NY, February 7, 2020.- First of all I will remember what a CIO is. Chief information officer (CIO), chief digital information officer (CDIO) or information technology (IT) director, is a job title commonly given to the most senior executive in an enterprise who works with information technology and computer systems, in order to support enterprise goals.
Typically, the CIO reports directly to the chief executive officer, but may also report to the chief operating officer or chief financial officer. In military organisations, the CIO reports to the commanding officer. The role of chief information officer was first defined in 1981 by William R. Synnott, former senior vice president of the Bank of Boston, and William H. Gruber, a former professor at the Massachusetts Institute of Technology Sloan School of Management. A CIO will sometimes serve as a member of the board of directors.
Recently, I have read in Forbes the most relevant priorities that CIOs face over the next few months. I invite you to read it carefully due to the technological tsunami that we are experiencing every day.
1. Accelerate your organization’s pace of innovation.
CIOs need to see the broad shift to cloud, including autonomous technologies, as freeing their IT organizations to spend more time and money on developing unique, customer-wowing, market-share-expanding, profit-generating products and services—and less time and money on system maintenance, tuning, security, and upgrades.
“For many, I think the cloud often is just an economic play,” says Gap’s Gilligan, one of Oracle’s CIOs of the Year for 2019. “Sure, there’s a lot of efficiency, a lot of flexibility to scale with the cloud. But for Gap particularly, we were after the faster iterative turns in our development of new capabilities. Our desire is to be able to bring new capabilities to our customers faster and continue to focus on where we believe we bring the innovation, but with partners that can help us create those environments to innovate.”
The reality is that for too many CIOs, innovation isn’t a top priority. When asked to rank their organization’s top 10 IT management issues, the 1,033 IT executives who responded last year to the Society for Information Management’s annual trends survey listed innovation at only ninth—and only tenth when asked to rank the issues that are personally most important/worrisome to them.
What ranked higher than innovation? Understandably, such pressing issues as information security and data analytics—two of the priorities on my short list. But also near the top of the SIM list are “aligning IT with the business” and IT “cost reduction/controls”—hardly strategic stuff.
In a smaller survey, of about 200 South African CIOs, 17% of respondents from the private sector and a whopping 39% from the public sector said they don’t have any time for innovation, as they’re way too busy just maintaining what they already have. It’s like an artist saying he/she doesn’t have any time for creativity. CIOs who don’t prioritize innovation are practically begging for their organizations to be outsourced to cheaper third parties.
2. If you’re not using data analytics to find new customers and expand business with existing ones, start—now.
Every CIO, in partnership with his/her chief marketing and revenue officers, needs to slice and dice the data to increase size of wallet and seize market share, especially as economic growth starts to slow.
One way to do that is to learn everything you can about the 20% to 30% of your customer base who are the most loyal, and then identify people in your database who exhibit similar characteristics—and pull them closer to the fold with the right marketing, noted Dawn Hudson, a former CMO of the NFL and a former CEO of Pepsi Cola North America, during her presentation at Oracle OpenWorld in September.
The NFL manages a database of about 95 million fans, drawn from ticket sales, NFL Network subscribers, social followers, fantasy leagues, individual teams, and other sources. One of the non-intuitive things the league discovered from that data: 48% of its fans are women, a base that happens to account for most of the NFL’s growth during the past 10 years. Women continue to present a huge marketing opportunity to grow the base, Hudson noted, especially because, the NFL found, they’re more inclined than men to bring together everyone in their immediate families to watch a game.
Data-informed personalization is key to turning casual fans into avid ones. The NFL created a template that made it relatively easy for its marketers to change the introduction to their emails depending on whether, say, the casual fan they’re targeting is apt to travel to an occasional game as part of a group gathering or is more interested in just getting stats to help with fantasy league selections. That simple change could double the open rate and engagement with such emails, Hudson said. “It’s a great way to grow your business, targeting those customers—just as you would your core people—in unique ways,” she said. “But every month you need to update that data to identify new customer trends and affinity groups.”
