As information technology conquers the world and penetrates deeper and deeper into business processes, CIOs/CDOs/CDTOs play an exceedingly important role in the company - almost more important and prestigious than the CFO or marketing director. Breakthrough technologies cause a lot of excitement, as vendors are struggling to show the benefits of innovative solutions. It's no surprise that a CIO is often expected to work miracles - as an expert who knows all the nuances and can solve the most challenging issues. However, the bigger their authority, the greater their accountability. And it’s not always easy to find common ground in business issues. So, what does a modern CIO look like?
CIO: Big Upgrade Theory
We still remember well what the old-school CIOs of the 2000-2010s were like. As a rule, these were experts with tech degrees, and sometimes even without. If a person was savvy enough with hardware settings, proactive and diligent, they could easily become a system administrator, and later head an entire department. To be honest, it wasn’t much about WIIFM. CIOs were responsible for system administration, leading development teams, network and database administration, security, servers, computer workstations, office machinery – but were irrevocably subordinate.
The transformation of a CIO’s role that we’re witnessing is an inevitable and organic process. The explosive development of the IT industry is fueled by special attention from businesses and the government at the highest level. Digital transformation affects individual companies and corporations, as well as entire national economies. The IT department becomes the key driver of ongoing change, the guarantor of efficiency and continuity of business processes. It has ceased to be a mere supporting link in the chain and evolved to be the driving force of any mechanism. The new task of the CIO (and their later "reincarnations" – CDO, CDTO https://globalcio.ru/discussion/18720/) is to ensure the business’ operations, while responding flexibly to the challenges of the epoch, going at a fast pace of digitalization and fostering innovation.
This brings us to three reasons for CIO’s transition to a new round of development. The first reason lies in the high speed of change and the unprecedented technology sophistication. The second reason is the spread of revolutionary technologies and unconventional approaches to corporate information systems that can increase business productivity without significant financial and time costs. The third reason is companies turning to a client-centric model, when IT and automation make it possible to build communications with (both external and internal) customers and improve the quality of service.
The banking industry is traditionally the first one to respond to technological trends and embrace digital processes. In leading European and American banks, CIOs were spotted among top management, appeared on boards of directors, or occupied similar positions reflecting their high status as early as in 2014. In Russia, Uzbekistan and Kazakhstan, this trend materialized a few years later. Financial institutions were pioneers, and the rest followed.
“Between 2017 and 2020 almost all CIOs in Uzbekistan became deputy chairmen, company executives, or founded their own businesses,” says Abdulaziz Sattarov, Board member of UniversalBank (Uzbekistan), “That means, performers became managers. While earlier we didn’t give much thought to the economic efficiency of businesses, today efficient management, accelerated product release on the market and return on investment are our main priority. Market experts say the most high-profile and responsible position in company management is not the CEO, not the chairman of the board – it’s the CIO. This person has a lot of tasks on their plate. They require the highest level of professionalism and a deep understanding of the core of business.
CIO: then and now
The world is moving towards the model where traditional companies lose the race unless they accept the new digital "rules of the game" and redirect their resources to this area. In fact, technological companies are the only ones left in the market.
A modern CIO in such a technological company is no longer a jack-of-all-trades, but a business consultant and top executive who manages business processes, shapes the budget (that goes beyond IT), and is the main product developer. Their responsibility focus isn’t as much the technology segment as the new and most critical areas, such as information security, risk and data management. That’s why in addition to a tech degree this person often has an MBA up their sleeve. They know the competitive advantages of the company and use existing (or newly introduced) IT resources to quickly respond to changing market conditions. They put their efforts to optimize the company's costs and increase profits.
Today, the CIO has "strategic" voting rights. If earlier companies first developed a business strategy and used it as a basis to make decisions about IT development, now the IT strategy is the key. The overall strategy is constantly monitored and coordinated by the IT department.
Moreover, digital transformation and market trends can make the organizational structure of a company change significantly. “Following HSBC, UniversalBank launched a dedicated digital bank as an independent entity alongside the conventional bank. In that company all positions - lawyer, treasurer, project manager and others - were held by people with IT competencies. Today, this digital branch generates 80% of our net profit,” says Abdulaziz Sattarov.
Unlike a CIO from a few years ago, the modern CIO, knows business processes and creates them. Instead of striving to minimize risks and gravitating towards more conservative solutions and tried and trusted products, we see their willingness to try new things and take risks, their readiness to embrace new developments and different IT solution providers.
