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The CIO of Tomorrow: Jockey, Traffic Cop or Outsourcer-in-Chief?

Innovation Executive Forum | Posted on November 29, 2017 by Erika Van Noort

In the past, we thought of IT as two broad categories: software development and infrastructure.

Today, our thinking is a little different.

Technology rolls out to users across the organization faster than ever. Every line of business thinks they understand it. Corporate finance and senior management expect more value from it. Meanwhile, the news warns of new threats to its integrity every day.

More than keeping the lights on, the modern IT department has the mandate to find technology solutions to business problems. In turn, the role of the IT executive has become a balancing act between driving revenue growth, reducing costs and safeguarding data.

At our latest IEF dinner, we spoke with IT leaders in New York about how they see their role in harnessing technology to support business outcomes.

We explore some of their key insights in the article below.

How to Tell the Organization, “Curb Your Enthusiasm”

The IT department once comprised a central group of developers, technicians and service desk personnel. Now, technology permeates every aspect of the business.

Other areas of the business once came to IT to request new tools and services. Now, they can download free or limited trial versions and get training from online sources like YouTube.

The result is a technology growth situation that can spiral out of control fast.

One IEF member likened the role to that of a traffic cop. “Technology’s moving so fast, that one solution comes to the table and somebody else has got something else there.” If the CIO doesn’t step in, these systems pile up and create chaos.

As one attendee put it, “We let them run free.” Failing to contain this enthusiasm for technology lowers efficiency and weakens ROI position. “What they do is create crazy systems that can’t be maintained. They don’t scale, they cause problems.” In the end, the member explained, these users “don’t get the value they want.”

In some cases, the unchecked growth of free-to-play technology also creates security concerns. As another attendee pointed out, users often don’t “think about things like Google Translate and Grammarly. They’re not thinking about the data that they’re now sending out into that cloud service.” From a data loss perspective, information that spends even thirty minutes on a public cloud service could put the business at risk.

Nonetheless, the members agreed that serving as “traffic cop” should never impede the business. As one attendee declared, “We have to come to you with a better solution than ‘stop what you’re doing.’ We don’t want to disrupt business, but we figure this out and make it better.” Another added:

“We don’t want to be the ‘no’ in innovation.”

Another member predicted the role of the IT executive will become part jockey, part breeder. IT executives will have to steer the enthusiasm in productive directions that drive value for the business. “It’s a matter of the CIO having to harness everybody.” He added:

“Wild horses may run faster, but they rarely cross the finish line.”

The role of “traffic cop” can become a concern when security gets in the way of employee productivity. As one IEF member representing a law firm illustrated, “It’s like the window’s open so you have to slam it closed. Then everybody’s like, ‘now my job’s so much harder.’” In response, his firm adopted the practice of delivering public service announcements on security issues affecting work data and personal information.

“We’re not talking about work’s passwords, we’re talking about your passwords, so all of a sudden, we’re your best friend.”

FURTHER READING: Why Technological Adoption Doesn’t Equal Digital Transformation (Forbes)

Mastering the Carrot and the Stick

Some IT executives come up against the opposite: Users who can’t or won’t come along on the journey.

Often, the solution goes beyond training to demonstrating the value of a new tool or service on a personal level. One IEF member learned their lesson after introducing a new voice conferencing system.

“We went from a pretty straightforward system to a much more modern service. You would’ve thought I’d opened up the door and kicked everybody’s cat.”

The member went on to explain that the project taught him some important things about change management, message delivery and setting expectations. “If I had just told them ‘hey, this works exactly like the old service does,’ I probably would’ve been just fine. That in a way is a microcosm of some of the larger IT projects that we’re doing.”

The attendees also touched on the generational change in the workforce and the attendant shift in expectations. Perhaps surprising is the observation that resistance to new tools and systems isn’t just a symptom of older generations. One IEF member declared, “I work with nothing but millennials. What’s fascinating about them is they’re sort of resistant to change unless you show them.”

Workers younger than thirty-five can be just as slow as their older counterparts to adopt more powerful, business-oriented alternatives to the familiar technologies they grew up with. As one attendee whose firm still uses Gmail observed, “A lot of these kids they’ve never used anything else. They don’t know there’s anything better out there.”

