By now, everyone is feeling the effects of the shifting IT landscape. The conversation and mission of most senior IT executives had previously been about technology selection and delivery. Today there is a hyper focus on using technology and innovation to address and drive business outcomes. Major business megatrends—from novel ways of staffing the organization to the changing economics of production—are forcing CXOs to bring new ideas and perspectives about how they can drive business growth.
These tectonic shifts are reshaping the role of the CIO. As a pragmatic technology partner to IT enterprises, Dell Services wanted to better understand the evolving role of the CXO. To do this, Dell partnered with leading research and thought leaders. Over the past 18 months, Dell conducted research with Forbes Insights, the Economist Intelligence Unit (EIU), the Harvard Business Review and hosted executive events with Evanta and the Corporate Executive Board (CEB).
“70% of executives believe that the IT function will undergo radical change in the next three years.”
The research revealed that the C-suite does not have trouble seeing through the windshield. The EIU research found that 70% of executives believe that the IT function will undergo radical change in the next three years. This change has many implications for IT leaders and for each of their own roles and responsibilities. The change also raises more questions such as, “How will mobile computing, Bring Your Own Device (BYOD) and the Cloud affect IT services? How can the CXO use consumer trends to enable the business?” And more importantly, “Is IT becoming less of a builder of business technology infrastructure and more of a buyer of commoditized hardware and manager of outsourced services?”
C-suite seeing double
To the contrary, the C-suite wants the CXO to become more relevant to the business—much more relevant. 75 percent of executives surveyed said they would like their IT leader to play an active advisory role. Unfortunately, 46 percent of the C-suite does not believe the CIO understands the business strategy, and only 28 percent believe their CIO is performing better than his or her peers.
That’s a big expectation gap. Is it because BYOD, increasingly complex technologies and ever-growing security threats are requiring more resources to just keep the lights on? Or is it because no one told CIOs that the C-suite expects them to start wearing two hats: maintaining the same level of near-flawless IT infrastructure, and offering actionable innovation to solve major business problems.
“Organizations experience a 2:1 improvement in business performance when the CIO is involved in the business strategy.”
All businesses as tech companies
This is where CXOs have ample opportunities to exceed the C-suite’s expectations—and add value. Our research has shown that organizations experience a 2:1 improvement in business performance when the CIO is involved in the business strategy. As part of this new, more strategic role, however, IT leaders must develop better business acumen. This includes not only looking inside the organization, but also looking around the industry and assessing what competitors are doing—or not doing—and suggesting ways to achieve a competitive advantage. Netflix is a classic example of how business innovations that were essentially technology initiatives enabled the upstart to take down the industry-leading Blockbuster. Or imagine how IT needs to partner and collaborate with the CMO—not just provide infrastructure as a service—in utilizing Big Data analytics to grow sales.
“17 out of 20 C-suite executives are now choosing to focus on innovation over efficiency to drive results and ROI.”
Once the CXO has earned a seat on the strategic planning committee by both keeping the lights on and understanding the business needs, what’s next? It’s mostly about innovation—accelerating business value by unlocking IT innovation. For example, since the global financial crisis, most organizations have focused on efficiencies and cost-cutting to survive the downturn. However, that kind of strategy eventually plays itself out when there is nothing left to cut, or when you realize that ham-fisting staff reductions have hollowed out the organization. To grow, a business must innovate and invest. This no doubt explains why Dell’s research with Forbes Insights found that 17 out of 20 C-suite executives are now choosing to focus on innovation over efficiency to drive results and ROI.
Megatrend mind meld
According to the EIU, more than 60% C-suite executives see megatrends as opportunities for their organizations. These include the need for new ways to structure and staff organizations, such as the Hollywood Model mentioned on this site, evolving ways to fund business initiatives, and even a new kind of capitalism. In each and every area, technology leaders have opportunities to define their future role and make themselves strategic partners with the rest of the C-suite in driving growth.