Henrik Nilsson - July 25, 2018

CIOs take back the driver's seat in digital transformation

 

Henrik Nilsson has pioneered the Technology Business Management (TBM) category in Northern Europe and works with the TBM Council to fulfill its three mandates of education, collaboration, and certification. Here he addresses CIO discipline re: shadow SaaS, cloud strategy, and shared responsibility for IT spend.


We are on our way into the fourth industrial revolution, where previously incompatible technologies merge and expel the lines between the physical and the digital world. 

All industries are experiencing disruption at a speed and with a span that has never been seen before. Since virtually all types of systems are affected by this disruption, digitization is at the top of most companies' agendas as the largest catalyst for innovation and future security of the company. 

Thus, the role of the CIO is more important for a company's revenue and growth than ever before.

Although it seems obvious that this increased focus on digitization is within the CIO's domain, many decisions about innovation are taken outside the IT department as demand and needs from customers put pressure on other parts of the company. 

Studies from Altimeter show that CMOs lead the digital transformation in 34 percent of cases compared with only 19 percent of initiatives by CIOs or CTOs. 

The CIO should find their way back to the driver's seat—not just because it is their responsibility but also because this positions them as strategic business partners and not just technology leaders. 

But how can the CIO have more influence over digital transformation? 


Demand drives digital innovation

Customer demand drives digital innovation as companies want to deliver effective apps and communications across multiple channels. However, this can cause problems when dealing with complex technologies, such as cloud. 

Because they are easy and agile to use, cloud services are a valuable tool for creating innovation. But the same benefits also mean that cloud costs can grow quickly and get out of control. Different business units can, without the support and expert knowledge of a CIO, set up cloud and SaaS services without being able to monitor their value or effectiveness. 

The requirement to analyze and understand the real costs of a cloud system is also a challenge for the CIO. Many companies do not have a master service agreement with cloud vendors due to the increasing subscription market, resulting in constant fluctuations in costs. With macroeconomic changes taking place at microeconomic speeds, the CIO needs to have an overview of the costs as close to real-time as possible. Many have begun using technology business management (TBM) as a solution to this problem. 

Instead of just looking at IT as one big bill, TBM can help the CIO get a detailed overview of the total IT costs, including complex costs such as cloud, end-user computing, and security, and the extra staff needed to use these technologies. This allows the CIO to get a precise picture of the total cost of ownership and to translate these costs into business intelligence that can be used to drive digital innovation. 

Equipped with this knowledge, the CIO can become a more effective leader in digital innovation, engage in productive conversations, and become a better business partner. Instead of struggling with other managers about budgets, the CIO can gain a better understanding of the company's goals and draw a clear picture of the company's IT ecosystem through costs and services. 

This makes it possible for a CIO to really sit down and be part of the company's management roles, working with customer-driven motivation, thus further improving the work on digital innovation. When the CIO acts as the leader of digital innovation and as a partner for business units, culture can enhance IT's overall efficiency across the entire enterprise. 

Concepts such as shared responsibility for costs that allow different business units to accurately analyze and understand their own IT spending can help create the change that is needed for any business wishing to survive the fourth industrial revolution.


Editor's note:  This article was originally published in Computerworld. Taler du dansk? See the original article here.
»Read next on Emerge: More than a facelift, digital transformation revamps the IT value chain, an interview with Anil Cheriyan, Chairman, TBM Council

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