How is the CIO role changing?

Ask most people what a CIO does and all you are likely to get is a blank starePhoto: Shutterstock

Ask the man in the street what a CEO does and they won’t hesitate to tell you it’s the executive in charge of running a business. It’s the man or woman with clout in the boardroom. Sir Alan ‘You’re Fired’ Sugar from The Apprentice, say, or Microsoft’s chair-throwing, keynote-mauling Steve Ballmer.

Now ask what a CIO does and you’re likely to get the sort of blank look that crosses the faces of Apprentice contestants when asked why the bladdy hell they failed a task a three-year-old could do in its sleep. The man in the street doesn’t know you exist. But the times, they are a-changing.

“The title CIO used to mean Career Is Over,” says Tony McAlister, CTO of Betfair. “There’s a bit of a perception in the business that we’re nerds and geeks, and they never want to let us out of our office because we’ll say something stupid or we’ll look silly with our dark glasses with tape around them. And that has been built up over time, and somewhat leveraged by people in my side of the house to our advantage, but I think that’s dissipating.

“When you look at some of the largest companies on the planet right now – Google, both of those guys are tech guys. Zynga, tech guy. Facebook, tech guy. They’re all tech guys who have become the CEOs and they’re running some of the biggest companies on the planet now… CIO is becoming a cool career path.”

Betfair CTO Tony McAlister

CIO no longer means Career Is Over, says Betfair CTO Tony McAlisterPhoto: Betfair

Part of the reason for the low public profile of the CIO role can be explained by the many different job titles associated with it. There are CIOs, CTOs and COOs all performing the duties of the chief information officer, along with heads of IT, heads of technology, director generals of IT, chief officers of IT, business process directors, IS directors, directors of technology strategy, directors of innovation, to name just a few of the titles attached to today’s CIO. Is it any wonder the general public remains at best unaware of what a CIO is and does?

Nic Bellenberg, IT director at magazine publisher Hachette Filipacchi, says all businesses rely on technology to make them function. “You have to keep that running, you have to think of new ways of doing things that make it run better,” he says, explaining the job in layman’s terms. The many titles that CIOs can be found working under are a symptom of how tightly tailored the role is to the specific requirements of each organisation, he says. It’s horses for courses – and Bellenberg sees more horses and more courses shaping the CIO role in future.

“There seem to be so many different ways of fulfilling these roles that a lot of it’s ultimately driven by the businesses, the companies, the boards, how they’re structured, how they’ve grown, where they’ve come from, where they’re going to and what they want to achieve,” he says. “There are going to be lots and lots of different companies with lots and lots of different requirements.”

“The great thing about the CIO [title] is…

 

… that it says ‘information’ without mentioning ‘technology’ – the technology bit’s assumed,” he adds. “My role’s called IT director, and one of the lines of my three- or four-line IT strategy has always been we move the focus from the ‘T’ to the ‘I’. We have to understand technology, we have to use technology but actually if we don’t understand the information that it pushes around, what it is, what it does, how it enables the business then you’re never going to be more than a glorified repair shop.”

The letters on Betfair’s McAlister’s business card may refer to a chief technology officer but his role at the online betting exchange is that of the CIO. In his view, the job has changed significantly in recent years. As technology’s role in business has grown, so the CIO has been lifted out of the darkness of the proverbial server room and elevated to the top table, garnering a significant share of boardroom limelight. The CIOs of today are responsible for generating revenue, not simply cutting costs.

Mark Zuckerberg

Facebook CEO Mark Zuckerberg is a prime example of a tech guy in charge of a business behemothPhoto: Maurice Svay

“The CEO can’t make their business grow without you,” says McAlister. “So the CIO role is an incredibly vital cog in the machine, where before it was somebody down in the basement keeping the lights on. It’s no longer that. That genie’s out of the bottle – it’s only going to grow [in influence] from there.”

“What was typically believed the CIO – who was handling all the back-office, datacentre, corporate systems and support functions – has become more of the product person as well, the person delivering the products and services that companies are doing. A lot of that’s because so many companies have become so much more dependent on technology to do their job,” he adds.

“It was your job to keep the systems up and running and make sure you had enough capability to deal with peaks in the business, and that was most of what you focused on. Now we’ve been pulled to the front of the house – actually building the products that the company sells or making its services available through technology out to the customers, so we’ve become front and centre.”

Of course, the core task of keeping the lights on is still an essential component of the CIO’s job – which necessarily takes up every waking second when something goes wrong. But on an average day, this task should only require a fraction of your time, says Mike Wright, head of technology at global investment provider Man Group.

“In my view, if you can’t keep that to five per cent of the job you’re short-changing other parts of the job now,” he tells silicon.com. “The stuff that used to require a lot more work is basically a commodity or you can delegate it further down the IT organisational tree.”

