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The CIO role, from IT operator to business strategist

 

Changing role of the CIO: A review of the decades

CIO Isaac Sacolick, author of Driving Digital: The Leader’s Guide to Business Transformation Through Technology, was a firsthand witness to the shift in the CIO role to business strategist. When he started out as a young CTO in the 1990s, the CIOs he knew were operators — To understand the extent of the transformation of the CIO role, it helps to review IT’s top job at some of its major inflection points.

Major inflection points in IT's top role from the mainframe era to the present.

1950s through 1970s: The mainframe era
In the mainframe era, IT’s top professionals were the specialized programmers, systems operators and analysts hired to operate the massive machines that gave the era its name. Also known as big iron, mainframes are the expensive, complex computers that debuted in the late 1950s and were used primarily 1970s through mid-1990s: Distributed computing era
The heyday of the mainframe was followed This decentralization of information systems gave rise to IT managers throughout the enterprise — including businesspeople with IT expertise. At the same time, decentralization highlighted the need for an executive-level technology leader to oversee a function that now touched every part of the enterprise, directly affected how businesses made money and increasingly dictated how employees worked. The term CIO came into use in 1981. (See “Who coined the term CIO?”)

1990s through 2000s: Web and e-business arrive
CIOs in this period remained responsible for delivering new IT systems on time and on budget and for running existing and new systems with a high degree of reliability. The technical challenges CIOs faced did not abate. The 1990s marked the adoption of the modern enterprise resource management (ERP) software suites that collected and managed data produced at different levels of the business. These were costly, complex systems that often required significant business process reengineering. At large companies, there were data centers to build, networks to protect and critical business applications to maintain.

Even as CIO responsibilities expanded, IT continued to be viewed as an expense center rather than an investment in business success. (The idea of IT as an innovation hub was far off.) As a result, CIOs were continually pressured to cut costs, to strive to do more with less.

One trend that helped turn around the perception of IT as purely a cost center was the adoption of IT chargeback, an accounting strategy that applies the costs of IT services, hardware and software to the business unit in which they are used. This strategy was a change from traditional IT accounting models, in which all the technology costs were absorbed Another development that changed the role of the CIO and IT was the advent of e-business, the conducting of business processes online, and e-commerce, the buying and selling of goods and services on the web. This opened the door for some CIOs and their IT departments to become more deeply involved in business strategy.

2005 through present: Cloud rises, digital transformation era begins
The immensely successful 2007 debut of the iPhone (followed But the trend that radically redefined the CIO role was the rise of cloud computing providers between 2005 and 2015. Cloud computing companies provided software, infrastructure and platforms as a service to other companies. The use of cloud shifted IT investment from a capital to an operating expense, it dramatically cut the time to provision services to business users, and it forced CIOs to deal with a new class of vendors. It also allowed them more time to focus on strategy.

CIOs are emerging as the leaders of digital transformation.

The rise of cloud providers effected another big change for enterprise IT: Cloud providers allowed business leaders, and even employees, to easily procure powerful technology without consulting IT and the CIO. The potential security risks and integration problems posed Between 2010 and 2015, digital transformation — a term that has been widely dismissed as a buzzword and remains difficult to define — started rising up the CIO agenda, marking yet another inflection point in the role.

 

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