A new Tata Consultancy Services study on CIOs finds their responsibilities are continuing to change and adapt as they help their companies rise to new challenges.
The roles of Chief Information Officers (CIOs) in businesses have been evolving for years, but have been changing even more amid the COVID-19 pandemic. According to a new study by Tata Consultancy Services (TCS), the biggest changes are being seen inside companies where CIOs have been leading the way in digital transformations.
The 2020 TCS Chief Information Officer Study, which was conducted by the TCS Business 4.0 Institute thought leadership center, surveyed 1,010 IT executives in 11 industries in the US, Canada, the United Kingdom, Germany, and the Netherlands to gain their insights into the roles of CIOs in 2020 and the future within their companies.
Some 75% of the responding executives work in enterprises with gross revenues of $1 billion or more. Seventy-two percent of the respondents said their companies have IT budgets of more than $50 million a year, while 45% said their companies have IT budgets of more than $100 million annually. The study was conducted in May and June of 2020.
One of the central findings in the report (PDF) is that CIOs are the executives most likely to play top roles in company digital transformations. This trend especially involves idea and strategy development for business IT systems and direction, according to about 75% of the respondents.
The respondents also said that 61% of their CIOs take leadership roles in governance, while 54% lead project management initiatives.
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One place where CIOs still yield power to other C-level executives is in determining the budgets for their digital transformations, according to the study. Some 35% of digital transformation budgets are set by CEOs, another 29% are set by CFOs, and 20% are set by leaders of production and manufacturing operations. Only about 18% of those budgets are set by CIOs, according to the report.
The report found that about 220 of the 1,010 companies represented in the study are leaders when it comes to implementing and moving forward on digital transformation initiatives, while about 219 of the respondents can be described as being followers that remain in pilot project mode or limiting progress to certain business units. The remaining three-fifths of the respondents are somewhere in between.
"The study allows us to see how those roles are changing and the velocity and direction of the changes with respect to other C-level executives," said Akhilesh Tiwari, the global head of enterprise application services for TCS. "It lets us see whether CIOs are getting more prominent or more siloed in their technology tracks."
In fields like high tech and communications, the data showed CIOs leading such initiatives, which was to be expected, said Tiwari. In other segments, such as consumer packaged goods companies, CIOs are leading such initiatives, but not as much.
"Some CIOs are very visible and active, and their personalities play into that," Tiwari said. "The CIOs who are doing well as chief educators of technology within their companies, those were in the leading pack. They're the ones who took the role of leading the consciousness about digital transformations and not just maintaining or preserving the IT states that they already had."
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For decades, the CIO function typically has been all about making sure that IT systems are running properly, but CIOs who are leading digital transformations are not just following those old ways, said Tiwari.
"What surprised me in the study was the increasing interest of company boards of directors about these digital transformations and how the CIOs are influencing them on this," said Tiwari. "The CIOs are leading those discussions for those companies. And that support of boards is a very good thing for CIOs."
In recent years, some people thought that CIO roles would be diminished due to the emergence of other executives and leaders, but that's not what the survey revealed, said Tiwari. "They have taken on a broader part of the business and more influence. It's always been there for CIOs to see new things and know more about them and share them within the company. What we see is that CIOs demystify technology for others."
For many companies, CIOs are taking on much more active roles in this area, with less jargon and simple, non-condescending ways of explaining technology, he said.
COVID-19 is demonstrating the value of CIOs
Though the latest TCS report wasn't updated to include the effects of the continuing COVID-19 pandemic on the study findings on CIOs, there are insights to be gained on how CIOs are being influenced and performing, Tiwari said.
Overall, COVID-19 has been an ironic boon for CIOs because it quickly validated what had been their ongoing, slow-moving digital transformation initiatives and accelerated them beyond expectations, Tiwari said.
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"COVID-19 forced the completion of digital transformation moves that were in process before the pandemic, including deployments of Microsoft Teams, which were then completed in weeks instead of months or years," he said. "The pandemic is taking CIOs and companies away from one- to three-year project implementation programs. Instead, it is getting needed cloud collaboration and productivity tools implemented in only a couple of weeks."
That quick progress is clear evidence that IT wasn't the problem with making these things happen in the past, Tiwari said.
"Instead, it was the inertia and change management of organizations that had to change," said Tiwari. "The resistance to change was the issue in why they were previously taking so long to accomplish. With the changes being forced by COVID-19 behind them, the voices of CIOs are being heard now more clearly."
This will have a positive impact far into the future, he said. "They will be able to implement these changes much faster from here out. That endorses and ratifies the voice of the CIO. There weren't any options for them in reacting to the crisis. The technology could not be the bottleneck to quickly making the changes that were needed."
For TCS, this shows the value of one of its most important corporate mantras--the idea of perpetual transformation for businesses and business leaders, according to Tiwari.
"You don't always have to do mega-sized technology projects," he said. "But, if you can do them and implement change in small steps, you can be agile in a very short time. The COVID-19 situation has emboldened that."
Recent collaboration platform implementations and hardware deployments done by a wide range of companies to get work-from-home initiatives running quickly in mid-March after the pandemic began in earnest are evidence of this wisdom. In hindsight, they typically turned out to be two-week-long projects, after originally being seen as future long-term initiatives.
"These heavy capital-intensive projects, you do sometimes need them, but without them you can still drive digital transformation," Tiwari said.
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