Wright says the lion’s share of the CIO role today consists of “building tomorrow’s world” – whether it’s overseeing projects with a high IT intensity or working with other executives to talk about their changing business priorities and how IT can support them. “Making sure you’re building the improvements to the business to make them understand what, where, how we can be more creative, more competitive, more challenging, more cost-effective… [thinking about] what we can do differently,” he says.

But even this role is shrinking, reckons Wright, as the expanded role of technology in businesses has forced other senior executives to get to grips with more of the tech. The portion of the CIO’s job that is growing is…

 

…the final quarter: the most future-gazing and strategic quarter, according to Wright.

“The remaining 25 per cent is looking much more at strategy – where is the firm going in general overall strategy, thinking about architecture and those kind of things,” he says. “That’s growing in terms of if you’re thinking about how you get the right balance between knowledge working and information security. Should you be thinking about the impact of social media?

“And in regulated businesses, like financial services, how do you allow staff to be creative and research and stuff but still make sure, from a regulatory point of view, you can monitor what they’re doing?”

Wright says these issues are grey areas. “But they are the areas where the CIO is going to be increasingly expected to tread,” he adds.

Betfair’s McAlister agrees. “The CIO now has to be the person bringing business ideas to the table,” he says. “How do I take this new technology that’s out there and how do I get the business side to understand how we can exploit it to make our business grow or make it better – not just the traditional ‘make it more cost-efficient’, which is what we’ve usually been tasked with. How do I now use this to grow the business? So you become much more of a revenue centre than you used to be. You used to only be a cost centre.”

McAlister says five years ago Betfair had 100 developers and one major product. “Now we’ve got 600 developers and we’re running a few hundred products. It’s a different ball game,” he adds.

Mike Wright, head of technology at Man Group

Consumer and business technology can no longer sit in separate, ring-fenced piles, says Mike WrightPhoto: Man Group

This shift in emphasis from efficiency to innovation is a reflection of the sweeping winds of change blowing through businesses. The consumerisation of IT is the nail in the coffin of little Hitlers in IT holding the keys to the kingdom and vetoing the requests of their colleagues in the business. The computer-says-no attitude doesn’t fly anymore, says Man Group’s Wright – not now your executive colleagues are both better informed about technology and can go and “find a supplier who can”.

“If you go and talk to people in the business, they actually know a lot about what the technology can do. And therefore the debate and the discussion is, to my view, much healthier because you are actually getting debate among people who understand the art of the possible themselves,” he says.

“People outside the business get firmer and stronger in their knowledge and understanding, so that the debates become more of peers – whereas if you go back 10 or 15 years, IT was in a very privileged position because whenever anyone said, ‘Oh, I want to do this’, the CIO could say, ‘Oh, I’m sorry. The technology doesn’t allow that’. You were king of the castle. That’s no longer the case.”

The dismantling of the CIO’s ability to control the business by the provision or withholding of technology has other implications for the IT department, according to Wright. The footprint of corporate IT needs to shrink.

“When there was this nice distinction between business and consumer technology you could put firewalls up and you could ring-fence it and information security could sit there and say, ‘Thou shalt not…’. But if you look at iPads and blogs and wikis and so on, consumer technology is evolving massively faster than business technology. And for most businesses we need to actually understand and harness that, not reject it. But that means the corporate IT function needs to slim down and change in style – it needs to be smaller and more of a support, rather than a controller,” Wright tells silicon.com.

The CIO role itself is also changing – as it must – to keep pace with the changing nature of the information being managed. “Information is evolving from what I might call batch, daily, structured information. And it’s moving towards real time, more external and more unstructured,” says Wright. “Therefore the role of manipulating that information is changing, and that’s forcing the CIO role to change, along with the corporate IT function.”

Could the CIO role itself ever be outsourced in future, becoming all but redundant as more and more IT and business processes are outsourced to external suppliers? No, says Hachette Filipacchi’s Bellenberg. Who else would be able to “predict the gotchas” in suppliers’ contracts?

Man Group’s Wright says even if you outsource everything…

 

… you still must manage the vendors. “You’ve got to keep strategy inhouse, you’ve got to keep architecture inhouse, you’ve got to keep vendor management inhouse. Don’t get me wrong though – that could be as few as 10 people,” he says.

So what is the CIO going to become – apart from the head of a much leaner and more future-gazing corporate IT department? Wright ultimately sees the role dividing into two. “I would say the CIO role will bifurcate into a central CTO, whose skillset is all about efficiency and reliability, and a CKO – chief knowledge officer – who’s all about effectiveness and creativity,” he says. “But harnessed around and on business process – which is not what many of the knowledge management folks are now who, I’m sorry, I consider a bit touchy, feely, cranky.”

Some splitting of the CIO role is perhaps inevitable since the demands on the role can already seem divergent – as if the business is asking for impossibly varied skills from an individual, however talented.

