A virtual enterprise model is emerging that is based on the speed and scale of cloud technologies, notably, hybrid clouds, and the rapid results generated by combining artificial intelligence and automation. This is leading to “radical agility” inside organizations and taking center stage to unlock new value streams is the CIO, a new IBM report finds.
“The idea that the business leads technology strategy is now obsolete,” said Laura Money, CIO at Sun Life Financial, in the report. “Business strategy is developed in partnership with our technology strategy—as we share a common goal of putting clients first and making it easier to do business with us digitally.”
CIOs are driving transformation and business value at an astonishing pace, the report said. “Back in 2011, only 1 in 5 CIOs ranked themselves as a critical enabler of business/organization vision,” the report said. “Now, they’re collaborating with colleagues to meet fast-changing demands and driving value throughout their enterprises and beyond.”
Tech adoption has been accelerating and becoming an inextricable part of every organization and business function during the pandemic. At the same time, the IT function “has grown dramatically in scope and complexity,” the report said. The role of technology leaders has expanded not just in breadth, but increasingly in strategic influence.”
The ability to adapt to the unknown and transform risks into opportunities will be indispensable, the report said.
The CIO’s new identity
The report quotes several CIOs who likened their roles to that of a “chief operating officer of technology,” aligning to business goals and business outcomes.
“IT is involved in every functional unit,” said John Gibbs, CIO at International Airlines Group (parent company to British Airways). “The role of the CIO is becoming less of a tech leader and more of a business leader. It’s how you apply the technology that makes a difference.”
Because IT teams work across the organization, the report said CIOs have a unique opportunity to share best practices across functions. “The CIO role is becoming more horizontal,” said Steve McCrystal at Unilever. “We try to eliminate silos and align to business outcomes.”
During a period of widespread anxiety and workplace disruption, technology leaders have been central to addressing their organizations’ most pressing needs. Citing examples from tackling supply chain issues to helping ensure business continuity to enabling remote work, 77% of the CIOs in the study reported that their teams played a vital role in their organizations’ response to the pandemic.
Research from IBM’s Institute for Business Value also found that the pandemic has prompted 55% of organizations to permanently course-correct their strategies. This includes accelerating the pace of digital transformation, adjusting the approach to change management and shifting to more cloud-based business activities.
“Curiously, only 23% of CIOs in our study expect pandemic-related shifts to remote workplaces to become permanent,” the report noted.
Leading the charge for change
Respondent CIOs reported that 20% to 40% of organizational business processes have been automated—from supply chain to manufacturing, finance to procurement, and marketing to R&D. This automation helps drive intelligent workflows, which in turn create a “golden thread” of value, enhancing connections within the enterprise and across its ecosystem, the report said.
The tech revolution continues to accelerate, mainly through cloud implementations, which the report said represent an increasing portion of current IT workloads.
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“This reflects the swift and growing embrace—and effectiveness—of cloud-native platforms, in particular, their proficiency for connecting and activating data to enhance engagement and collaboration,” the report said.
Significantly, when respondent CIOs were asked to reflect on their organizations’ transformations, a dramatically increased number reported higher levels of maturity in their hybrid cloud operations (a 700% increase in CIOs reporting advanced capabilities since 2019), AI-enabled workflows (a 560% increase since 2019), cloud-native development (a 467% increase since 2019), and other key technologies, the report said.
New status with CEOs; better alignment with CTOs?
CIOs today manage a complex portfolio, spanning a diverse set of responsibilities and constituents. These include offering technology services to a wide spectrum of users, making data insights readily available, transforming work environments through productivity platforms and extending workflows across business functions.
Reflecting their increasingly strategic role, 52% of the CIOs in the IBV study reported engaging with their CEOs more than any other C-suite leader. “This positions CIOs at a critical intersection in their organizations, with a direct connection to the most senior levels of leadership and a vantage view across business functions,” the report said.
At the same time, the CTO role is gaining increasing prominence, giving CIOs “crucial allies within the technology function.” At a high level, the technology function has a common set of responsibilities that are typically distributed between CIOs and CTOs.
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More than 70% of technology leaders surveyed reported that CIOs own back-office applications, including supply chain, workforce engagement, end-user experience and workplace enablement. They also often own areas including business continuity, sustainability and data governance and compliance, according to the report.
In contrast, a significant majority of CTOs focus on technology strategy, operations and architecture.
While the study found an emphasis on CIO-CTO teamwork, IBV’s research also revealed “that CIOs and CTOs are often working independently, and sometimes at cross-purposes.” Only 45% of CTOs indicated frequent interaction with their CIO counterparts. On the flip side, just 41% of CIOs cited frequent interaction with CTO peers, the report said.
The IBM Institute for Business Value surveyed 5,000 C-suite technology leaders, including both CIOs and CTOs. Respondents spanned 29 industries and 45 locations worldwide.