‘Digital transformation’ describes the integration of technology into all areas of a business to improve business operations and deliver greater value to customers. As such, many organisations lean on their chief information officer (CIO), who normally serves as the top technology executive, to drive digital transformation initiatives.
CIOs often lead the integration of technology into an organisation’s strategies, products, processes and even partnerships. Technologies with the potential to transform businesses might include cloud, mobile, social media and data analytics; emerging areas, such as artificial intelligence (AI), Internet of Things (IoT), robotic process automation and so-called ‘digital twins’ (virtual representations of physical systems); and emerging immersive technologies, like augmented and virtual reality. In the end, digital transformation is less about specific technologies and more about discarding outdated processes and technologies so that an organisation can enable better automation, business flexibility, improved customer experience and innovation. Today, many organisations view digital transformation as vital to their survival — and the CIO as vital to digital transformation.
What Is a CIO?
A CIO is the executive responsible for an organisation’s overall technology strategy, including procuring, managing and implementing information technology (IT) systems. The CIO is a member of the senior executive team whose key role is to align technology initiatives with the company’s overall business strategy and goals. CIOs are ultimately tasked with maximising business productivity through automation. But the nitty-gritty part of the job also includes managing the IT budget, allocating IT resources, overseeing IT employees, building relationships with technology vendors and, crucially, ensuring the security of the organisation’s data and systems. The CIO often reports to the chief executive officer (CEO). Read more about the role of the CIO here.
Key Takeaways
- The CIO’s role has expanded in recent years to include more responsibility for business strategy, in addition to procuring, managing and implementing an organisation’s business technology.
- CIOs have been tasked with leading their organisation’s digital transformations as information technologies have begun to play increasing roles in many, if not all, facets of business — including customer experience.
- The CIO’s digital transformation role includes developing the organisation’s overall strategy to embrace digital technologies, managing the cultural change that usually must accompany transformation and then leading the organisation toward secure, cloud-based infrastructure capable of supporting the transformation.
Evolving Role and Responsibilities of the CIO
The CIO emerged as a job title in the 1980s(opens in new tab). In the early days, the CIO’s primary responsibility was to select, implement and manage IT solutions. The role was primarily about ‘keeping the lights on’. In other words, early CIOs operated in more of a back-office, operational capacity.
Over the decades, the CIO role has evolved dramatically, driven in part by the fact that organisations of all types are increasingly being transformed by digital technology. Today, technology has seeped into every aspect of organisations, and digital transformation has become a business priority for many. As a result, the CIO role has gained significance and greater responsibility for business strategy. A recent study by Lenovo(opens in new tab) found that 82% of global CIOs say the role has become more challenging than it was only two years ago.
More specifically, the CIO role has evolved in five critical areas:
Leadership skills:
As technology and data have become more critical to business success, the CIO’s role has evolved from day-to-day IT management to that of a strategic senior business executive. Today, CIOs are tasked with leading technology-based business innovation, providing guidance on digital strategy for customer interactions and other business operations and supporting business growth through technology. CEOs often look to the CIO to drive innovation and revenue-generating ideas, including digital transformation initiatives.
Risk mitigation:
As organisations incorporate technology and data into more aspects of their businesses, cybersecurity threats grow at a daunting pace. According to risk advisory firm Kroll’s October 2022 State of Incident Response: Asia-Pacific(opens in new tab) report, 59% of the 700 APAC organisations surveyed had experienced a cyber incident in the past 12 months — and a third of those had multiple attacks. Cyberattacks can result in significant damage, putting more pressure on CIOs to be vigilant in protecting their businesses. CIOs reduce organisational risk by ensuring data privacy and protecting sensitive information, establishing disaster recovery plans to minimise downtime in case of a security incident and providing cybersecurity awareness training to all employees.
Data and analytics:
As technology becomes ubiquitous within businesses, organisations are often overwhelmed by massive amounts of data. That data is critical to finding trends, solving problems and improving business decision-making, but it takes careful processing, skill and, often, cultural change before organisations can reap those rewards. CIOs play an important role in ensuring that data is used wisely and effectively. That means using and understanding data analytics to extract insights from data. Today, data and analytics should be a core competency for every CIO seeking to align with the organisation’s business objectives, ensure data quality and security and foster a culture of data-driven decision-making.
