CIOs Move From The Back Office To The Front Lines

March 17, 2014 Dan Burger

As if CIOs, IT directors, and IT professionals of whatever title weren’t already under the gun for grinding out cost reductions throughout their businesses, welcome to the strategic enabler responsibilities. That’s good news if you have the financial and human resources to get the job accomplished, but bad news if you don’t. IBM i shops have a reputation for running with less total cost of ownership than AIX and Unix. There’s satisfaction in that, but what about that strategic enabler thing?

If you haven’t heard about IBM’s Institute for Business Value, that won’t be true for long. The IBV has tracked and analyzed the priorities of C-level executives for more than a decade through face-to-face interviews and produced reports specific to professional roles, including CEO, CIO, CFO, CMO, Chief HR Officers, and others. Some of these you may be familiar with as IT Jungle has reported on them on many occasions. See the Related Stories listing at the end of this article.

The Institute for Business Value moves the conversation that used to be focused on system feeds and speeds to taking the technical skills and applying them to solve real solution-based problems, which it identifies as improved collaboration, virtualization, analytics, business resiliency, and smarter business infrastructures. It is the difference between knowing how and where to apply a product versus only knowing what the product does.

This is entirely in synch with the marketing message that IBM has embarked on with its Smarter Planet efforts, which starts with smarter systems and smarter solutions themes. The investment to conduct 23,000 interviews since creating the Institute in 2003 is impressive, and shifting to a software and services business orientation is no easy feat. This most recent survey and report is the 17th in the series.

“Thought leadership is the most important marketing tool that a consulting firm has at the moment,’ said Fiona Czerniawska, co-founder of Source for Consulting and White Space. “IBM has been moving up the rankings for many years now and its effort and discipline in delivering quality content is paying off.” Czerniawska’s company rates research, analysis, and thought leadership.

Linda Ban, one of the lead researchers for the IBV since 2009, described this report as a more focused version of The Customer-Activated Enterprise, which was produced in October 2013. That one included input from all C-level interviews. This one has a CIO focus and is based on face-to-face interviews with 1,600 CIOs from 70 countries and 20 industries.

The rise of technology as the most important of external factors affecting organizations is the point that Ban says is the most impressive change taking place.

“When 2012 CEO study was published, it was the first time in eight years that tech was at the top of agenda,” she says. “Technology was number six in 2003 when these studies were first published. Across the entire C-suite right now, tech is in the number three slot. The top three topics–market factors that pertain to industries, macroeconomic factors (spending patterns and new markets), and technology traded places in their order depending on which executive title was being profiled. Regulatory compliance broke into the top three only when CFOs had their say.

The technologies that dominated the list you can recite in your sleep: mobile, cloud, collaboration, and social networking. It is the exact lineup we hear from IBM at every turn. Absolutely no surprise.

What I wanted to know is what are the challenges companies face when attempting to implement new technologies. Ban had the answers. Implementing technology is not the same as understanding technology.

“Integrating the digital and physical is much bigger than just the technology piece,” Ban says. “The entire organization has skin in this game. The CMO, for instance, is trying to understand how to match his systems of records with his systems of engagement. The chief supply chain officer might be looking to marrying supply chain data with sales systems. HR might be looking at customer information and trying to shape the workforce of tomorrow based on that information. This is the broader view and not just the nuts and bolts technology view.”

Other challenges that came to light were: proving a return on investment and how to fit new technologies into the day-to-day priorities that are expected of IT.

“The return on investment question is one that folks are exploring,” Ban says. “Many folks are seeking this answer.”

Those that can’t wait for an answer to be discovered concerning ROI are forging ahead. They are identified in the survey as “outperformers.” Ban explains the outperformers are significantly ahead of their peers in terms of enterprise profitability and revenue. A portion of these indicated that they could not afford to wait for ROI numbers to pencil out before implementing projects like mobile or social. You may have heard the phrase “implementing technology for the sake of technology.” That’s not the typical outperformer, Ban says. The outperformers are, like most other organizations, looking to solve certain business problems and using that as criteria to move forward. (Except they have bigger budgets to play with. These surveys, by the way, are skewed somewhat by the participation of mostly larger enterprises.)

CIOs in this survey also favor hiring outside service providers to handle the implementation of technology that requires skills not available in-house. This should be warmly welcomed by IBM, where the word services has been elevated to new heights. As the CIOs tell it, they would prefer a partner that understands how to solve business problems with technology as opposed to only understanding technology.

“I wouldn’t say companies are outsourcing everything,” Ban says. “They are being deliberate about where they go and who they work with for certain components while also considering what can be kept in-house. CIOs are helping to lead that conversation, but they are also actively working with the rest of the C-suite. This comes back to determining what is the return on investment and what is the art of the possible and making sure there are requirements and governance in place.”

Moving from the Back Office to the Front Lines–CIO insights from the Global C-suite Study is available for downloading at this link.

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