When things go wrong. Common CIO mistakes
Until now, the CIOs we described in our articles had everything going according to the plan: they have managed to build communications with the business (https://globalcio.ru/discussion/27180/) and win the trust of users. However, this is not always the case. It’s often true that in companies with more conservative management, CIOs cannot prove to their bosses the need to digitalize processes, introduce a particular product, or increase the IT department staffing. In this situation, blaming decision-makers for inertia and trying to resist them is probably not the most effective way of conflict resolving. What you should do instead is to assess the CEO’s stance and understand what to focus on during your next conversation with them.
“I created a few companies, and I am well aware of what the founders and the board want from the CIO. First of all, they want sales, profit in the short term and market share in the long term. Today it’s impossible to manage sales without digital technologies. We need to do what’s effective, and fast, then digitize it and increase profits. If the CIO knows what sales are and how they’re impacted by IT, it’s a huge trump card. That means, you should start with profit instead of expenses. It works a bit different in state-based institutions, where IT is expected to ensure stability and certain growth indicators,” says Abdulaziz Sattarov.
Another CIO scenario when dealing with a conservative boss is to wait and see. Sooner or later, business faces a choice: either to introduce new technologies or to lose the market. No matter how inert a large company may seem, the goal of survival will force it to move in the right direction.
However, the CIO can also make a few mistakes that will hamper them to build the right digitalization processes. First and foremost, it’s the inability to embrace the corporate culture and choose a suitable leadership style. Second is neglecting training and growth opportunities, underestimating people. To be successful, you must know what solutions there are in the market and what will work best for your company. Don’t forget that CIO works with people, not just technology. You need to build connections at all company levels - from top managers to end users of products that you implement - in order to understand their needs.
CIO of the future: business partners and culture champions
As surprisingly as it sounds, the drivers behind the rapid growth of a new generation of CIOs are instability and uncertainty. These factors are forcing companies to reimagine their IT strategies and increase investment in innovation. Digital technologies reduce the risks associated with instability: for example, cyber threats risks.
The next CIO generation will be focusing on such trends as Big Data and artificial intelligence, cloud services, mobility and IoT, information security. New functional CIO roles will become popular: Chief Digital Officer, Chief Data Officer, Chief Intelligence Officer, Chief Integration Officer, Chief IoT Officer. Of course, these are not completely new – we’ve heard about them back in the early 2010s, but today these leadership roles have powerful technology to rely on.
One of the CDO’s goals will be the data driven approach. This process has largely been launched, at least in Russia: by the fall of 2022, most large Russian companies have been using big data to optimize their business processes and executive decision-making (https://globalcio.ru/discussion/27562/).
We see the future of the CIO in this: as a business partner, the CIO will assist the CEO, take an active part in adding the company's commercial value, help increase bottom line profits, and improve business models.
As a startup mentor, the CIO can create a startup atmosphere within the company: to pass down knowledge, to experiment, to nurture innovative teams, and look for talents. A recent Global CIO study shows that 64% of IT leaders are ready to act as mentors and share their experience (https://globalcio.ru/discussion/22471/).
As an aggregator of services, technologies and data, the CIO will act as a binding force to draw a common action plan.
Finally, CIOs will be shaping the culture, primarily its corporate component. “In the old model, the chief accountant had to make their transactions strictly within the company perimeter. After the pandemic started, companies revised this rule and decided the chief accountant should also be able to work remotely. Another example, CIO jargon was perceived as something crude and cryptic. Now these words are somewhat fashionable, everybody speaks like that. That’s why, especially in the post-pandemic world, CIOs are responsible for the corporate culture and create it for their coworkers,” explains Abdulaziz Sattarov.
18 countries have unveiled the first international agreement on how to protect artificial intelligence from irresponsible players. It aims to develop AI solutions that are "inherently safe".
On November 30, the professional IT community GlobalCIO hosted a large-scaled international conference "Global CIO Insights: Digital Transformation with AI". During the event, leading experts shared their practical experience in launching projects utilizing artificial intelligence (AI) and highlighted approaches that helped elevate their companies to new heights.
Voting for projects participating in the "Project of the Year" contest is open. The voting began on December 1st and will continue until January 15th inclusive. The winners will be announced on February 7th, 2024.
Online sales is one of the areas where the quality of IT tools directly affects business profitability. Kamza Nugumanov, CIO of Jusan store, tells about the experience of deploying a rapidly growing Kazakh marketplace.