FRAMINGHAM, 2 MARCH 2011 - Three factors have added up to a huge shift in the CIO role during the past five years-and CIOs who ignore these put their careers in peril, says a new report by Constellation Research.
First, consumer technology has out-innovated enterprise technologies, reducing the management influence of the CIO. Second, legacy systems implemented during the Y2K investment rush are hindering system upgrades. Finally, the pace of technology advancements has outpaced the ability to adopt.
CIOs of the future will no longer oversee multimillion dollar IT projects and lead organizational change through technology adoption, says Constellation Research CEO and analyst Ray Wang. Instead, the CIO definition will be broader, demanding that CIOs deliver more business value, profitability and market differentiation.
[For CIO magazine's latest research on the evolving CIO Role, see 2011 State of the CIO: IT Departments Are Fueling Company Growth Through Strategic Technology Investments]
While next-gen CIOs will emerge from traditional technology backgrounds as well as business-leader backgrounds with technology expertise, the report says, current CIOs will need to master four emerging personas in order to compete in the new environment.
CIOs who fail to evolve into these new roles, Wang says, will lose their functions to business teams. "Line of business executives are already starting to play CIO roles in many of the companies we work with," he says.
The new CIO role will balance externally focused activities with internally focused ones, and embody equal parts technology savvy and business savvy. Some CIOs may bring to the table expertise in one persona, but top CIOs will strive to master all four, he says.
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Here are the four new personas of the new CIO and the skills you need to succeed, according to the report.
1. Chief "Infrastructure" Officer
Many CIOs are already familiar with this persona, according to Wang, and transitioning into it will be easy. These chief infrastructure officers focus on cost reduction, controlling 65 percent to 70 percent of the overall budget. Most projects prioritize keeping the lights on and managing legacy systems. These infrastructure officers tend to focus on the technology side and internal-facing activities, according to the report.
Wang says that the chief infrastructure officer persona is becoming a core competency, but less and less attention is being paid to it.
2. Chief "Integration" Officer
Also predicted to be an easy transition, this persona is used to managing just 5 percent to 10 percent of the overall budget and must bring together various business processes, data, systems, legacy systems and newer cloud-based approaches. Chief integration officers tend to focus on both the technology side and internally and externally facing activities.
3. Chief "Intelligence" Officer
Chief intelligence officers manage 10 percent to 15 percent of the overall budget and strive to improve business user access to information, the report says. This persona tends to focus on the business side and internally facing activities, and strives to appropriately connect the right data to the right person at the right time on the right interface.
"As many of the infrastructure functions are being outsourced or handled in cloud environments, the persona of the chief intelligence officer is growing into one of the most essential," Wang says.
4. Chief "Innovation" Officer
Investing 5 percent to 10 percent of the overall budget, chief innovation officers must drive innovation on a shoestring, according to the report. This persona typically has a business background and "moves fast, fails fast and moves on."
"The chief innovation officer is probably the toughest persona that CIOs will have difficulty adopting," Wang says. "This requires a good understanding of the business strategy as well as keeping up to date with a large amount of disruptive technology. Often times, these technologies are not covered in the market and require early adopter teams."
As for core skills, Wang notes that next-generation CIOs will need the ability to:
1. Quickly assess which disruptive technologies show promise for their organizations.
Leading organizations will reinvest in research budgets and internal processes that inform, disseminate and prepare their organization for an increasing pace in technology adoption.
2. Design next-gen business models.
IT leaders must identify where these technologies can create differentiation through new business models, grow profit and deliver money-saving market efficiencies.
3. Fund innovation through legacy optimization.
IT budgets are expected to remain relatively flat through 2011. As a result, much of the disruptive technology and next-gen business models must be funded through optimizing existing investments.