Gartner reveals that a massive 50% of CEOs feel frustrated because the IT department isn't delivering what it should, yet only 10% of CIOs recognise that they have a problem in executing their tasks. To circumvent that gap - which most CIOs haven't even acknowledged - new jobs are being created in many companies specifically to guide them into the digital economy where the bosses know the future lies.
Gartner expects the number of chief digital officers (CDOs) to triple in the next 12 months, and these digital specialists will probably report to the marketing department, not the IT department.
"Technology has the attention of the CEO and the boards, but as technology leaders, we may be losing their trust. We have a crisis in IT leadership," says Gartner's global head of research, Peter Sondergaard.
To remain relevant in this increasingly digital economy, the IT department must co-ordinate all the information a company has across the organisation, not just handle traditional back-office functions. It should also take responsibility for developing digital leadership skills.
Digitisation
That will make the role of the CIO far broader and with recast priorities, Sondergaard told the Gartner Symposium in Cape Town. CIOs who don't position themselves to be the prime candidate as the new digital champion will see their roles diminish.
That means responding to the confluence of cloud services, social media, big data and the consumerisation of IT, which are all merging to change the way companies should operate.
"No matter what products or services you deliver today, digitisation will change it," Sondergaard says. "That means new opportunities for you, and better engagement with your constituents."
Carl Scholtz, CEO at Extraordinary Minds Consulting and ex-Kulula CIO, echoes this view, agreeing that digital is forcing sweeping changes in IT. Once, it was only an optional IT enabler, now it's fast becoming mandatory.
"And since it's becoming less of an option, businesses must embrace digital in a big way, or fall behind," he says.
"But no business is a digital business," he adds. "It is only real-world business enabled in different ways and to different extents by digital technology."
Board level
As digital's application and impact stretches broader and delves deeper into the heartbeat of an organisation, Scholtz believes no division or department can afford to ignore the role digital can play to make it more competitive.
For more than a decade now, we have heard that IT must align itself with business. Paul Fick, CTO of the Jasco Group, says while many CIOs and CTOs still operate in a 'technology bubble', they no longer hold purely technology roles, but must link into the business and business strategy.
Pecking order also plays a role. CIOs should be at board level, rather than reporting to the financial director, says Collin Govender, VP Systems Integration at T-Systems. "The value IT delivers is critical to business, and the role of the CIO should reflect this importance," he says.
We have a crisis in IT leadership.
Peter Sondergaard, Gartner
Simon Hudson, CIO on Call at Amalgam IT Partners, further argues that if CIOs cannot participate in - and add to - strategic discussions at executive level, they add no value and 'might as well just be an IT manager'.
"In South Africa, IT is on board, but is increasingly again becoming technology focused. And it should remain so, since the market is riddled with poor IT," says Scholtz. "Unfortunately, you can't just slap new-world digital on top of old-world architectures or legacy systems, which are fast becoming counter-productive and inhibit digital enablement. I'd prefer my IT colleagues implement and operate solid IT and have a different business-focused, technology-savvy team driving business innovation and transformation."
"If a current CIO does not embrace and leverage the fact that the world has become digital, then he will never transition into the realm of value add and a digital officer will then come into being to fill in that void," comments Sasol Group CIO Alec Joannou. "This is the most exciting time in the short history of the role of the CIO, as it's the first time the role and function have the opportunity of progressing from being mere order takers from the business to a role of being order makers as well. For the first time in our existence, we have an opportunity to connect the dots between the digitisation that is everywhere and what the business requires to differentiate in the marketplace. We can now move from just being seen as a cost overhead department to a shareholder value-add function and department," he states.
"The DNA of a good CIO has always included the ability to understand and work closely with business to leverage technology and information to improve the business. We as CIOs now need to evolve even further by going to business and demonstrating trends and analysis that could be key competitive differentiators. If a CIO chooses to stay a traditional CIO, then the IT department will become a commodity and, ultimately, will be outsourced and a chief digital officer will be hired in to add value to the business. If a CIO understands the business and the importance of using IT and digitisation to contribute shareholder value, then there is no need for the chief digital officer, as it should, and will, become a key driver and any CIO's role," he concludes.
First published in the November 2013 issue of Brainstorm.
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