CIO Role in Flux as Businesses Embrace New Tech

"Chief information officers say their role is evolving, as cloud computing and other innovations make it easier for business leaders to deploy technology beyond the control of the IT department.

"Of all the roles that we cover, the role of CIO is in the most flux now," said Chris Howard, chief of research at business consultant Gartner Inc. While enterprise technology's impact on the survival of the business has accelerated, the question is who is in charge of that, Mr. Howard said. "Sometimes it is the CIO, sometimes not," he said.

In response, many CIOs are leaving software and other enterprise technology decisions to finance, marketing, sales and other departments, and turning their attention to core business strategies.

The move to let business units run their own IT shop -- a shift tech leaders resisted for years, citing integration and security issues -- comes as cloud computing, data analytics, automation and other capabilities become critical functions at companies, said Kim Bozzella, managing director and leader of the global technology consulting practice at management-consulting firm Protiviti Inc.

Though most CIOs continue to oversee data governance, compliance and other higher-level IT functions, when it comes to day-to-day business apps they are more likely to be seen as advisers.

In a survey last year of 985 IT leaders and 250 line-of-business workers, by market research firm International Data Group, nearly 60% of workers outside of IT described their company's CIO as a "strategic advisor who proactively identifies business opportunities and makes recommendations." IDG said 86% said groups or functions outside of IT have their own tech budgets.

"The push to transform has stressed that companies that silo technology to their IT departments will be quickly outrun by competitors," said Jeff Wong, global chief innovation officer at Ernst & Young LLP.

Irving Tyler, distinguished research vice president at Gartner, said the proliferation of digital technology means CIOs can no longer be the owner-operator of every system in the enterprise anymore." Technology leaders who cling to an older mind-set are "going to struggle," he said.

John Hill, chief digital and information officer at Carhartt Inc., said many of the responsibilities he used to have over enterprise technology are flattening out across the company. His focus now is on ensuring systems are integrated, secure and aligned with the company's long-term strategy, he said: "I do think the role has changed."

Recently, the U.S. apparel maker launched an initiative to create dedicated tech teams in every department, starting with its wholesale, direct-to-consumer and customer-care units. Mr. Hill said the teams -- which he calls "squads" -- consist of both tech and business experts. Though under his watch, he said, "the prioritization of what's being done is in the squad."

At many companies, business segments aren't waiting for IT to bulk up on tech talent. According to Gartner, an average of 41% of today's total global corporate workforce is made up of what it calls "business technologists" -- employees hired into departments outside of IT to build tech tools and other digital capabilities. The average percentage of these employees within organizations varies by industry, from 28% in the public sector, to a high of 55% in the energy sector, Gartner said.

Many tech providers have started pitching cloud-based and low-code software tools, designed to be ready-made or easily customized, directly to business segments, bypassing traditional IT gatekeepers -- a trend that accelerated during the pandemic, analysts said.

Sam Deshpande, CIO at health-insurance provider Humana Inc., said having dedicated tech teams in each of the company's business segments gives IT leaders a unique position to view the entire enterprise-technology ecosystem. As such, he said, every segment's unique decision on tech investing gets integrated with the company's broader business strategy.

"I am impressed with how the Humana business leaders have leaned in to understand contemporary technology capabilities," he said." [1]

1. CIO Role in Flux as Businesses Embrace New Tech
Loten, Angus. Wall Street Journal, Eastern edition; New York, N.Y. [New York, N.Y]. 28 Feb 2022: B.6.