Gone are the days when CIOs just had to provide the technology infrastructure. Now they are expected to be a force for innovation as well. That means shaking off the traditional view of IT as a back-office function.
Facebook, Twitter, smartwatches and smartphones – the latest social, technology, and business trends are significantly influencing our private lives, businesses, and business leaders.
Though the consumerization of IT presents new challenges to CIOs, it also drives innovation: We expect the technology we use at work to be as advanced as the consumer technology we have at home.
The latest, and future, generation of workers are digital natives. The millennials – those born after 1982 – are digitally savvy, always online, and active on social media. Meeting their expectations presents new challenges to businesses and their IT departments.
More and more companies are investing in social media and collaboration platforms. They are also offering their workers a tailored selection of mobile devices, with smartphones and tablets becoming standard tools. Ideally, with a bring-your-own-device policy. Users expect systems and apps to be simple to use and elegantly designed, and to be able to deploy them with zero training. Who wants to download pages of training material along with an app?
We are also seeing a shift from ownership to access, such as car sharing. More and more of us don’t want to own a car but to have access to one wherever and whenever we need. Music is another example, where online streaming is eating into traditional music sales.
The Internet of Things and Services – physical and virtual worlds merge
CIOs, whose primary responsibility used to be the company’s internal IT, now find themselves having to deal with changes in society and entirely new technological requirements.
The Internet will connect us in far more ways in the future. We are moving from an internet of people and an internet of things to an internet of everything connecting things, people, and systems that exchange data autonomously. Gartner predicts that some 50 billion things will be connected by 2020. But what kinds of “things”? One example is intelligent clothing that monitors a stroke patient’s movements and triggers an emergency call transmitting the patient’s location and data. Connected cars will share information about accidents and congestion to help keep traffic flowing. Our cars will be able to connect parking garages to our bank accounts so we’ll no longer need to collect a ticket from the machine at the entrance or locate the pay station before we leave.
The physical and virtual worlds will merge in the Internet of Things and Services, opening up new opportunities for the manufacturing industry.
Smart factories will revolutionize production processes. Smart products can be uniquely identified, located at any time, and know their past and current condition, and alternative paths to their to-be condition. This will enable manufacturers to mass-produce individualized products. The blank, such as an empty bottle, knows what it should look like at the end of the production process, what liquid it will contain, when it will be dispatched, and to where. It finds its own way through the bottling plant, emerging at the end of the line as an individualized product. This is Industry 4.0. The integration of industrial manufacturing and IT systems is an exciting challenge for any CIO.
Staying relevant in the digital world
All these trends together mean new business models and new processes. They present a unique opportunity for CIOs to shape these changes and indeed to drive them.
To do so, they have to stop thinking of IT as a back-office function. The CIOs of the future will be more than just chief information officers; they will be chief integration officer and, significantly, chief innovation officer, driving the company’s strategy, innovation, and digitization.
Partner to the business
As the integration officer, the CIO has to be a full partner to the business. Studies predict that over 60% of IT decisions will be made by the business in the future. By being its partner, CIOs can demonstrate how they help the company succeed and that they are not merely a cost factor. They have to speak the language of the business to do so, though.
For instance, they can help the CFO close the quarter faster and more smoothly using in-memory technology. This is certainly a language CFOs will understand. Or they can work with the CMO on digitizing the company’s products, services, and channels. Every CMO wants apps that help them analyze Big Data from social media channels. Or they can help the field organization boost sales by providing more customer and sales data in real time on mobile devices.
The CIO as the agent of change
The next-generation CIO will have a much broader agenda and will work passionately and tirelessly with the business to advance it.
Industry 4.0, the merger of physical and virtual worlds, the Internet of Things and Services, and the consumerization of IT are the perfect catalysts for technological innovation. But they can also increase complexity. To translate digital business models to increased revenue and simpler processes, the CIO needs more time and money for innovation. This will require new digital operating models. In the future, it will be more about time to market, strategic competitive advantages, and greater agility, and less about cost. This is where consumption models come in. In the digital world, the consumption model is the cloud.
Greater flexibility and security in the cloud
CIOs and their IT organizations need to identify which emerging technologies to adopt and determine what these new technologies mean for their company’s business processes. Cloud computing has a dual role: It allows organizations to respond rapidly to changing requirements while creating space for them to innovate. The cloud helps companies adapt to new business needs and to turn ideas into innovations.
By transitioning from operational IT to a consumption model with a hybrid infrastructure, businesses can cut the cost of acquiring and maintaining IT and of keeping their systems secure. This allows them to focus on creating value through innovation and on gaining strategic competitive advantage. Two developments will turn CIOs into cloud service brokers: More and more cloud services will come onto the market, which CIOs will have to integrate; and they will have to modularize their systems and replace subprocesses with services. So the next generation of CIOs will not only be cloud brokers but also providers of cloud services.
CIOs who embrace the digital transformation and step up their skills will be able to lead the way in implementing innovative processes for their company.