As established European businesses move to enhance their competitiveness the world over, they face a host of threats – including those from more digitally adept and agile rivals. To reclaim their edge, European CIOs must remake themselves and their organizations into true catalysts of digital transformation that transcend their traditional role of “cost container” or “chief problem-fixer.”
Earlier this year, we surveyed 289 European CIOs and IT leaders in the banking, retail, manufacturing and insurance industries to understand how their roles are evolving in today’s digital environment. Our results show that many assumptions about the CIO’s role are no longer true. Study respondents believe, in fact, that by 2020, their performance as CIO will be intricately tied to their digital value contribution and digital business outcomes.
To move toward this digitally defined future, CIOs need to understand and even determine what digital transformation should mean for their enterprise and then redefine themselves as a digital leader. Key study findings include:
European CIOs are up for the digital challenge, with two-thirds saying that digital success requires them to take a hands-on approach to translating the vast possibilities into tangible business results.
CIOs need to nurture strong partnerships with the C-suite. Nearly three-quarters of respondents named C-suite collaboration as a key to digital success.
Winning CIOs must also act as digital strategists (73%) and transformational leaders (74%), according to respondents. This requires developing the skills to identify digital opportunities, articulate the vision for digital change and mobilize the commitment to excel.
Digital leadership requires CIOs to understand and execute on next-gen IT (see Figure 1). Already, more than two-thirds of respondents embrace next-gen IT capabilities, such as the “uberization” of enterprise IT.
CIOs need to recruit, nurture and retain hard-to-find digital talent. Over two-thirds of respondents said a key element of success for digital transformation is the CIO’s ability to actively collaborate with talent acquisition teams to acquire needed skills.
European CIOs seem ready for the challenge of leading digital transformation; however, only one-third of respondents are currently involved with leading digital transformation. In other cases, the role goes to the CEO (23%) or another C-suite executive, such as the chief digital officer, chief marketing officer or chief financial officer.
To fully benefit from digital opportunity, we believe CIOs must transition away from a “service-oriented” role, to working alongside their fellow C-suiters, in a partnership position. CIOs must also resist the temptation to define themselves solely as “chief integration officers” and instead promote new approaches, such as robotic process automation (RPA). This technology can operate as a “workaround” to automate hand-offs and other disconnects within non-integrated processes.
We believe the CIO’s most valuable role today is to protect the business against disruption from technology companies infringing on their markets and offerings, and defining new forms of value that digital can enable. Such new forms of value include data monetization and new services based on enhancing products to be smart and connected.
Doing so will require skills that are very possibly new, or previously under-emphasized, for many CIOs, including political savvy, networking and social skills, as well as more familiar areas, such as working with cross-functional teams (see Figure 2). These shifts require proactive change led by CIOs prepared to assert themselves in new ways, while continuing to deliver on the traditional imperatives.
We recommend CIOs begin by moving toward the following:
Transform your approach to investment prioritization.
CIOs have traditionally used comprehensive frameworks to quantify all the value impacts of a large IT program. Rather than this monolithic approach, CIOs today should define and implement a “micro” IT solution or service, laser-focused on just the key features or functionalities that will produce the selected value improvements. Doing so can exponentially improve time to market and the cost/value ratio of IT investments.
Take a new approach to digital strategy and planning.
It’s also time to overhaul the classical concept of IT strategy development. With the quickened speed of change, and collapsing time horizons for business opportunities, organizations need to instead develop multiple, diverging long-term scenarios, defined as potential future states. To support this new approach, we recommend that companies engage in a strategic dialog using the Cognizant FutureMapping approach, to influence the pattern in the stream of actions, develop disruptive ploys, embrace a perspective and develop a position.
Use next-gen IT to protect against competitive attacks.
Next-gen IT can protect against disruption because it helps traditional companies transform from a monolithic approach to technology to an agile, adaptive one.
Drive multi-disciplinary teams around key business/digital themes.
Rather than working on a “demand” basis, IT should identify the most important business themes, and form multi-disciplinary teams or task forces to focus on these. CIOs should align these task forces with initiatives identified in the FutureMapping phase.
Become directly engaged and embedded in key digital initiatives.
CIOs should not only advise and influence decisions on which tools, technologies and standards are chosen, but they should also lead initiatives to develop new digital products and services, business models and the business innovation agenda.
Serve as the primary channel through which digital products and services are realized.
CIOs must play a central role in developing and commercializing these initiatives, even if they originate somewhere else in the organization.
The good news, as our study shows, is that many of these changes are already underway. Now it’s time for CIOs to take the next step — to fully commit to a new way of thinking and truly transform themselves for being digital in the new age of business.