Cultural change:
Yes, technology has the potential to change business processes for the better, but only if the new approaches are widely adopted by the business. Today’s CIO is also responsible for the cultural change needed to support innovation and create a more agile, customer-focused organisation. In fact, Gartner recently predicted(opens in new tab) that CIOs would soon be as responsible for culture change as chief HR officers. As an article in Harvard Business Review(opens in new tab) puts it, ‘For organisations seeking to become more adaptive and innovative, culture change is often the most challenging part of the transformation’. While Gartner and Harvard often focus on large enterprises, managing such cultural change is a key challenge for organisations of all sizes. To ensure success, CIOs must communicate the vision for change in a way that is accessible and inspiring to all stakeholders, involve employees in the change process, foster collaboration and lead by example — that is, demonstrate the behaviours and attitudes they expect from others, such as embracing new technologies and processes.
Technology:
With the growth of global connectivity, AI, automation and massive data volumes, virtually all companies have to operate as tech companies today, regardless of the type of product or service they sell. Different types of technology are often deployed throughout a company and its various lines of business, putting more pressure on the CIO to ensure that all that tech works well and doesn’t introduce organisational risk. At the same time, the CIO is tasked with identifying and evaluating new and emerging technologies for their potential to improve efficiencies and spur innovation.The CIO’s Role in Digital Transformation
Although chief marketers, technologists or even ‘chief digital officers’ have sometimes led digital transformation efforts, it’s most often the CIO who takes charge. In fact, Deloitte’s Innovation Study 2021(opens in new tab) found that 80% of CIOs and tech leaders say they are driving their companies’ innovation efforts. That means the CIO must understand the business’s goals and the technologies or processes needed to achieve those goals, and then guide the organisation through the changes required to adopt and successfully integrate those technologies.
In the past, CIOs often lacked the support they needed to accomplish this. A 2018 Deloitte global study found that less than 10% of CIOs were getting the company support they needed to lead digital transformation. However, the pandemic triggered a shift, and companies are now pushing harder for digital transformation and putting more support behind those efforts. The 2021 Gartner Board of Directors Survey(opens in new tab) found that more than two-thirds of boards of directors (69%) in Asia-Pacific, European and U.S. companies accelerated digital business initiatives in the wake of COVID-19 disruptions, and about half anticipated changing their organisation’s business models.
The following are some of the key tactics CIOs can keep in mind in their role as leaders of digital transformation:
Develop a strategy: CIOs should take responsibility for creating a comprehensive strategy that outlines organisational goals, the technologies that will be deployed and a timeline for implementation. In this role, they must collaborate with business units to understand their needs and ensure that new technology solutions will meet their requirements.
Implement a change management strategy: Managing the move away from the systems that workers have used for years and are comfortable with requires more than technological prowess — it demands change management and people skills, as well. CIOs play a crucial role in clearly communicating the reasons for change, the goals and the potential impact on employees. That includes putting in place plans to advise people about coming changes and educate them on how to use new systems and technologies. The communications plan should make employees feel like they’re part of the change process, providing opportunities for them to give feedback along the way. Once new systems are in place, CIOs must ensure availability of ample training and development opportunities, and encourage employees to embrace the change and experiment with new ideas and technologies.
Prepare for a challenge: Digital transformation projects are typically large-scale, complex, multiyear efforts. CIOs who are prepared for a challenge, knowing there will be bumps in the road and few quick wins, will be better positioned for long-term success. At some companies, digital transformation can constitute a complete overhaul from an analogue to a digital business model.
Invest in modern, scalable technology solutions: A large part of the CIO’s role in digital transformation is to lead their organisations away from the inflexible, monolithic systems of the past and toward more modern, scalable systems and processes. Such shifts are challenging. But legacy technologies can hold organisations back and are less secure than their modern, cloud-based counterparts. Replacing legacy technologies with on-premises systems can be expensive, but newer cloud-based technologies often allow for more flexibility in how an organisation operates and enables innovation.
Develop a comprehensive data management and analytics strategy: To make the most of data assets, organisations need a set of practices for handling data so that it can be used to make better-informed business decisions. This shift should include examining the organisation’s existing data and working to clean and prepare it for more modern uses. By driving this shift toward a more comprehensive data and analytics strategy, a CIO helps the organisation get more out of its data once it has begun the digital transformation and new systems are up and running.