What non-intuitive things is your customer data telling you about how to grow the business?
3. Get deadly serious about digital disruption.
If you’re inclined to think that digital disruption threatens only retailers and taxi cab companies, reconsider that notion. As the lines between industries continue to blur amid the accelerating pace of technology and business change, no company is safe clinging to its existing products and business model.
Consider that some of the largest “technology” companies are aggressive players in the following businesses: retail, media and entertainment, travel, advertising, education, shipping and logistics, financial services, healthcare and genomics, video games, consumer electronics, transportation, energy, and home automation. And that’s just a subset. Even in sectors such as heavy manufacturing, “there is a recognition that now is the time to drive a step change in their business performance through transformation of products and services,” according to a report by Harvey Nash/KPMG, based on a global survey of 3,600 IT leaders.
Some 45% of those IT leaders say their companies expect to change their product/service offering or business model “in a fundamental way” in the next three years, whether it’s to offer existing products in new ways (via subscriptions, for instance) or to move into adjacent or wholly new sectors. The most forward-looking CIOs are tapping advanced data analytics to help inform and support their companies’ moves, developing “better sensory and analytical functions to continually adapt to the changing needs of their employees and customers,” the report says.
What’s particularly interesting is that these business model tweaks and transformations are “occurring just as much with smaller, younger organizations as with larger, older ones,” the Harvey Nash/KPMG report states, and “a sizable proportion are handling transformation within existing budgets without extra investment. As the average life expectancy of a company decreases, transformation is becoming business as usual as enterprises look to stay ahead of the game.”
4. Make sure you have a ‘second act’ planned for after your cloud migration.
Cloud infrastructure and applications are just the foundation upon which to build a truly secure, fast-moving, and innovative company.
Steven Chang, CIO of diversified Chinese property developer Kingold Group, thinks too many CIOs rush to cloud just for the short-term gains: the ability to move spending from fixed capital to ongoing operations, as well as the ability to get regular technology updates without a lot of heavy lifting. Both reasons are important, “but if you stop there, you’re still in the Jurassic Era of tech-driven transformation,” Chang says.
Act II for CIOs must be to truly capitalize on the opportunities that cloud computing unlocks.
Among the biggest is giving every company access to cutting-edge emerging tech, like built-in AI/machine learning, blockchain, Internet of Things, and other advanced technologies and features that come as part of cloud-based systems.
For example, one AI/machine learning feature embedded in Oracle HCM Cloud can help employers evaluate candidates responding to a job ad on social media. It works by analyzing data shared by each applicant—on his or her skills, work history, and interests—and then matching those patterns against data on the job requirements, the employer’s culture, and how recent hires with similar profiles are faring in their jobs. The goal: Help recruiters quickly identify, even rank, candidates most likely to fit in, stay, and ultimately perform at the company.
Says Chang: “Nowadays, everyone wants to see results, changes yesterday. How do you move that fast? You need black magic. What is the black magic of today? Cloud and the data-based innovations it allows.”
5. Automate to liberate (not to shed jobs and cut costs).
Most of the IT leaders who responded to the Harvey Nash/KPMG survey think that AI and automation will replace 10% to 20% of their company’s workforce within five years. But rather than see such technical innovations destroying more jobs than they create, two-thirds of those same IT leaders think AI and automation will be a net job creator, freeing employees “to engage in richer interactions with others and perform work that requires more brainpower,” according to the report. “The world is not short of problems to solve.”
I couldn’t agree more. CIOs—and all executives—need to start thinking of automation as a liberator of their people rather than as an executioner. For example, by freeing DBAs from system provisioning, tuning, patching, and other manual tasks, autonomous databases powered by machine learning (which I revisit below) allow those admins to step up into data science roles that are far more strategic and valuable to their companies. It’s a higher-paying and more-secure career path for those DBAs as well.
