors, most recently as CIO of New York State until the spring of this year.
Among the modern CIO’s strategic imperatives, according to Miller:
- Serve as the champion of the customer’s digital experience. Working closely with the chief customer officer and/or marketing, IT must create a model of the experience we’d like our customers to have, whether online, by phone, or in person, from the first interaction to purchase to post-purchase support. This model can then be translated into a technology strategy required to realize this vision.
- Demonstrate a deep understanding of, and ability to respond to, rapidly changing business demands. In order to respond to, or ideally, anticipate, business change, it’s vital that the CIO be a member of the top executive team, included in all strategic discussions.
- Drive down legacy IT costs. Savings gained here can free up valuable resources to invest in meeting increasing demand for IT resources.
- Integrate the increasingly complex web of legacy and new, in-house, and third-party IT services. Integration (including data services) provides a consistent customer experience while mitigating operational and cyber risk.
- Ensure that business colleagues are well-informed. They should know about cyber and operational risks and should be engaged in decisions regarding mitigation.
I recently sat down with Miller, who I met at an IT conference in Albany, New York, where she delivered the keynote address. I was intrigued by her viewpoint and experience, and wanted to further discuss the changing role of the CIO in this always-on, never-stand-still business and technology environment. Here are the highlights of that discussion.
Get Busy Living…
“IT leaders need to choose whether to lead the change or be victims of it,” Miller says. “CIOs need to mature into leading the evolution of the customer’s end-to-end digital experience by dismantling ‘fortress IT,’ making the boundaries of IT more elastic and porous, and ceding control back to business leaders within a clear framework. We can lead the debate and encourage our C-suite colleagues to recognize and plan for the inevitable changes.”
Miller sees a range of possible outcomes for the CIO and the corporate IT team. None of them tolerates business as usual.
- Industrial artifact. The professional CIO and most of his or her team become artifacts of the pre-digital age. The role of corporate IT is split among business functions, including finance and purchasing.
- Integration, BI team. The internal IT function evolves into a small group of technology experts focused on data integration and business intelligence. With the deconstruction of the IT organization, whereby enterprises rely on a complex web of external providers, the task of providing BI presents significant challenges.
- Strategist/service broker/integrator/procurement manager. In this scenario, the internal IT function is recognized for its vendor-management skills, as well as for providing technology and data services. It retains responsibility for the integration and management of this complex web of relationships.
- Chief Operating Officer. At the other end of the continuum, the CIO—with deep skills in strategy, program management, vendor management, and process optimization—takes on leadership of the transactional back office: finance, HR, supply chain. Small, specialist teams in these areas develop strategy.
“In my view, the first two of these would be a very bad choice for any business,” Miller says. “The IT team’s view must always be end-to-end and medium- to long-term, which sometimes sets it at odds with others on the executive team. However, this can lead to productive debate and better decisions for the business. If the CEO doesn’t think his CIO can communicate at the right level, then the organization needs to get a new one.
“Whether COO or IT strategist/service broker is the right role for the CIO will depend on the business and the individual. Too many businesses are wasting a huge source of competitive advantage by limiting the role of the CIO. There is significant talent waiting to be tapped and innovative solutions just waiting to be given a hearing.”
I asked Miller about the different demands that compete for a CIO’s attention, such as security and customer intimacy. How do CIOs go about striking the right balance?
CIOs must constantly ask themselves and their colleagues a series of questions, she says. Is a tactical solution that satisfies the immediate demands of corporate partners more important than the long-term goals of driving out complexity, risk, and cost? Is the lure of that cloud-based “best of breed” service worth the long-term lock-in to that vendor, the duplication of data, and possible compromise to the overall customer experience? Is it more important to invest in securing legacy systems built for a simpler, more secure world and on which today’s profits depend, or to invest in building new capabilities?
More broadly, is security more important than access? Is privacy more important than customer intimacy? Just because something is technically possible, does that mean it should be done?
“The answers are, of course, situational,” Miller says. “A clear and agreed model of the end customer experience, and guidelines for cybersecurity and operational resilience can prove invaluable. However, all such decisions are best made in consultation with a well-informed business partner.”
She offers the example of one organization she worked with that created a cybersecurity advisory board comprising external experts as well as senior IT and business leaders. The board, which had the explicit support of the CEO, not only raised the profile of cybersecurity within that organization, but it also provided key engagement and education forums.
‘Uncompromising Customer Perspective’
We also talked about how CIOs can help their organizations adapt to the digital world.
“The first imperative is to ensure that our strategies are informed by an uncompromising customer perspective,” Miller emphasizes. “In this mission our marketing colleagues can, if we’re lucky, be our greatest allies.”
Some organizations, she notes, have designated a “chief customer officer” with whom the IT organization can partner. In other organizations there’s someone who, de facto, functions in that role.
“We have to create an explicit vision of the full lifecycle and 360-degree experience each customer should have with our organization,” Miller says. “This needs to be not an IT vision, but an organizational one that informs and guides everything we do, including the often-unstated imperatives of security and reliability.
“There must be agreement that this is a priority and a clear vision for what that means for our organization. Only by understanding this vision, and understanding the gaps between our current capabilities and this vision, can we create the technical and organizational strategies we need at every level.”
IT Is Everyone’s Job
I asked Miller about the responsibility of senior business leaders and government officials to understand digital technologies, given the fact that they’re so central to their organizations’ success.
“Given the strategic importance of IT, it’s far too important to be left to the IT department alone,” she says. “This requires business-focused IT executives with a mission and passion to explain, but also effort on the part of their partners in the business departments.
“No program of business education would be considered complete without a thorough grounding in finance. In today’s world, it’s just as crucial that all business executives make the effort to educate themselves in IT and play an active role in decision-making on IT topics. Every CIO I know would be more than happy to spend time with their business colleagues offering a ‘Cliff Notes’ introduction to key topics such as cybersecurity. My suggestion: Just ask them.”
Matthew O’Keefe is a vice president and corporate technologist in Oracle’s Cloud Infrastructure group.