Make cybersecurity a priority, both financially and strategically: CIOs have an obligation to deploy network and system security best practices in their organisations to ensure overall business resilience. That starts with communicating the importance of cybersecurity to business leaders and the board of directors, if applicable. Educating board members on an organisation’s cyber-risk landscape and how its information security teams are working to mitigate those risks is crucial to a CIO’s ability to fund and implement the necessary cybersecurity strategies. It’s important to present data on past breaches and make sure senior business decision-makers understand what’s at stake should a breach occur, including not just financial losses but also eroding customer trust. It’s also important to clearly define cybersecurity-related roles and responsibilities, creating strategies for both preventing and responding to data breaches, conducting regular testing to identify potential vulnerabilities, protecting sensitive data, maintaining compliance with relevant privacy and security regulations and conducting regular training to raise awareness of cybersecurity risks.
Plan for the long run: Done right, digital transformation efforts will be ongoing. ‘By the time we are done implementing one wave, there will be a new one’, says Deepak Kaul, CIO of Zebra Technologies, in this CIO article(opens in new tab). ‘CIOs are evolving from technologist and strategist to catalyst. Future CIOs will be evangelists of digital dexterity’.
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Future of the CIO Role
The CIO role will continue to evolve and expand. For 2023 and beyond, some of the trends CIOs need to prepare for include:Cost-control and inflation: Potentially shrinking economies mean businesses will likely face additional cost pressures in 2023. This presents both an opportunity and a challenge for CIOs. The challenge is that CIOs are likely to have fewer resources to work with. The opportunity is to prove how well-placed technologies can lead to cost savings. Either way, the CIO will be under pressure to be financially wise and to find technology that can support business agility and growth.
Digital customer experiences: The customer experience will continue to be a significant competitive differentiator. Today’s customers are used to doing business from anywhere. They want fast, easy experiences, and they have little tolerance for companies that don’t meet their expectations. The companies that succeed will leverage things like design-thinking and the latest technology advances to constantly improve the customer experience.
A growing data-driven culture: Data will continue to grow in importance as companies perfect how they collect and use data to inform decision-making. Businesses that do this well have the potential to innovate and gain ground on competitors. Those that don’t will risk missing the insights that data can provide, potentially causing them to react too late to market shifts and changes.
The push for innovation: Technology and easier access to it have disrupted entire industries in recent years (think Uber, Amazon and Airbnb). There’s no reason to believe this will stop. Technology is enabling all kinds of companies to rethink services and processes and envision how they might be done faster, more easily or less expensively. CIOs should be vigilant about finding ways technology can help their organisations innovate, do more with less and raise productivity.
Cybersecurity: Cybersecurity attacks cost organisations big money. According to IBM’s Cost of a Data Breach 2022 (opens in new tab)report, between 2020 and 2022, the average cost of a data breach rose 12.7%, reaching an all-time high of $4.35 million. For many CIOs, responsibility for enterprisewide cybersecurity lies chiefly in their hands. As companies are breached more often and incur greater damage, CIOs need to focus on ways to reduce organisational risk.
Today, digital transformation is vital to many organisations’ long-term prosperity. CIOs, who often serve as a company’s top technology executive, are playing crucial roles in digital transformation initiatives, helping their organisations use technology more effectively as a differentiator in all aspects of their business. For CIOs, success with digital transformation initiatives typically starts with a well-thought-out strategy to integrate digital technology throughout an organisation’s business processes and a change management plan that will get everyone in the company on board.
CIO's Role in Digital Transformation FAQs
Why are CIOs important in digital transformation?
As most organisations’ tech leader, the CIO typically steers the execution of digital transformation initiatives. They investigate and develop plans for how the organisation can use digital technology in all facets of the business to work more efficiently, boost innovation, improve customer experiences and outperform rivals.
What are the roles and responsibilities of a CIO?
CIOs are responsible for developing strategic plans for deploying information technology in alignment with an organisation’s business strategy and goals, and for procuring, managing and implementing the technology to establish those plans. Today, CIOs often run diverse, hybrid-technology infrastructures and play a vital role in an organisation’s overall enterprise risk management efforts. The CIO often reports to the CEO and ensures that the organisation’s technology plan supports the CEO’s overall strategic vision.
What are 4 main areas of digital transformation?
Four main areas of digital transformation are often identified as customer experience (CX), data and analytics, cloud-based technology infrastructure and mobility (i.e., the ability to access business applications from remote locations, using mobile devices). Some experts consider change management, which is crucial to getting employees to adopt any business transformation, to be as important as any of the other areas.
How does a CIO use technology?
CIOs are tasked to use digital technology in ways that boost productivity and innovation throughout the business. Put another way: A CIO’s purpose is to use technology to help the organisation increase revenue, cut costs or both.