Further challenges emerge when the one resisting change has the ultimate say in the organization. A substantial part of the IT executive’s mandate is articulating the value of IT to CEOs. Another is educating these chief executives on the risks and rewards of technology investments.

It isn’t always easy.

“How can you educate CEOs better to really understand technology? Because they think after five months of hearing about this device and server or whatever and they’ve had enough, right?” asked one attendee. Sometimes the issue is a matter of not trusting the messenger when it comes to directing the organization’s investment in technology.

“Hearing it from internal, it sounds like you’re going around looking for money for yourself. When somebody else says it, it comes out a little bit different.”

Our panel agreed that the challenge in educating CEOs is fiercest around cybersecurity. As Erika Van Noort explained, in the wake of a newsworthy security incident, “Everyone’s walking around going, ‘Thank God we didn’t get hit.’ But, nobody makes the connection back to the investments and all the nights that all of you lie awake at night.”

The best response is to maintain a solid understanding of where the business needs to go. Then, maintain and update technology plans in accordance. A significant part of the CIO role is understanding how to sell a budget based on compelling cost versus ROI for the business.

“They’re going to hold you accountable for whatever that net difference is, so it’s easier to quantify in terms of the outcome or risk mitigation.”

FURTHER READING: Why Do We Resist Technology in the Workplace (Forbes)?

Technology and Talent: In or Out?

Technology no longer has one principal “home” within the organization. Instead, it plays a critical role in enabling valuable outcomes across every facet of the business. As a result, IT executives dedicate more time to these strategic drivers and less to “traditional” IT functions.

Our IEF members in New York saw this phenomenon causing a tremendous shift in their roles. It also raised the questions, “What do we consider core? What’s something we need to be focused on versus not?” One member representing the legal services sector observed the biggest transformation of the CIO’s realm may be in strategic outsourcing.

“And, it’s not the ‘Let’s take all our help desk and move them to Manila,’ or that kind of thing. It’s ‘I just had a full-time position leave.’”

The member used the example of losing an application package person. “I can bring in an organization that has experience in application packaging SCCM integration, a whole slew of things. For the cost of that one full-time position, I can bring in a breadth of experience that covers five positions.”

This time and materials approach to technology represents a significant shift from managing a person to managing an entity. This, in turn, comes with a new set of expectations and SLAs. Nonetheless, many in attendance conceded this kind of managed service would become the norm.

Another member wasn’t convinced. On one hand, he estimated “that 90% of businesses outsource 80% of their technology to an outsourcing firm.” However, he explained, the managed services approach can also have the effect of stifling novel ideas.

“You can’t innovate that way because they don’t know the business that they’re operating on a requirements-delivery kind of model.”

He saw organizations “in-sourcing” tech-capable teams with the skills to deliver on departmental needs while also possessing the skills needed to innovate. He made a comparison to the automotive industry, where leading players have reversed much of their outsourcing in the last several years.

“You need a younger talent pool in the US and it’s not outsourced. They can do all of the things that are right now happening in the technology industry.” As the next generation joins the workforce, bringing this talent back in-house may have key advantages that a managed service cannot provide.

“Bringing back that aspect of innovation, I mean that’s been long coming.”

In this scenario, the fast-growing “gig” economy will also have a tremendous disruptive impact. As host Erika Van Noort from Softchoice explained, thirty-percent of people are no longer interested in full-time positions. When a third or more of the labor market prefers to work on a project-to-project basis, retaining top technical talent will prove more difficult. The big question, she explained, is “How does your business make it so that those people are interested in actually working with us?”

FURTHER READING: How the Gig Economy is Changing Enterprise IT (CIO)

Last Thoughts

Wrapping up our IEF event in New York, we gleaned some key observations about the role of the CIO in controlling the growth and direction of technology in the organization.

Here are some of their key thoughts:

  • IT has a responsibility to control the influx of tools and services without impeding the business
  • Putting too much emphasis on risk can stifle innovation
  • Bringing everyone along on a digital journey calls for equal parts education and persuasion
  • IT leaders face new challenges in retaining the people needed to support innovation long-term

 

Ready to join the discussion? #CIOTableTalk

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