Six Trends CIOs Must Track and Leverage

The expectations placed on CIOs to be innovative have risen significantly at the same time that old notions about their role persist. While IT executives have been instrumental in many innovations that have helped firms advance in the turbulent economy, they are sometimes still seen as hindering innovation because of the costs and lethargy associated with data centers. Simply put, they are often unable to quickly integrate legacy systems or to implement new technology or business processes.

How can CIOs disprove the stereotype? New research being conducted at Pepperdine University’s Graziadio Business School with IT executives both in Asia and the U.S. indicates that successful CIOs must be savvy in both technology and business. They must leverage technology solutions for cost reduction as well as generating revenue.

As discussed on a recent Pepperdine-sponsored panel, the business-savvy CIO will sustain the current IT infrastructure and portfolio, while attempting to invigorate the firm’s business operations with new or improved processes. Interestingly, my investigations have found that only when the CIO provides a sustained, consistent and uninterrupted technology service can innovation be considered within the organization. Not only can legacy systems be a good foundation, but we found that without an integrated and mature architecture and infrastructure, many innovation efforts have been short-lived.

Six Key Trends

Our full research will be released shortly but in the meantime I offer six key developments in the last decade that -- from a technology perspective -- have had an impact on how CIOs craft and develop their roles and responsibilities. These include:

1. Portals or “Web front ends.” These portals, used as functional and content-aggregator tools, have allowed CIOs to temporarily piece together processes and data from legacy or siloed applications that had to be redesigned in the past. Instead of replacing entire back-end infrastructures and architectures, portals have enabled a quick and easy solution to data access problems. For example, the My Health Manager offered by Kaiser Permanente (aka “My Kaiser”) lets Kaiser Permanente patients easily access their own medical information from anywhere in the world via the Internet or on their mobile devices.
2. The emergence of chief technology officers and enterprise architects has given the CIO more time to focus on the business. These IT executives are often responsible for managing the technology architecture and infrastructure planning, and operational responsibilities once assigned to the CIO. Some enterprises have positioned the technology role as either equivalent to or in direct support of the product/service innovation function.
3. Social networking technologies. We’re well aware that consumer-based technologies are transforming how users access and disseminate information across multiple constituencies and platforms. Yet, these new open technologies—such as Facebook and many mobile apps -- have presented security risks to the corporation’s knowledge assets as well.
4. Cloud computing offers a new alternative for mass collaboration and services. Corporate executives must now decide how to leverage and use pervasive Web-based technologies and adapt business processes across their constituent bases to accommodate these platforms.  
5. Affordability. Doing work “better-faster-cheaper-NOW” has been a common topic of discussion among corporate executives tasked with driving the organization to do even more with less. The 2008 global financial crisis forced firms to cut IT budgets while still expecting the organization to use technology resources for competitive advantage. In 2012, speed-to-market is a benchmark for service delivery to the business.
6. Real-time analytics capabilities. Firms are now demanding immediate access to current data to make real-time decisions. The ability to provide enterprises with real-time analytics is only one example of how CIOs are being held to a higher standard of service and a greater expectation of business responsiveness.

All of these opportunities for change — or failure — constitute the new landscape that business-savvy CIOs need to address and understand to move forward. CIOs can achieve these goals if they are just as business-savvy as (and sometimes, more savvy than) other members of the C-suite. Often, they must acquire new skills that include: Envisioning and understanding corporate strategy; change management; leadership; innovation (including leading improvements to the business operations and growing the business); process improvements; and an ability to manage the organization and talent. 

The good news is that it’s not necessary to discard all past practices; what’s needed is a mix of old and new techniques. Some of IT’s historical ability to create business value via the reduction or elimination of costs embedded within the organization is surely important, along with a huge dose of aiding the organization in increasing or generating new revenue.

Mark W.S. Chun is director of the Center for Applied Research at Pepperdine University’s Graziadio Business School, as well as the Denney Academic Chair; editor In chief for the Graziadio Business Review, and associate professor of information systems.