IT leaders are facing enormous change, but there are many things to be thankful for and look forward to.
Such a bold proclamation seems a direct contradiction to many of the assertions associated to the rise of cloud computing. On-demand technology, goes the popular theory, will give businesses more flexibility about when to use and buy IT resources.
The hypothesis suggests increased flexibility will lead to the death knoll for the CIO, the c-suite executive who is responsible for making IT purchasing decisions. Take recent research from IT firm Getronics, which suggests as many as 17 per cent of finance chiefs believe the CIO role will have disappeared by 2017. Worse still, the survey reports 43 per cent of CFOs believe the technology leadership will inevitably merge with the top finance position.
But there is an alternative theory that suggests such beliefs are fanciful at best. Ian Cox, a CIO who recently left infrastructure specialist May Gurney after four years as IT director, says there is no doubt cloud computing has the potential to have a significant impact on the corporate technology landscape. But it is wrong to think such changes will lead to the demise of the IT leader.
“If anything, cloud computing is more likely to strengthen the CIO role,” says Cox. The business will still need an expert to make crucial decisions regarding the provisioning of internal and external IT resources, so the management of cloud services will be a key part of the CIO’s future portfolio. More importantly, on-demand technology offers IT leaders an opportunity to concentrate on real value-adding activities, such as strategy and innovation.
“Cloud offers CIOs the opportunity to reposition themselves within their organisations and increase their chances of expanding their influence and remit,” adds Cox.
“Back-office activities of IT moved to the cloud means the CIO can spend more talking with colleagues in terms of services and the value these can bring to the business. With the quick deployment and low set-up costs associated with the cloud, the CIO will be able to provision services in a way that demonstrates the real value of their role.”
The cloud, then, actually represents good news for the CIO. Rather than allocating 80 per cent of their time and budget to operational IT concerns, CIOs have the opportunity to think about how to embed the cloud as part a long-term business technology strategy that delivers innovation.
Steps in a strategic direction are already being made. Analyst firm Forrester Research recently discovered that 56 per cent of executives now rate the need to innovate as their biggest priority. The researcher says the results represent the first time innovation has been rated as more important than day-to-day operational concerns.
More is to come, with Forrester expecting the amount of time a CIO allocates to innovation to treble from five per cent to 15 per cent in the next few years. But driving creativity, especially the type of innovation that helps create new business opportunities, should not be taken as a given.
George Lawrie, an analyst at Forrester who spoke at a recent BT Engage IT event, suggests a number of technologies underlie the technology-based business transformation, such as business intelligence, mobility and social media. The cloud – as a means to offering resource flexibility and IT change – will become the standard, underpinning element for the future CIO.
“Using on-demand services allows IT leaders to release budget for innovation,” he says. “Going to the cloud in this manner also means CIOs must get business as usual under control. IT leaders must find a way to take the non-differential elements of technology and pass them successfully to a specialist external organisation.”
Lawrie says non-IT professionals do not always have a large amount of confidence in the technology organisation. So, before CIOs can start leading cloud-based innovation, they must ensure they have the confidence of fellow executive peers. In short, they must work to move the IT department from the role of a support organisation to a delivery specialist.
“What we need is a sense of maturity, where IT is less of a utility and more like a trusted business partner,” says Lawrie. “At that point, CIOs can really start delivering innovation on behalf of the business. Being an empowered CIO in the future will be all about communicating the business benefits of new IT.”
Technology chiefs with a bright future, then, will concentrate on building true business partnerships. But are the partnerships that will define digital success under threat from inside the boardroom? Could CFOs, as suggested by the Getronics research, really take responsibility for IT?
Karl Howarth, who attended a recent event to discuss the research, is unconvinced. Howarth is CFO at P&O Ferries and has taken additional responsibility for IT at the organisation. His experiences lead him to conclude that finance chiefs are taking an active role in IT decision making through need, rather than desire.
“CFOs are more involved because there’s been too many IT projects that have under-delivered in terms of timing and cost. The business is keen to get more flexibility and an ability to deliver projects quicker, because then fast-changing business priorities can be met easier.” he says.
“Success in IT is now all about understanding the various technologies and working with various experts to translate their potential into business value. That’s my issue at the moment; it’s not just about the present, it’s about what gives you the most freedom to make decisions in the future.”
Associated British Foods IS director Trevor Hanna was also at the Getronics event and is another executive who is unsure whether finance chiefs want to manage in-house IT. “How many CFOs really aspire to run IT?” he asks. “People coming through the ranks to manage IT are largely interested in technology. Are CFOs interested in technology? Do they have a problem with the service or do they feel innovation is missing? Managing IT is only right for certain people.”
Ultimately, in the majority of cases, the person best placed to take advantage of digital technology in an on-demand age will be the CIO. The requirements of the role will evolve but the strategic IT leader, who is able to take advantage of cloud services, will still be the executive responsible for technology management.