Hachette Filipacchi’s Bellenberg says organisations are very specific about the skillsets they are seeking. “A lot of the roles that are being advertised, particularly web-based businesses, they’re looking for people to be CTOs, CIO/IT director/head of IT, whatever it’s called, but they’re also saying we want you to be a developer and understand how networks work, and be a great manager and motivator of people and make all these things happen on time,” says Bellenberg.

“I’ve never had a job description,” he adds. “It would be interesting to poll CIOs, asking ‘do you have a job description or is it just assumed that you do everything?'”

For Betfair’s McAlister, the CIO is already the chief of innovation and head of what amounts to a start-up within the company, overseeing the R&D team which is coming up with the cool new stuff that will be powering the business’s engines tomorrow.

Betfair iPad app

We were first out with iPhone and Android and iPad apps, says Betfair CTO Tony McAlisterPhoto: Betfair

“My R&D team has a pretty free rein,” he says. “I set their agenda – the things I want them to chase, but that’s set at a very broad level, and then they show up in my office and show me really cool stuff. Then I go, ‘Well, that’s really cool but we’ll never make any money from it. But thank you for that’. Or they’ll show me something and I’ll go, ‘That’s really cool. I think we can make money from that’. And then it’s my job to go and convince my marketing guys to sell it.”

Mobile apps were one nascent territory McAlister and his team colonised of their own accord, kicking the tyres of what was possible with the iPhone and other devices, and going on to launch commercial betting apps ahead of their rivals. “We were first out with iPhone and Android and iPad apps,” he tells silicon.com. “That all came out of my shop. Nobody asked me to build those things… I asked my team to build some applications to see what we could do with betting on these different types of platforms – and now we’ve got a business that’s growing incredibly fast on the mobile side.”

The rise of social networking is another potential business opportunity to this tech chief. “I view that one almost more as a business channel than so much a technology issue, even though there is unique technology or unique ways you go about building things in social networking. But for the most part it’s a different channel for you to sell to people – and even sell different things, like virtual goods and virtual money. Microcents – where you sell things for percentages of a cent. Things like that are opening up whole new channels to companies.”

With new product innovation being such an integral part of the day job, it’s no wonder McAlister is…

 

…already party to top-line strategy discussions at Betfair. “If we decide to move in to a new territory or a new customer channel, I’m always involved in those conversations,” he adds. “Right at the start. Even though they don’t know yet what technology is going to be involved… [In the past] somebody would have come to me and said, ‘Hey, we’re going to do this now – and this is what we need you to do’. Now they’re saying, ‘What can you do to make this happen?’.”

So while the CIO of yesteryear might have been kept busy banning social networking, restricting employees’ access to the mobile internet and warning the CEO away from cloud computing, the CIO of tomorrow will be asking what new business opportunities these technologies can enable – viewing them as the tools that can help take their job to the next level.

Nic Bellenberg, IT director at Hachette Filipacchi

It’s still going to be about delivering value, rather than just managing the technology, says Nic BellenbergPhoto: Chris Beaumont/CBS Interactive

What then should CIOs be thinking about doing now to prepare themselves for the changing shape of their role in the years ahead? “It’s still going to be about delivering value, rather than just managing the technology,” says Hachette Filipacchi’s Bellenberg. “You just have to be on the front foot. You have to have an ear to the ground and the things that are going on.

“There’s so much open-source technology that is running all the web businesses of the world. There are great things being done by people with brains the size of planets that the general public will never know about, that can actually make a huge difference to the way you run a bit of your business if you know about them and you can harness it. So it’s keeping eyes and ears open – beyond the obvious, ‘Oh, look there’s a new version of Microsoft Word out’.”

Betfair’s McAlister reckons the CIO of today should be aspiring to be the CEO of tomorrow. Indeed, the company’s current CEO, David Yu, was formerly its CTO. “No other executive cuts across the entire company the way the CIO does,” says McAlister. “The things you need to really stretch and work on most now are business knowledge, understanding the business, understanding marketing. Understand financials: better than just the cost side of the sheet, you’ve got to understand the revenue side of the sheet.”

People skills are vital to today’s CIO, according to Man Group’s Wright – and will be even more crucial tomorrow. “People management is growing in importance, as the war for talent gets higher. You have to really work to help people grow and develop and make them more effective than they thought they could be. To me that’s a great challenge – I love that – but it’s also a great difficulty,” he says. “There are plenty of great people. What you have to do is excite them.”

Betfair’s McAlister also emphasises the importance of skilled staff. “Regardless of the amount of technology I can use, I can buy, I can leverage, without my 600 really, really talented people we can’t get anything done,” he says.

Are today’s CIOs positive about the future of the role? Man Group’s Wright is positive but also believes it is limiting to define oneself in a role. “If [a new graduate] sets out and says, ‘I want to be a CIO’, I think that’s jumping the gun. I think you want to say, ‘I want to have a career that challenges and excites me’,” he says.

“In 20 years’ time, who knows if the CIO role even exists?” he adds.