Yet the employment pessimists (and there are many) fail to envisage the many jobs still to emerge in coming generations of technological progress. By one estimate,at least 60% of the IT jobs that will exist in 2025 haven’t even been invented yet, thanks in large part to AI.For a historical parallel, when Bell Labs scientists invented the transistor in the 1940s, did anyone imagine the myriad products, services, vendors, and hundreds of millions of IT and related jobs it would create? No. Most people just viewed that invention in the context of the economic landscape they knew at the time.
AI and its machine learning cousin could very well become the transistor of the 21st century, the foundation for a range of new products, services, industries, and career paths that are inconceivable today. Meantime, let’s not underestimate the value of human presence, creativity, leadership, and flexibility. Intelligent, autonomous machines are much more likely to complement and extend human activity and decision-making, not replace them completely
6. To the extent possible, take human error out of the information security equation.
The good news is that the CIOs and IT executives surveyed by SIM cite security and privacy (more on the latter below) as their organization’s #1 IT management issue, as it has been for the past three years, as well as the #1 management issue “most important/worrisome” to them personally, as it has been for the past six years. At least there’s the understanding that there’s much more to do in this area. So what’s the path to CIOs getting a better night’s sleep?
Unless you work for a multinational bank, manufacturer, or other institution that has millions (even billions) of dollars to throw at security, most CIOs are better off offloading much of their security to cloud providers, for which security is a core competency, rather than try to manage it all in-house.
Cloud providers that offer autonomous database installation, update, and patching capabilities—powered by machine learning—have a leg up on competitors in helping prevent data theft against increasingly sophisticated attacks, as those capabilities all but eliminate human error.
In contrast, some cloud providers’ support policies put the onus on customers’ DBAs to correctly configure their databases and database servers. “For them, human error is inevitable,” said Edward Screven, Oracle’s chief corporate architect, at the company’s Cloud Day event in New York in January. “There’s one rule to prevent catastrophic data loss: Store your data in an autonomous database that does not require human labor, that does not allow the possibility of human error.”
7. Get a firm(er) handle on data privacy.
Companies and governments are tapping a range of modern technologies—everything from basic website cookies to sensors embedded in machines, devices, badges, and even body parts—to collect unprecedented amounts of data on their customers, as well as on employees and other constituents. Their objectives include gauging sentiment and preferences, improving performance, ferreting out fraud, tracking people’s whereabouts, monitoring health and safety, and anticipating people’s needs.
Most of that data gathering serves the greater good. But knowing where to draw the line is one of those “what keeps me up at night” issues for GAP CIO Gilligan, as it should be for every CIO, especially with new data privacy regulations taking hold in the EU, US (California in particular), Canada, and elsewhere. “It’s one thing to say that we’re doing more with data and trying to create positive experiences for the consumer,” she says. “But we also have to be incredibly aware of how we treat that data to respect people’s privacy.”
Among the factors every CIO should consider when collecting and analyzing data: Are you being transparent with people on what you’re doing with that data—the types you’re collecting and precisely how you plan to use it? Are you offering incentives to people to share more data? In certain cases, are you giving them the ability to opt in or opt out? Are you explaining to them the potential benefits? Where relevant, are you communicating which third parities will get access to that data? Are you being sensitive to local and generational cultural values? And, of course, are you up to speed on what it takes to comply with “right to be forgotten” and the myriad other tenets of key international, national, state, and local data privacy regulations?
It’s critical that CIOs consult with colleagues in other departments—legal, risk management, data security, various lines of business—in helping set company policy. To underscore just how pressing this issue has become, one technology startup that promises to “transform how enterprises protect and manage the privacy of personal data” has received a whopping $100 million in Series C financingin two rounds over just the last four months. More-established technology vendors and consulting firms have built their own data privacy platforms and practices. Yes, data privacy is now an industry sector unto itself.
8. When it comes to talent, resist thinking that ‘far is better.’
My late father used to poke fun at a neighbor who would trek to a bakery 30 miles away and to a butcher shop seven towns over because, the neighbor insisted, those establishments had a better selection or cut. Here she was, traveling to far-off places in search of better things for her family, when all that she was seeking was close by. “Far is better,” my Dad said of her exploits.
