The CIO: an endangered species?

Jem Eskenazi is a CIO and proud of it, but expects the CIO role to disappear in approximately 15 years (which is, incidentally, when he will be retiring)….

If you are in the habit of keeping up with news about the role of the CIO in the pages of Computer Business Review or other IT publications, you must be quite familiar with the recent IBM report on "The New Voice of the CIO" and similar studies conducted by venerable technology companies, consultants or recruitment agencies.

These studies usually give the same messages: the role of the CIO is becoming less technical and more strategic; the CIO is a business person just like his or her peers; one should not differentiate between "business" and "IT" – in fact the chasm between business management and IT is slowly disappearing; increasingly CIOs have a Board seat; CIOs are taking on additional responsibilities as they have a global understanding of their businesses; CIOs are value creators and innovators, not simply cost reducers; etc., etc.

A dodo.

Bordering on extinction? The CIO role is either evolving or disappearing according to Jem Eskenazi.

These messages are all very welcome by CIOs. Most CIOs either believe the strategic importance of their role is already as described by these studies, or take heart when reading these opinions because they feel that things can only get better for them in their organisations. Having heard and read about this evolution of the CIO’s role for at least 15 years in scores of studies, articles, conferences and events, and despite having been a very vocal defender of these concepts in the past, I have recently started to develop serious doubts on the subject.

Don’t get me wrong: strategic thinking CIOs can have a significant impact on the competitiveness of their organisations, and judicious use of IT is essential for the success of any company. If I did not believe that, I would not be proud of the work that I do for my own company, or previous companies I was CIO of. And yet, I believe that as a community we have been too keen to blow our own trumpet instead of admitting that we are just business savvy supporters of others’ strategic initiatives. In this article I would like to argue that this "evolution" of the CIO is over-rated, and that in fact the future will see the disappearance of the CIO role.

My first concern is that the message has barely changed for at least a decade if not much longer. The strategic importance of IT and the evolving role of the CIO have been talked about so long, that today they sound like a mantra more than a real evolution. A web search on "evolving role of the CIO 1995" (or any other 90s year) took me down memory lane – many articles that I remembered reading (and believing), all saying roughly the same thing as the studies we read today. If there is indeed such an evolution, it seems to be as slow as the one Darwin described.

A more important concern is that the conclusions about CIOs’ evolution are usually reached by consulting CIOs’ views of their own role. This would be fine, if it were not that CEOs do not seem to share this view. A recent Forrester study showed that CEOs are by and large satisfied with IT, but had a very low opinion of IT’s contribution to business innovation and to process improvement.

Basically, CEOs were happy with IT because they had low expectations from IT, even when the CIO was given a Board seat. What is the reason for this discrepancy? Why have CIOs been hearing the same message for so long? Is the evolution slow but progressing, or is there something fundamentally wrong with the whole idea of the CIO role becoming increasingly strategic?

The education of the CEO It is an undeniable fact that as Information Technology evolved, it had a significant impact on the strategic competitiveness of innovative companies. The Data Centre Administrator became an IT Manager, then an IT Director or Vice President of IT, and often a Chief Information Officer, to reflect the importance of IT for the company. He or she had to come to terms with the strategic significance of IT platforms, and if not, was left behind at the lower levels of the IT organisation.

Despite the continuing message today about how the CIO has to think more strategically and less technically, at least in my experience I have not met a single CIO who does not already think of IT as a strategic contributor to the company’s goals. And yet, while we have heard about this transformation of the role countless times over the years, it must be said that the CEO has not, except perhaps when getting advice from a recruiter about how to define the role. When was the last time you heard about a conference on the changing role of the CIO, or improving the Business/IT gap, targeted towards not CIOs but CEOs?

How often do CEOs get advice about improving their relationships with their CIOs, or better applications of strategic IT for their businesses? CEOs get plenty of advice about Marketing, or distributions channels, or Production, or Finance – why is IT still not one of the core functions that the CEO feels directly responsible for?

The reason is that whereas Finance, Marketing, Production and the like are primary activities of most businesses, IT, as high an impact as it may have for the business, is a supporting function. It is, in fact, two things in one: Information Technology, and Information Management, neither of which is a primary business function. IT and IM "Technology is the name we have for stuff that doesn’t work yet" said Daniel Hillis, tongue in cheek, perhaps, but quite accurately.

We tend to think of IT as something new and quite different from everything else companies have adopted over centuries, but the reality is that organisations have been adopting various technologies since the beginning of time; and the adoption always went through a period of trial and error, success and failure, and the creation of specific roles in companies that helped with the adoption process. Sooner or later, as the technology stops being "technology" (i.e. it works without effort) and the adoption standards and best practices are understood by everyone; the special role disappears, and the technology just becomes a tool or a service that is simply procured.

A perfect example of this is the adoption of electricity in companies about a century ago. Specialist knowledge and strategic thinking was required for this new and exciting technology in every company; not only because what one could do with it was vast and unexplored, but also because often it had to be generated in-house, and that was a huge undertaking with significant capital outlays. Thus, a Vice President of Electricity, or a Director of Electricity was essential.

Today, electricity is just a service every company (with some exceptions such as industrial gas production sites) buys from an external party, and though vital, electricity is not considered a strategic activity of the company.

