The changing face and purchasing power of the CIO

Clare Hopping

Wednesday 14 January 2015

The emergence of transformational technologies such as the cloud and mobile, combined with the growth of BYOD policies, mean that the CIO and IT department’s procurement role is changing.

Traditionally, the CIO rolled out new processes and held the IT purse strings. They were a decision maker for hardware and software purchases; the leader of implementation, maintenance and security, taking care of an organisation’s data centre and addressing change and transformation.

A convergence of mobile, social, big data and cloud

In its CIO Agenda Predictions for 2015, IDC states that mobile, social, big data and cloud services are merging to become a ‘3rd Platform’ that needs different treatment by the IT department in order to be innovative and eliminate security risks.

Fred Magee, adjunct research advisor with IDC’s Research Network, explains: “IDC believes there are clear indicators that the existing role of technology management will evolve in a few short years to a set of roles that includes management of innovation, information intelligence, customer experience, and digital business presence.”

Michael Rosen, a fellow adjunct research advisor with IDC’s Research Network, continues: “The transformations brought about by the 3rd Platform are having significant effects on how the business uses IT, how IT is delivered, and how the IT organisation is structured. Insightful CIOs will seize the opportunity to be key players in this transformation and elevate their role in the enterprise.”

Oracle, meanwhile, believes the CIO’s primary concern should be data as an asset in companies. Tom Fisher, senior vice president and global commercial CIO at Oracle, elaborates: “CIOs have the opportunity to transform themselves from keeper of the technology into a true Chief of Information, now managing data as a company asset, just as the CFO manages company finances. To do that, the CIO not only has to understand where the data is and which provider is responsible for it, but also how the individual business units can use that data.

“The business knowledge required to drive mission critical processes, the market knowledge required to capture emerging opportunities and the technical knowledge required to bring those elements together all drastically change – and elevate – the job of the person occupying the CIO seat.”

New responsibilities

On top of the new technological responsibilities requiring CIOs to be more innovative, Peter Bendor-Samuel, CEO of Everest Group believes the CIO is increasingly being tasked with a more tactical mandate, for example, as well as cutting costs and increasing compliance and security.

This will lead to power shifting from the CIO, at the centre of technological control, outwards, encompassing other leaders too: “Over time we could see islands of automation spring up that need central coordination. That’s what happened in the distributed computing wave and resulted in CIOs re-establishing influence. Without competent CIO involvement, companies run a greater risk of running afoul of compliance issues and being exposed to security risks.”

Spending shift

This shift towards more innovative technologies, and in the CIO’s central role, will lead to a change in how budgets, particularly costs regarding technology, will be spent, with IT controlling business-as-usual costs, but other figureheads spending for projects that play a key part in transforming the business and taking it into the future – such as the mobile, social, big data and cloud services that IDC refers to in its CIO report.

“Stakeholders, including the CMO, are taking on increasing influence for transformational projects and often control the funding for these projects. As a result, they’re reducing the influence of the CIO on business-related functionality,” says Bendor-Samuel.

The IT spend related to new business functionality and a transformational agenda is increasingly centred in the business lines or functional heads, such as the CMO and HR Director.

Increasingly, the CFO is emerging as the chief sponsor of business transformation. Many of these initiatives utilise cloud or as-a-service business models, making these non-IT stakeholders more influential in cloud purchases.

How should CIOs play to their advantage?

Although CIOs may be a little deflated at this shift of power and spending, Bendor-Samuel says CIOs should adopt a “join them not block them” posture.

“The current forces driving this trend are too powerful to block. CIOs should seek to engage the other stakeholder groups and support them, rather than attempt to dictate to them – unless, of course, it concerns issues of compliance or security.”