When it comes to being digital, two equal and opposing forces are in play. On the one hand, digital promises to transform organizations into more personalized, relevant, real-time businesses that use social, mobile, analytics and cloud technologies to engage with customers in a more value-driven way. Along with the upside, however, come challenges, as organizations and employees must substantially change how they work, reconfigure their skill sets and even recast their work personalities. No one personifies this need for reinvention more than the CIO.
Not long ago, the CIO was tasked primarily with keeping IT humming. The business outlined its needs, and the CIO executed on them. That’s table stakes in today’s digital age. Now, CIOs must be influential, innovative and connected, capable of confidently collaborating with business leaders across functional silos to steer the organization on the digital path.
To understand this ongoing transformation, we surveyed 200 CIOs across the U.S. and in multiple industries. Our findings illuminate the new challenges many CIOs face, as well as the skills and work styles necessary to successfully cross the digital chasm. What we found: While CIOs are well-positioned to lead the digital program, they need to up their game in terms of cross-functional relationships, especially with the CEO and chief marketing officer (CMO), while adopting a leadership mindset toward identifying talent, inspiring and managing change, and enabling innovation.
CIOs Play a Crucial Role in Digital Transformation
First the good news: An overwhelming 89% of respondents said CIOs are critical to the success of the organization’s digital transformation. Further, CIOs are more apt to lead digital programs (34%) than the CEO (29%) or others in the C-suite.
But this pivotal role requires a new set of strengths and skills not traditionally associated with CIOs, such as the need to be socially and politically savvy, leadership oriented, innovative and willing to take risks (see Figure 1, below).
Ideal CIOs are also experienced with leading digital programs or a digital company (88%), possess cross-industry and business experience (78% and 82%, respectively) and have moved up through the ranks to their current position (79%). A core IT education (86%) is slightly more crucial than a business management education (82%), and certifications in technical and professional skills (78%) can be a plus, our study reveals.
Becoming a Digital Leader
A large majority (87%) of respondents believe successful digital CIOs are those who have adopted a transformative mindset rather than focusing merely on improving IT operations or even influencing business strategy with digital know-how. Respondents also emphasize the need to spend more time on cross-functional collaboration (85%) and aligning the digital strategy with business needs (84%). CIOs need to focus outside the four walls of the organization (82%) – working with customers, partners and suppliers – since digital is the glue that connects all constituencies across the business ecosystem.
Situated at the intersection of business and technology, CIOs are positioned to inform and drive “digital-first” strategies. To accomplish this, respondents said CIOs should seek to be a major contributor to the enterprise digital strategy (85%) and take time to study market trends and customer needs to identify digital opportunities (77%), in addition to finding, evaluating and deploying new digital technologies (82%).
All told, the successful digital CIO must function in multiple roles, including:
Chief talent officer, working closely with the human resources organization to bridge skills gaps (87%).
Chief influence officer, maintaining excellent working relationships with other business leaders (86%).
Change agent, transforming the culture to embrace digital approaches (82%).
Chief inclusion officer, promoting an open and innovative enterprise culture (82%).
Influencing Key Stakeholders
Because digital is an enterprise-wide effort, the CIO’s relationships with other business leaders are critical. In fact, over 80% of our respondents said success hinges on the ability to build and maintain relationships, as well as use these relationships to obtain buy-in and support for digital initiatives.
Of all these relationships, the most important is with the CEO (90%). In fact, a majority (63%) believe they’d be most successful if they reported directly to the CEO; little wonder, as in most cases, the CEO sponsors digital programs in the organization (42%) vs. the CIO (24%) or others in the C-suite.
Conversely, the lack of CEO support can pose a significant challenge, with many respondents believing they do not receive enough backing from the CEO and board of directors to deliver on digital’s promise (66% and 49% of respondents in banking and healthcare, respectively).
A close second to the CEO relationship is the importance of the partnership with the CMO (87%). This is critical given ongoing in-fighting between CIOs and CMOs at many companies for budget and strategic influence over the digital agenda. The need to collaborate is a matter of necessity; 83% of respondents indicated that a major portion of the funding for digital projects originates from marketing IT and CIO budgets. And since CIOs believe customer experience is largely shaped by digital technology (79%) and that marketing is increasingly becoming digital (85%), the two camps have a vested interested in collaboration.
For instance, while marketing often owns the digital customer experience, execution is typically the CIO’s responsibility (84%). As a result, a vast majority of respondents believe digital initiatives are strengthened by the joint participation of CIO and CMO teams (81%). Not surprisingly, winning CEOs promote collaboration between the CMO and CIO (77%).
Tips for Becoming a Digital CIO
To successfully steer their organizations throughout the digital journey, we recommend CIOs consider the following:
Become embedded in key digital initiatives, advising and serving as a key influencer or “center of excellence” for all things digital. Specify new tools, technologies and sources of talent, and suggest necessary business model and process changes.
Ensure the IT organization moves toward digital maturity, starting by tackling the legacy IT portfolio. The fail-fast digital credo must replace IT’s traditionally more cautious approach in order to inspire and support innovative approaches.
Establish IT as the primary channel through which digital products and services are realized. Play a central role in the development and commercialization of digital initiatives, regardless of where they originate in the organization. Seek ways to integrate meaningful shadow IT projects into the enterprise information architecture.
Be the change you wish to see. An enterprise-wide digital mentality will not happen on its own. CIOs need to become digital change agents and catalyze business transformation in order to evolve into true digital champions and trusted advisors to the CEO.
Note: This article is based on our recently published report “Being Digital: How and Why CIOS Are Reinventing Themselves for a New Age.”
Reshma Trenchil is a Senior Manager on Cognizant’s thought leadership team. She has 15-plus years of experience in business writing and research. Before joining Cognizant, she worked in equity research at UBS and thought leadership research at Deloitte. She has a master’s degree from Boston University and a bachelor’s degree from Stella Maris College. She can be reached at Reshma.Trenchil@cognizant.com.
This report is based on research conducted by Sanjay Fuloria, Senior Researcher within the Cognizant Research Center.