CIOs often have the same mindset when it comes to sourcing security, data analytics, AI, application architecture, and other hot skills. Instead of training, educating, developing, grooming, and incentivizing high achievers in their own organizations, they search far and wide elsewhere for superior beings. Of course, CIOs must recruit from the outside, especially for expertise honed from years of experience, but don’t underestimate the talented people you already have in-house.
One CIO who gets it is Akash Khurana, global vice president, CIO, and chief digital officer of McDermott International, a Houston-based engineering and construction company focused mainly on the energy industry. After joining McDermott five years ago to embark on a cloud-based digital transformation of the company, Khurana knew he needed to update his IT organization’s skill base.
The emphasis was on people with the chops to manage the transition of McDermott’s infrastructure and applications to the cloud, as well as those who could tighten up security processes and governance. Meanwhile, a thorough understanding of industry-specific platforms and processes was and continues to be a priority, he says.
Khurana, also one of Oracle’s CIOs of the Year for 2019, tapped into his and his colleagues’ talent pipelines and reached out to recruiters, “but first we fully assessed and leveraged our existing talent,” he says. “We also want to make sure that the talent we have is continually learning and growing. A lot of our people were placed in that new structure, with clear paths to ISO, NIST, and other certifications.”
Gap CIO Gilligan says the company’s cloud providers have proved to be “amazing partners” in helping train Gap’s engineers and other tech pros for the transition to software, infrastructure, and platform services.
“It’s not: ‘I’m replacing what your skill base was.’ It’s: ‘How do I modernize your skill base? And how do I make sure I’m investing in you so you continue?’” she says. “What we’ve found is the more you invest in your engineers, the more their productivity just continues to grow. Meanwhile, how do you train some people to manage a service provider? It’s a job shift in many cases, but that still requires just as much technical expertise.”
When it comes to finding tech talent, CIOs will find that near is often better, especially considering the high cost of recruiting, onboarding, and breaking in new people and the importance of cultivating an organizational culture that puts a priority on mapping out vibrant career paths for your people.
9. Turn a ‘shadow IT’ problem into a ‘business-managed IT’ strategy.
We’ve been hearing for a decade or longer that the CIO’s and IT organization’s enterprise standing is diminishing in the cloud era as technology decision-making and purchasing move into marketing, sales, HR, finance, and other digitally empowered departments.
But control and influence aren’t the same thing. At the best-run organizations, CIOs are “stepping up how they partner with the business,” according to the Harvey Nash/KPMG CIO survey, moving so-called shadow IT into a strategy of “business-managed IT.”
Almost two-thirds of organizations in the Harvey Nash/KPMG survey allow business-managed IT investment, and about 1 in 10 encourage it. “Business-managed IT requires a new relationship between business and IT, and those that get it right are much more likely to be significantly better than competitors in a whole host of factors, from customer experience to time to market,” the report states. “But getting it wrong opens up a back door to problems—organizations where the CIO is not directly involved in business-managed IT investment are twice as likely to have multiple security areas exposed.”
Some 66% of survey respondents said their role is indeed gaining influence, while their hiring and overall IT budgets continue to rise. The CIO as “chief influence officer,” anyone?
10. Take direct responsibility for aspects of the core business.
There’s no better way for CIOs to establish or reinforce their credibility across the business than to get directly involved in product development, inextricably linking the IT organization’s contributions to the company’s bottom line. One example I offered last year is that of Sherry Aaholm, CIO of Cummins, the Columbus, Indiana-based maker of engines and power-generation systems, who works very closely with the company’s CTO and engineering teams on product security, reliability, maintenance, uptime, and other digital improvements.
In addition, it’s not uncommon for versatile CIOs to have formal responsibilities outside their IT organizations, in areas such as innovation (see above), business process management/improvement, operations, procurement, and digital business services.
And Bask Iyer, VMware CIO and Chief Digital Transformation Officer, shares his top 10 CIO predictions for the next five years: