The capabilities CIOs need to create value in a changing world

The video below of an interview with me was recorded by CIO Magazine in conjunction with a series of events sponsored by IBM on the Tomorrow-Ready CIO.

In the video I discuss how the role of the CIO is at a point of divergence. On one hand we’re seeing the CIO marginalized in some organizations as business units bypass the IT department to procure technology directly. On the other hand some CIOs are leveraging the increasing importance of technology in business to create a new role for themselves, in which they work across the business to help drive strategy and develop an institutional understanding of the opportunities that technology is affording the business.

I see the new CIO as a key figure in building the extended enterprise in which organizations integrate partners, suppliers, and even customers into the enterprise as they realize creation of value is no longer restricted to the team within the business’s own four walls. Doing this will allow CIOs to create superior value for the business and expand their role.

Full Transcript of Video:
In looking at the future of the CIO, I tried to create a framework which looked at the external drivers, the things that are shaping technology and deciding the business world. How that changes the IT function and, in turn, how that shapes the role of the CIO, in terms of what are the capabilities, what are the enablers of the new role of the CIO, and how CIOs create value.

Some of the key capabilities of CIOs are visionary leadership and that requires being able to create a compelling, achievable, realistic vision of what the IT function of the future looks like.

Most of it requires an entrepreneurial mindset, and I think that more and more we are seeing the rise of entrepreneurship in business and at large, but it indeed this needs to be applied within business and within the IT function. Both in terms of being able to have an opportunistic mentality, to look and to seize opportunities. But also to take guidance from what the whole, what is happening in the world of start-ups today and particularly, being able to build this so called lean start-up To iterate very fast and to building and learning from what you’re doing rather than going through long development cycles.

I think there are also some fundamental capabilities in being able to not just have a strategic perspective, but also engage the board, engage the key executives, and if necessary to educate them on the impact of technology on the business, in order understand why technology is so central to an organization’s future.

CIO’s need to demonstrate that they can create superior value in order both to justify their role and also what should be an expanding role inside the organization. They need to be able to demonstrate that they can facilitate better business decisions being made. They also need to be able to be a facilitator of agility in organizations by being able to build flexible processes that the organization can be agile and respond to a changing business environment. They need to be able to also create a perspective on the organization where strategy is developed, understanding that the whole future landscape for both technology and the business around them. And one of the key ways in which CIOs create value is really being able to build what is being described as the extended enterprise. Where value’s not created just within the organization but beyond it, and the role of CIO is fundamentally to extend the reach of the organization to its customers, to its suppliers, cross its partners, cross the whole ecosystem where value is created.

I think that in many organizations that technology functions as a point of divergence where some, many cases we’ve seen the technology functions start to be marginalized, commoditized, budgets shrunk and just as perception that is creating a basic pipes that make the organization run. So there’s a real danger of the whole technology function being marginalized, endangering the very organization itself.

So this is a responsibility of the CIO to be able to demonstrate the value today and demonstrate the potential for value creation in the future. I think we’re going to see two different types of organization, where the technology function is both creating value, demonstrating that value creation and be able to support the potential of the organization, ones where the technology function becomes marginalized, to the detriment of the organization itself.