Has there ever been a stranger time to be a chief information officer (CIO)? The pandemic altered reality for technology teams in every business, yet most CIOs spent the last 18 months in familiar territory: provisioning VPNs and laptops—albeit for a vast cohort of suddenly-remote workers.
“Caught between old and new” describes the situation in other ways. Research from McKinsey states there’s “never been a worse time to be an average CIO.” As digital transformation puts technology at the center of corporate planning, CIOs are expected to feed into and even drive vital elements of company strategy.
The role has been moving in that direction for years, but the pandemic is pushing every IT leader to leapfrog out of yesterday’s responsibilities and into tomorrow’s. Boards want CIOs to stop focusing on managing technology and work out how to turn those investments into business value instead.
As technology reveals new revenue and operating models, organizational success depends on how quickly a CIO can make the move from functional to strategic leadership. But what does that mean when warp-speed digital adoption has pulled the future forward by years in just a few months?
From Cost Center to Income Generator
Laurent Pulce, CIO at Veolia Water Technologies says he experienced a crossover moment when his role moved from a Capex to an Opex function.
“At the beginning of my career, IT was seen as a Capex consumer and fell under the responsibility of the CFO. But progressively, we moved more and more under operations, and now I report directly to the CEO. That means when I speak, it’s not just IT’s voice, but a voice heard by an exco member.”
In his 20 years with the Paris-based utility tech giant, Pulce has witnessed the CIO role evolution play out in real time, “moving from a back office to a front office role.” While the arrival of the cloud was the catalyst, he says the real game-changer came when digital presented an opportunity to develop ‘pay as you go’ delivery models for what had always been locally installed solutions.
“In the past, we had a very powerful but also very complex on-premise system for utility clients. It could be painful to install and secure at each plant and required significant upfront expenditure,” he explains.
“As more and more of our solution backend moved to the cloud, we were able to offer clients the same functionality, but as a pay-as-you-go service. That meant we could make our solution available on a trial basis, and take advantage of flexible computing costs that were more aligned to our revenues. In other words, we were only paying for the cloud capacity we needed at any given time.”
The move to a SaaS model has also enabled the company to advance its sustainability objectives. In the past, Veolia had some 1000 servers deployed worldwide, many of them running at only 25% capacity.
“As an environmental company that kind of inefficiency is unacceptable,” Pulce adds. “Moving to the cloud has been a good way to reduce power consumption and by extension our carbon footprint. It also showed that being a sustainable company involves every department. Environmental factors are now central to the decisions we make in our IT department, and everyone understands the impact they have to contribute to this.”
The Transformative CIO
Pulce’s experience of innovation-driven leadership mirrors McKinsey’s analysis of what defines the role today. What they call the “transformative CIO” is a business leader who takes responsibility for initiatives that generate revenue.
They take the time to get to know the business and understand each department’s priorities and objectives, going “far beyond meeting with the CEO or attending strategy meetings. They invest time with business-unit and functional leaders to gain a deeper, current understanding of business realities on the ground.”
Autodesk CIO Prakash Kota says that the learning process has to include data capture and analysis. Operating models, methods, and processes are all changing rapidly. CIOs need to be able to deliver insights about broader internal harmony as organizations undergo an extended period of flux.
“We can give guidance to senior leadership and let them know what we are seeing. If teams are having a positive impact, how are they operating? Or if we see indications of negative sentiment from a team, how do we reach out to them?”
If McKinsey researchers are correct, today’s transformative CIOs act on information gathered from all levels of the organization and use it to articulate the ‘why’ behind a particular digital-driven shift or change in focus.
Becoming a Change Agent
Some CIOs are even changing the culture of the business, giving non-tech managers a clear understanding of the drivers behind a digital move while providing the vocabulary to explain it effectively to customers and stakeholders. Within tech teams, they're promoting tighter collaboration.
Anticipating the skill sets the organization will need in the future and helping shape the overall talent strategy often falls naturally into this process.
Veolia’s Pulce says that to succeed, CIOs have to accept that digital transformation is about more than the cloud; there's a human transformation underway as well.
He explains that during the course of Veolia’s own digital journey over the past six years, his team has trained or re-trained everybody in the business (to understand this new model), from the personal assistant to the support team and beyond.
“We realized that innovation wasn't just bringing technological change, it was changing how everyone worked and how positions were defined. In the IT team, we experienced a drastic change. I had young specialists coming into my office saying, 'I'm an engineer specializing in servers. What will I do in two years?’
“I said, ‘OK guys, you’re right. We have completely changed the organization, and there are no more infrastructure departments. But don’t worry. Your skills will be valuable for something else.’ Roles have evolved, and that’s proven to be true.”