The rise of the chief information officer - A fantastic shift is occurring in IT Management
by Marco Tapia
October 8, 2015
The rise of the chief information officer
In July 2012 (3 years ago) I wrote the article below about the “fantastic shift occurring in IT Management. I reckon I was right on the mark!
I just read a new and similar article published in the Washington Post (edited below) which basically confirms and stress further the argument that CIOs are in high demand. However, it also explains why and what are the skills and characteristics that a modern CIO must have.
I share both articles below. Enjoy them.
A fantastic shift is occurring in IT Management
For a while, there had been predictions of the death of the internal IT department. Wrong! There had also been predictions about the death of the IT Manager and CIO. Wrong!
What is just occurring, in my view, is a fantastic shift, a shift from being a support function and a cost centre to a new function that can increase the company productivity and therefore profitability.
The shift is clear and evident. I can see it on my talks with many CIOs on a daily basis. Another element of this shift is that now IT is driving some business and industry changes and disrupting the way that complete industry sectors work. Some clear examples of this phenomenon is the impact on the retail sector by online shopping, the impact on the publishing and media sectors by web and mobile access and the impact on marketing and promotion by online marketing. Some of the most dramatic industry changes produced by these new and disruptive technologies are the changes in Fairfax and News Corporation.
The huge growth of IT service providers, infrastructure cloud offering and software as a service solutions have meant that now CIOs can really focus on improving a corporation’s productivity by utilising the best available IT, not by managing IT staff who’s skills become obsolete very quickly and therefore are in constant need of retraining.
New CIOs are those who are managing the fantastic shift. Those who have identified the vendors to partner with, who will provide him/her with the solutions needed, on the cloud, fast and efficiently.
Who today buys and installs an in-house email spam filtering system? You have got to be kidding! No one. Today, you just go and buy the service from a number of available SaaS providers who have mastered this solution. If you feel the solution becoming expensive, you change it. If you feel the solution has become ineffective and there is a better one in the market, you change it again.
Furthermore, who today considers building or installing an in-house document management system or a CRM solution? These are a small sample of solutions readily available and widely used as a service.
Who today considers having an internal team of software developers, when they are readily available from IT services firms?
Who today won’t consider hosting your datacentre at a hosting company, or going further – who today won’t consider the public cloud offerings to host some or most of your apps?
Who today doesn’t use Gmail, Dropbox, Web Apps, iPad Apps, iPhone Apps, and Android apps to name a few?
So, as Mark Twain once said “the report of my death was an exaggeration”, the death of the IT department and CIO was just that, an exaggeration. Instead, the roles have changed and shifted to a strategic one, where vendors and solutions are managed, policies and procedures are established and policed and most importantly, where a focus on productivity has taken first place.
The IT department and its CIO are shifting to a complex role of managing a plethora of vendors and complex solutions provided best by the market and establishing fast, efficient and effective relationships with business and providers.
Your IT department can no longer have technical people who have been in their roles for 10, 20 or more years. You need to replace them with vendor provided skills. They are hindering your productivity (your department and your company’s). They are always too busy and hold skills that are obsolete most of time. Your vendors have people with recent skills, certifications and a broad range of experiences at many companies. Technical roles are now indistinguishable between companies. Most of them perform routine maintenance roles that can be better provided by vendors.
What you need are KRM (Key Relationship Managers), Business Analysts and (sometimes) Project Managers. They must understand the business, your products and core offering. They must be expert vendor managers (able to build strong relationships with vendors not through ‘Procurement’ because they do not understand complex technical offerings) and able to understand how changes in technology affect the business.
These managers need to be able to implement solutions suitable to their business, fast, efficiently and with the main objective of improving the company’s productivity.
As the Nobel Prize-winning economist Paul Krugman said, Productivity isn’t everything, but in the long run it’s nearly everything
The rise of the chief information officer
THE WASHINGTON POST
By Hayley Tsukayama September 22 2015 For many people, mention of the IT department still conjures images of dark cubicles and Dilbert comic strips, a place staffed with mysterious geeks who feel much more at home with gadgetry than people. But as the importance of technical knowledge becomes more integral to everyday business operations, something is changing. The role of the “IT nerd” is becoming less—well—nerdy.
Particularly for top technology positions, like that of chief information officer, the profile is starting to shift. Companies are hiring for the skills of a strategist, marketer and brainstormer as much as, if not more than, a tech wiz. And that’s reshaping the power dynamic, and salary structure, in executive suites across corporate America.
“There is absolutely an evolution taking place with CIOs,” said Tina Nunno, a Gartner analyst who recently penned a book on what chief information officers need to succeed.
Traditionally, the CIO has been focused internally, Nunno said, on the tech needs of staff throughout the company. The joke used to be that CIO stood for “Career Is Over.” Now, with technology underlying so much of how businesses interact with consumers, the CIO is becoming a key adviser on the company’s external strategy.
