How Digital Transformation can take the CIO to the board level
For several years CIOs have been complaining about their lack of involvment in the strategic decisions in their companies, being part only in operational discussions. An irreverent CIO once told me: “We absolutely not in the “C” level! We are at the board meetings only when the datashow is not working.”
The CIOs had their golden age with the Internet initial growth. At that moment, the “Dot Coms” were booming – as the ancestors of the startups – and would change the world with their new technologies. IT was the focus of the new businesses and the CIOs were placed in the spot. Right after that, the dot-com bubble collapsed, technology did not deliver the artificially inflated expectations and the CIOs started to loose their importance in the corporate world
The lowest point of the CIO´s careers was Nicholas Carr article “IT Doesn’t Matter”, stating that despite its importance, IT would soon be a commodity and bring no sustainable competitive advantage for the companies. Mr. Carr believed that no innovation would come from technology and it would become a cheap commodity, acessible for all companies and not supporting huge investments.
Nicholas Carr has looked into 2003 IT, mainly its infrastructure. A lot has changed since then. Although that kind of IT has really became a cheap commodity, he did not foresee that this old IT has served as a bold platform for innovation and new business models, creating a new IT.
Since then, IT has became so pervasive that segmenting businesses into bricks-and-mortar or pure-software just makes no sense anymore. Every single business is becoming more and more digital. And in the digital world, IT matters a lot. Ask Netflix and Blockbuster (or what´s still there) if IT matters. For other segments, IT painfully matters or has become a new revenue source. New ways of using technology will impact an ever growing business list, where several businesses are being or will be rewritten by software.
Gartner has coined a word that fully expresses how things have changed: Bimodal IT. This bimodality refers to the two IT environments, where the first is the infrastructure (servers, network, foundation softwares) and the second is related to the differentiation opportunities and digital innovation. Nicholas Carr was right about the first one, but he couldn´t have imagined how strong the innovation wheel would become. CIO has a new chance in this second environment, where a new generation of digital products and services will be created.
The CIOs have the opportunitiy to lead the digital transformation in their companies. He or she is probably the best person to understand the new opportunities brought by innovative technologies, but this role demands a new mindset, moving away from IT foundation and being closer to business opportunities. If the CIO does not take this role, another executive will, because the board pressure to make this transformation happen will be bigger and bigger. Another candidates, as usual, will be marketing and business leaders, having the advantage of being closer to digital technologies than they were ten years ago. For them, technology is not about COBIT or ITIL, but actually the business opportunities unleashed by it.
Nicholas Carr closes “IT Doesn´t Matter” saying that IT would be boring and bureaucratic. But IT is again at the spot to become the company nervous system. It´s all about how the CIO will look at this opportunity: to lead the digital transformation process or prove Nicholas Carr right. It’s up to you, CIO!