"Ah", will say the strategic thinking CIO, "my role is not about the technology, but the strategic management of information, so regardless of the evolution of the technology the role maintains its critical importance." Although this has been the accepted wisdom by CIOs for a long time, one must ask whether anything has changed about managing information within a company since the advent of IT. Yes, we have more information than ever before and it moves faster than ever before, and we need technology to manage it, but is it really true that a special role needs to be created to do the task? Is it not up to the COO, or the MD, or the CEO even, and various functional directors of the company to decide how information flows and is used in their organisation?

IT, as technology, is at best in its adolescence though it is not too hard to foresee its maturity, a world where one will be able to completely dissociate functionality from the underlying technology, where the management of information will not require technical understanding even if the information resides on complex technical platforms. In that world, will a CIO still be needed?

Strategic IT projects

It is quite interesting to note in the IBM study that the top ten priorities of CIOs are either technology issues (virtualisation, mobility, application harmonisation, SOA/web services, unified communications), or initiatives undoubtedly initiated or requested by the business (business intelligence and analytics, risk management and compliance, customer and partner collaboration, self-service portals, BPM). Not "opening up new distribution channels", or "optimising the supply chain", or "improving our product" or even "making our company more profitable". IBM’s report calls these ten priorities "visionary". I would argue, without at all putting down the contribution of the CIO, of the IT organisation, and of technology itself, that these priorities are not visionary, for the simple reason that the CIO’s role is to support the visionary initiatives of others in the organisation with judiciously selected technology platforms.

HP’s CEO Mark Hurd has recently indicated that bad IT most often means a bad CEO The corollary is not too difficult to argue – good IT means a good CEO, who would have to be among other things someone who does understand the basic relation between the company’s business processes and IT. The CEO is ultimately responsible for IT just as he or she is responsible for Finance, Marketing, HR, or any other function of the organisation; selects a CIO according to his or her understanding of strategic IT issues, and perhaps most importantly controls the overall budget allocation to IT.

Of course the CIO may introduce technologies that can offer better solutions that the business even knew existed to problems; for example when a new Business Intelligence platform is introduced. But does that make the CIO visionary any more than the Production Manager introducing new production techniques, or Marketing using newly established channels? It seems to me that calling such initiatives visionary is only a hold-out from the days the CIO was just a data centre manager, but the role is now at the same level as any officer of any importance in the company.

There are a multitude of opinions stating that innovation is essential for the successful CIO, that CIOs should know what their businesses need, understand what the strategic priorities of their companies are, etc. All of this is correct, of course, but all of this are also given facts for any senior manager of a company. These pieces of advice were necessary for the technical IT manager of the past, but anybody who is given the title Chief Information Officer clearly has this attitude already. I meet many CIOs, and I do not believe I have seen a single one who does not already have this kind of approach, though conversations always reveal that their success (or their frustration) is very much dependent on the CEO’s (or other executive management’s) attitude towards IT.

Successful IT management

If the real success of IT depends on the business’s approach to it (with the CIO’s business-like approach being a given), the most important thing a CIO can and should do is to try to improve the CEO’s knowledge and attitude towards technology matters because that is where IT success lies. This is an arduous task, as it has been in all of history when it comes to introducing new technology concepts to a conservative generation. In some cases, it works; in others it does not, despite the best efforts of a patient CIO. The executive management’s correct attitude is essential because all the measures of successful IT strictly depend on the non-IT players in the company, and these measures can be boiled down to two principle ones, as follows:

  1. Successfully implementing strategically important projects, which must always be business led projects. Even if the CIO comes up with the new idea say for improving logistics through the use of RFIDs, or reducing Claims fraud through integration to a fraud database, or real-time business decision through implementation of BAM, it is business units that need to embrace, sponsor, and lead these projects for them to be successful. Though CIO publications often cite CIOs as having implemented such projects, one will never read in mainstream business publications that these are competitive advantages delivered by the CIO; and for good reason, since these are business initiatives for which the business should rightfully take credit.
  2. Calculating the ROI on such projects, pre- and post-implementation, which must be again a business led activity. It is the logistics operation that will measure the benefits of the RFID system, the Claims operation that will measure reduced fraud, the COO or MD who will evaluate the returns from real-time decision making.

There are, of course, many stories about CIOs extending their responsibilities to other areas of the business; logistics, quite often, but also e-business, production, and the like, with a few CIOs even becoming CEO in their own companies. This is usually shown as the proof to the evolving role of the CIO, but this thinking is simply wrong. These CIOs are excellent business people and branch out to different or additional responsibilities, like any officer in the company can and often does. This is not a proof the CIO role evolving but proof that good business people can assume different roles. In fact, these cases may even be indications of the reduction in the importance of the CIO role.

The future of the CIO

We are at a turning point in the history of IT. SOA, web services, SaaS, the Cloud, and other standards and technologies are all playing an important role in abstracting information management from the underlying technology. At the same time, a new generation of executive management has a much better understanding of how IT can help their companies, and how the right information management approach is essential for their survival.

The convergence of these two events means that soon non-IT management will be able to specify and procure IT services without the help of a C-level expert, just like they procure electricity or logistics systems today. It will not be long before any type of application platform will be purchased and implemented, in the Cloud, through a simple configuration screen (think of how many you are already using this way), and not much longer before computer systems will understand business needs through an almost natural language interface. The CIO role will not evolve; it will revert to simpler times and will eventually disappear. A good CIO will seek and find other opportunities, for sure, as the best are already doing, just like any good business person does, but that is not the evolution of the CIO as a role but of the CIO as an individual.

This article first appeared in the print issue of CBR, February 2010. If you have an article that you believe may be suitable for the CBR Rolling Blog, please email your idea to sevans@industryreview.com.

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