“I tend to think of it as a transition from service provider to true partner in leadership,” she said.
The rise of the CIO coincides with several other trends in the business world over the past few years, and the growing importance of technology. Issues such as cybersecurity, running a business on mobile devices and social media branding now affect every industry. And many major future problems that companies face are tech challenges.
“All of a sudden, because of all these new devices, there are these new ways of working,” said Aaron Levie, chief executive officer of the cloud service Box.“The CIO is in the central role for deciding and designing the core technology strategy for the company. It has much more of a business mindset to it now, as opposed to a technology mindset.”
The shift is being reflected, in some part, in CIO pay checks as well. On the whole, the salaries for executive technology positions are on the rise, as the latest annual report from Robert Half Technology shows. Chief information officers are the highest paid among them, with an average salary between US$157,000 and US$262,500. That’s at least a 40 percent increase over the past five years—more than salaries have increased for CEOs or CFOs, the firm said.
With that rise, however, comes the requirement for a different set of skills, said Chris Brinkman, regional vice president of Robert Half.
“The questions of old when we used to interview CIOs were very technical: Talk to me about hands-on IT experience, how big was the department you managed, talk to me about up time and system availability—things like that,” Brinkman said. Now, he said, the questions are about how technology initiatives they’ve implemented drive revenue and cut costs. Or how they’ve transformed their companies through mobility, cloud service and big data.
Finding candidates who can fill the role of this new type of CIO, Brinkman said, is difficult. But those who are qualified are in very high demand: The unemployment rate for those who are either seeking or have held CIO roles is just 1.7 percent.
“It’s definitely a candidate’s market right now,” Brinkman said.
Zack Hicks, CIO for Toyota’s North American Operations said that his daily duties have changed drastically over the past five years. Today, he said, he’s tasked with thinking about how to get ahead of trends and problems, rather than purely reacting to issues as they come up within the company.
For example, Hicks and his team were key in developing and improving an application called “Dealer Daily,” which makes it easier for salespeople to handle paperwork from the showroom floor. He’s also thinking about the best ways Toyota can get ahead of the connected cars trend, examining not only how to navigate traffic, he said, but also brainstorming ways to make cars more of a consumer technology product by syncing up with relevant health data or other habits.
Other CIOs find themselves working even more closely with consumers. At Stanford, Health Care CIO Pravene Nath has focused on making medical appsthat are as easy to use as any commercial app and give patients more control over their care, yet still protect patient information. The senior vice president of IT for Barneys, Abu Bakar, has infused the old-line luxury retailer with a digital mindset as well. He’s created stylish apps for consumers, while also arming employees with tablets that let them access shoppers’ online profiles to personalize a store visit.
Nunno, the Gartner analyst, said that not every company is always comfortable with seeing CIOs shift from “the guy who solved all our tech problems” to the one who’s co-leading the next marketing campaign. Good modern CIOs need to develop management and business skills, and become well-versed in proving their ideas are good for everyone at the company—and for the bottom line.
“Of course companies want a tech advantage,” she said. “But you have to be able to say: ‘Here’s this emerging technology, we need to start experimenting. It will make you uncomfortable, but if you try it can make us healthier and more profitable.”
Companies that have a strong working relationship between their CIOs, CEOs and CFOs tend to outperform their peers on important metrics such as profit and revenue, said Linda Ban, who directs a regular study from IBM that examines relationships in the C-suite. In general, Ban said, chief executives are relying more on a wider bench of top advisers, and the CIO is often at the lead of that pack because of the way technology has transformed so many businesses.
“Frankly, I think many organizations got a wakeup call…back in 2006 and 2007 when iTunes became a really big thing,” Ban said. “That is what really made a lot of organizations sit up and take notice. Who would have anticipated that a hardware manufacturer could have dramatically changed the music business?”
As companies better anticipate these shifts, they are changing their recruiting strategies for lower-level positions as well as executive ones. A LinkedIn report in August showed that liberal arts graduates are pouring into the tech field at a faster rate than technology majors—and not only in non-technical roles. In a survey of its own data, LinkedIn determined that software developer, project manager and IT support specialist were all in the top ten list of technology jobs that liberal arts majors get right out of college.
Hicks said that he’s definitely changing the criteria he uses when hiring at Toyota. He is increasingly interested in finding people who are not only technologically skilled, but who are able to identify and communicate ways to stay ahead of the curve. That means, in many cases, looking to fill tech positions with more and more candidates who have an MBA.
“We want them to go deep on a technology—we’re always looking for data scientists and security experts,” Hicks said. “But the differentiator is finding people who understand the context of what they’re doing.”
About The authors
Managing Director, PicNet Pty Ltd. Marco has 30 years’ experience as Company Director, CIO, Business Technology Consultant and IT Project Manager, managing large and medium size IT functions for national and international corporations. He holds an MBA from the University of NSW, a BSc (Electronics), a Diploma in Systems Analysis and is a member of the Australian Institute of Company Directors.