From processing data in secluded rooms to earning a seat in the board room, the CIO has come a long way, says Vivek Khanna
During the last three decades the CIO’s role has continuously evolved from a technology manager to an enabler and now to visionary. IBM, in one of its studies, has appropriately remarked “CIO: Career is Over? That’s hopelessly out of date. Maybe a more modern version might be ‘CIO: Careering…Into Opportunities.”
In the first decade, which can perhaps be termed as the mainframe era, a CIO used to be a hard core technology person, sitting in AC rooms with his machines and team engaged in electronically processing data. Their area of operations were mainly related to repetitive data initially of HR department; later on, as things matured they started capturing accounts data. The objective and focus at that time was to bring accuracy and saving in human cost by removing the clerical jobs.
The role of the IT manager – precursor to the CIO – was predominantly that of an operational manager. With the dominant supplier dictating the pace and direction of application development and procurement strategy, the key task of the IT manger was to implement the new system within time and budget and thereafter to operate it. He needed to be a hard core technical person who could take care of his machines with other normal facets, such as good inter-personal relationships, communication skills, etc.
As the era evolved, more and more financial applications moved into the IT portfolio, including operation accounting. While the level of challenges and visibility of the IT team kept increasing, their head remained at middle-level management reporting to established functional heads, often the first application champions — the Finance or Operational Head.
In the next era, the computing machines came out of their secluded rooms on the desks of operations persons, bringing IT in the hands of users. Communication technologies with local and wide area networks and the new IT landscape of client/server computing brought the applications even closer to the users.
This was the era when package software in ERP (Enterprise Resource Planning) came out, covering almost all the requirements of back office and manufacturing departments — accounts, finance, sale, purchase, HR, store, manufacturing, quality, planning, etc. These software have given — and continue to give — a good return to the organizations in the form of efficiency, reduced cost, and improved and standardized processes, etc.
The CIO as enabler
The CIO used to require less knowledge on software development but more of its installation and availability. But with the knowledge of business processes, CIOs have become more effective as they are able to proactively identify the business requirements with the solutions backed by appropriate technology —making them as “enablers.” Later, outsourcing of data centers and network management further reduced the requirement of technical knowledge and a good number of successful CIOs came from line functions, mainly from finance and accounts.
Today, IT is more important than ever before, thanks to the digital economy wherein digital technologies have an impact on every aspect of business. New domains have changed the profile of the CIO. He now needs to come up with ideas as to how the current technologies can increase the organization’s topline and not just reduce the cost or improve productivity.
So the role of the CIO is evolving in all directions. To be really effective and successful, he needs to know every aspect of business as well, if not better than, as the domain leaders.
The reporting lines are also getting changed. In the old days, the majority of CIOs were reporting to the CFO as IT was treated as a cost center. This is changing fast and the CIO is now reporting directly to the CEO (around 42% as per IBM CIO Leadership Forum Survey 2006). This is also because IT is now quite pervasive and runs like the bloodstream through the organization. CIOs now spend more time with production and marketing functions, especially with marketing, helping them to create a new customer platform or sales model, thus reducing the proportion of their time with accounts to 50% or even less.
Organizations have started recognizing the CIO’s strength as the driver of change, with the capability to create new models for the market. They are increasingly being involved in all strategic discussions. Their deep knowledge of business processes, meticulous thinking and perfection in execution, has provided them a seat in the board room. Such organizations are often seen outdoing the competitors and coming out shining in the industry.
What the future holds
The future role of the CIO is even more wide-ranging, challenging and indispensable than the one that exists today. Dealing with the increase in power and influence within the organization, and the way it affects other C-level colleagues, will demand political skills of the highest order.
Managing and executing IT will remain important but the other skills which have already become part of the CIO’s job will put him in pole position in the race for senior appointments.
Their relationship and partner management skills, which they acquire by handling the complexities and challenges from outsourcing various IT activities, will come in handy in the future.
CIOs always had to be communicators, whether explaining technology in the old days to people who didn’t really understand or value it, or alerting colleagues about the business possibilities today. In the times to come, when the CIO will be helping to shape business strategies and drive innovation, communication as a skill will still be important.
They will certainly need a well-rooted technology skill set, but in addition, the expanding and evolving role will demand high levels of business skills. CIOs will need a complete understanding of business processes, as the role expands to include procurement and management of processes and the facilitation of innovation. They will need highly developed negotiating skills to support contracting with technology and service providers.
With all the above qualities, the CIO is in fact stepping into the spotlight, moving up from a supporting act to taking the leading role, a bigger role where he has the opportunity to showcase his entrepreneur skills. Yes, he is well qualified to take the role of the Chief Operating Officer or even the CEO.
I believe many of the CIOs have reached that stage and soon they will embark upon the next phase of their journey.
Vivek Khanna is Vice President – Finance & Information System, Havells India Limited.
