Why digital disruption should propel CIOs into the boardroom
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Why digital disruption should propel CIOs into the boardroom

December 2014
The digitalization of business means the CIO’s skills should be the most sought after in the room – and yet most are still fighting for a place on the board. Head of IT for Microsoft EMEA Tim Hynes assesses the barriers and opportunities for IT leaders.

Speaking to senior IT executives, I’m hearing a consistent message: they’re committed to the business but they’re struggling to prove their relevance. And when I ask the other CXOs why IT doesn’t have a seat at the top table the answer is always ‘Because they don’t speak the business’s language.’

Non-IT CXOs say they only want to have business-value conversations. So in order to resonate with the C-suite, let alone gain a seat within it, the CIO must start talking in the context of IT’s value impact on the business in terms of market share and revenue or costs.

I’ve been in the industry for nearly 30 years and although this has been a constant theme it’s now more acute than ever due to the new challenges facing the C-suite. Furthermore, with the digital world moving ever faster the window of opportunity to take market share continues to shrink and companies are under more pressure than ever to keep pace.

But this need for speed can increasingly be best answered by digital means, so surely the IT organization should be more important than ever? There seems to be a disconnect between the business teams who need to transform their business quickly via digital technologies and the IT people who really understand those technologies.
Barriers to the boardroom

When I ask CIOs what they spend their time on their responses fall into three categories:

1. Line of business applications

The larger the enterprise, the longer these take to deliver – a two-year timeframe is not unusual. It's clear this doesn’t fit with the CXO’s need to move faster – assuming you can convince them to make the investment in the first place and then manage to deliver the application on time and on budget. This seriously impacts upon our reputation among non-IT business leaders.

2. Core infrastructure

This is important, but to the non-IT leader servers, storage and networks are like electricity and simply need to work. If you’re a CIO spending time talking to the CEO about core infrastructure, you’re wasting an opportunity.

3. Systems and hardware integration

Sometimes we IT people are too clever for our own good. We like to solve complex problems and, at times, introduce complexity where simple but faster and less risky would suffice. When we’re having that conversation with the CXO layer they just don’t understand why we want to complicate things.

I’d say most CIOs spend over 80% of their time on those three areas. By the time you’ve managed budgets and people, you’re at full capacity. And this is why the job we’re doing today as CIOs does not increase our relevance in driving the business forward. These three categories make up the traditional IT layer and the way we currently deliver them doesn’t create an opportunity for us to have a greater impact at CXO level. If this continues, we’ll struggle to get a place at the top table.
Opportunity for CIOs

CIOs need to align their priorities with the business strategy and clearly identify the value they’ll contribute to delivering on company-wide goals. For example, if a business has seen a lot of growth by acquisition, then part of IT’s value may be enabling fast integration of systems with minimal risk, and this is what the CIO needs to present to the other CXOs.

The real opportunity for CIOs lies in the digitization of things we already know how to do – such as moving platforms and servers to the cloud. CIOs who aren’t yet in the cloud often cite security concerns as a barrier, but if I were to audit those CIOs tomorrow, how many of them would have fully categorized data? If data security concerns are stopping us moving to the cloud, but we haven’t taken the time to categorize that data, whose fault is it that we can’t make the switch?

This is another frustration among the non-IT CXOs, so CIOs must prioritize data categorization and free up some time by using platform-as-a-service (PaaS) and software-as-a-service (SaaS) to simplify process. There are four layers of data to consider:

1. Structured data

If you haven’t categorized your data, you almost certainly don’t understand its structure. IT organizations tend to think about data per line of business – there's finance data, there's HR data, and so on, and subcategories within each of those. But if we look at data in such narrow pipes, what value can we draw from it?

There’s an opportunity for CIOs to start thinking about data in a different way and to look across the full landscape of data. We’re sitting on a significant asset and we should be the custodians of that data, able to put a valuation on it just like any other asset. Structured data is the best place to start this process.

2. Unstructured data

In my experience people don't think of unstructured data as data at all. Let’s take an example from the retail industry. In-store video is traditionally treated as an analogue asset, used for ‘stock loss prevention’ and watched after a crime has taken place. But if we add cloud technology and store that video in clusters, handling it like a digital asset, we can start to interrogate it properly and spot patterns that could help prevent stock loss from occurring. The data is already owned by the organization, but unless IT recognizes this ownership it can’t unlock the value.

3. Structured external data

Surveys have shown senior executives get much of the information they use to make decisions from outside of their organization. So if we’re struggling to unlock the value of internal data and we have nothing to do with the external data being used, we’ll really struggle to prove IT’s relevance.

But there’s an opportunity here to use the simple tools available to start interrogating the data. While IT may not always know the questions to ask, we should be providing the tools and platforms that allow people in the organization to ask them.

4. Unstructured external data

A good example of this kind of data is social media. Using traditional marketing and advertising, a new satellite digital services provider would have little chance of breaking into a small town where a well-known cable services provider has 90% market share. But if it could utilize social media data to aggregate information and identify when customers were experiencing problems with their existing provider, it could pitch directly to them online and identify the exact moment to run advertising for maximum effect.

Marketing applications are really speeding things up. Instead of taking two years to develop a new capability, CIOs should be able to deliver this within a matter of weeks – or at least to figure out the value that can be delivered within weeks and at each stage beyond that. This will allow us to be much more nimble, rather than investing heavily in a project only to find you're going in the wrong direction and realizing it’d be too costly to turn back. Currently, IT is not having these kinds of conversations because it’s trapped in the traditional IT layer.
IT as the enabler

Information analytics joins up all the types of data. But this isn’t just about data, software or algorithms. It’s about educating the business people and the IT staff so that the latter can provide a model that is as self-service as possible for every department to ask questions of its data. And the whole business would be able to move much faster as a result.

If this were the case IT could be seen as an enabler, rather than being accused of putting the ‘no’ in innovation – as the custodians of data rather than of servers, storage and networks.

To describe the choice that now faces the CIO I point to the decline of ice harvesting companies in the early 1900s – some went into building ice factories, others into the refrigerator business, and the rest went out of business. If we’re not willing to lead the move to the digitized world, when the world expects digital representation in services and products, then we won’t survive this evolution.

• Tim Hynes was speaking at IP Expo Europe in London.
First published December 2014
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