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Changing Role of the CIO
Chief information officers need to lean into the leadership aspects of their role to deal with the pace of change that 2024 promises. Here are five strategic areas to focus on this year.
Koenraad Schelfaut, Senior Managing Director and Global Technology Strategy and Advisory Lead
February 21, 2024
8 Min Read
Bill Cheyrou via Alamy Stock
From tech strategy to artificial intelligence, talent, and transformation to value creation -- the CIO needs to have a tech-led answer for every question from the C-suite. The job is mercurial, the responsibilities expansive and the demands relentless. So how do you cope? With leadership: CIOs need to move beyond cost-cutting to expand their role and embrace the fact that they can be the chief insights officer in a business. Generative AI might hold all the promise, but ecosystem partners and the factory floor could well prove your secret weapon in the year ahead. Here are five strategic areas for the CIO to focus on.
1. Be more than an expert on costs
Recent quarters have proven a little bruising for many CIOs. In 2023, business leaders faced an all-time high rate of change and disruption, up 33% in the past year. However, with the slings and arrows has come some hard-won experience on how to manage costs. Now is the time to use that expertise to create new growth for your business.
CIOs have had to understandably batten down the hatches and focus on non-discretionary spending. But they can’t limit their actions to simply keeping technology costs in check.
During the pandemic, we saw many examples of companies caught cold by focusing purely on cost-cutting. In the retail sector, in particular, many businesses were forced to reinvent how they operated. Companies with a strong digital core -- which uses the power of cloud, data and AI through an interoperable set of systems that can rapidly develop new capabilities -- and well-managed technical debt could recalibrate and even thrive. Many others did not survive, calcified by their own inflexible architectures and rigid operating models.
By learning from this experience, CIOs can use a digital core to adroitly respond to dramatic changes that are beyond their control but demand their fast response. On a more everyday basis, they will be ideally positioned to respond to the regular shifts and market disruptions that will crop up in their business, whether those are breaks in their supply chain, changes in their customers’ tastes, fresh demands on the talent pool, or whatever else the year has in store.
2. Become the chief insights officer
The CIO is in a privileged position. Many businesses’ issues will require technology interventions. And they have first-hand access to a business’s data -- giving them the exclusive scoop on shifts in market and customer trends.
Tech leaders need to ensure they have the means to interpret that data and the resolve to act on it. It’s no longer a struggle to get tech challenges at the top of the board's agenda and the CIO has a wider mandate to be an agent of change. They need to press this advantage to be a visionary for the business. They are ideally positioned to take the business agenda and translate it into a technology strategy, using the data at their fingertips.
As Accenture‘s latest research on Reinvention in the Age of AI points out, tech leaders should understand “the potential to reinvent your value chain and develop end-to-end capabilities powered by generative AI and new ways of working, rather than only focusing on individual use cases … Reorient your organization from siloed functions to end-to-end business capabilities and decision making through a unified data architecture and cross-functional teams.”
CIOs may be sitting on a gold mine of data not just for the business, but for their whole industry. A business may be able to not only derive insights for their business but for their entire sector, which can be sold back into the market. Judging by some of our most recent work with clients, every large business is a data insights company waiting to happen.
3. Get beyond good advice to powerful partnerships
It’s highly unlikely that a CIO will now know how to handle every part of their business. The landscape has become devilishly complex. CIOs today are bombarded with good advice from hyperscalers and consultants such as myself. Everyone has the solution to their problems (see points one to five in this article).
The CIO needs trusted partners to help them find the options that are future-proofed and will best address their particular challenges. These partners need to be made accountable for getting value from every tech investment. Get their advice on your tech investment sequence. Have them assess the impact on your operating model. Ask them to identify the potential synergies between the various departments in your business. (I look forward to getting even more calls from clients now on all the above.) And then assess which of your platform partners is best positioned to deliver on your ambitions.
When it comes to the day-to-day work of service delivery, application maintenance, infrastructure, hosting, workstation management, implementing new patches, coding, firefighting: Delegate it all. As CIO, that isn’t the real job.
Many companies might imagine the ideal CIO as someone who has been raised as a programmer, has experience with enterprise software implementation, is fluent in application maintenance, and is now upskilling on generative AI. For me, that’s table stakes. My additional asks are: do they understand the business? Do they know what the CEO’s vision is? Do they have a clear idea on what the major threats are to the company? Do they understand what the company’s supply chain challenges are? Have they considered what the impact of, say, a geographic expansion would be on the business? Or inflation of 8 or 9%? And do they have technological solutions in mind to mitigate these challenges before they occur?
The CIO needs to become more business oriented, and the CTO needs to be operating at the edge of technology’s potential -- as exemplified in our 2024 Tech Vision report. As it points out, as “technology becomes more human, it becomes easier to work with -- and will spark an infusion of technology through every dimension of the business.”
4. For generative AI, get the brilliant basics right
Most CIOs will be familiar with the top 20 large language models (LLMs); what’s essential, though is a nuanced appreciation of the functionality each offers, and which LLM is most relevant to their industry and their business. When choosing an LLM, CIOs need to also assess their own tech landscape: will a particular LLM work with my existing data and systems? Will I need to ramp down and rationalize my application portfolio? Am I going to build, buy or modify an LLM, and what are the implications for my business with each? And do I have the right enterprise architecture to swiftly adapt to new or changed models?
Choosing the right model is the first brilliant basic that tech leaders need to get right when it comes to generative AI. They need to decide where they are on the spectrum between buying, boosting, or building their own model. Their next step should be to examine how they develop software in the age of generative AI, with a focus on speed without jeopardizing quality and security. They need to assess how they can autogenerate code during application maintenance and more and take advantage of crowdsourced code that already exists. The traditional maxim of “never write a line of code you don’t have to” has never been more in vogue.
CIOs also need to review every aspect of their architecture and their processes with gen AI in mind. Put in place a composable architecture so that you can respond much faster. If you want your business to thrive, there is no such thing as a steady state. CIOs need to commit to building a digital core that integrates cloud, data and AI. As our Tech Vision report says: “To truly reap the benefits of generative AI and build the data-and-AI powered enterprise of the future, businesses need to radically rethink their core technology strategy. How they gather and structure data, their broader architectures, and how they deploy technology tools and the features they include need to be rethought. And new practices like training, debiasing, and AI-oversight must be built in from the start.”
In fact, this may be already happening on your watch, whether you realise it or not. The same report points to evidence that “in many cases generative AI tools are so intuitive to use and employees are adopting them so rapidly, they are permeating workplaces from the bottom up -- faster than organizations can create formal programs.”
5. A new stakeholder is a friend you haven’t yet met
Most executives will agree that technology has become so imbued in business that it drives and shapes every aspect of a business strategy. However, some CIOs find they are still reporting into a C-suite colleague, rather than the CEO directly.
The CIO needs to get proactive on two levels with their business: they need to ensure they are an active C-suite member; and they need to get on first-name terms with their business unit managers. The boundaries are blurring between business, IT and the “shop floor” and the CIO needs to move smoothly between them all.
As part of this proactive engagement, set regular meetings with both your familiar colleagues and others on the executive or the production line that you have yet to meet. Don’t start by asking what their problems are -- this will lead to a laundry list of system faults that you are probably already working on. Instead ask: “What do you want to do and what is your vision?” This will help you get to a place where your technology team is working across the organization on solutions for collaborative strategies. And it will move you away from running an IT department that is on constant call to fight fires from a one-way traffic line of tickets. From there, you can start imagining what your IT function will look like in the future and the skills you need to build now to make it happen.
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