Companies Long-term Strategic Goals

As the barriers between business strategy and technology crumble, the CIO has been catapulted to a new position in the enterprise. Once relegated to being caretakers of company computer systems, CIOs were valued for their opinions insofar as tactical implementation and technology maintenance were concerned, but they often faded into the background during long-term strategic planning.

Now, CIOs are an organizational nexus, agents of change who have made technology such as enterprise data warehousing and data mining focal points of corporate strategies.

The Evolution of the business environment has helped foster the transformation. In the past, departments worked in silos with little access to, or knowledge of, the work carried out by other departments. This shifted during the tech boom of the 1990s, when the power of information was recognized as a key growth driver and companies beefed up IT budgets. The trend continued after the tech bubble burst, when the need for increased productivity and decreased costs was heightened by competitive pressure.

Today, CIOs are part of an extended corporate family, responsible for integrating processes across the supply chain. As a result, the CIO is one of the few executives with a bird's-eye view of the entire organization. As such, CIOs need to take on the role of the visionary.

Danny Dale, senior vice president of The Boston Consulting Group, explains in a recent article from Heidrick & Struggles, "They have to look at the enterprise, create a five-year horizon and then ask, 'What innovations do we need to make now that in five years will be driving this business?' "

The transformation
However, the transformation from IT caretakers to change leaders is by no means complete. Many CIOs are reluctant to engage in projects outside the traditional IT environment. This is not necessarily due to indifference but is more likely a response to an ever-increasing workload.

10 steps to becoming a successful change leader

Focus on the fundamentals, deliver projects on time and on budget and run the IT department as a line of business with a profit-and-loss mentality.
Balance transformational changes in the organization with continuous improvements or small steps.
Create an office within the IT department that coordinates and evaluates projects across the entire company.
Connect the dots throughout the organization in order to understand the needs of all aspects of the business.
Develop the ability to focus on long-term strategic planning and not just immediate IT-related matters.
Hone leadership and management skills that go beyond technology and into relationship management and communications.
Think inside and outside the box to understand what everyone is doing and how the value chain is changing.
Move the entire company to do things differently than it has in the past by redesigning existing business processes and developing new ones.
Develop strong communication skills to further articulate IT's value.
Take the IT team with you by making sure they understand their larger role in the business.

Nonetheless, a change in mind-set is occurring, and several key factors were found to differentiate "transformational" or change-leader CIOs from the pack. Among them are identifying macro business issues or the "big picture" and prioritizing and evaluating projects based on the mission and long-term strategic goals of the organization.

Clearly, this trend will continue. "Technology today forms the backbone of every successful business, and this change is reflected in the role of CIOs," says Romil Bahl, managing director and founder of Infosys Consulting, in his recent Bahl Perspective "Think Flat." "They are increasingly being asked to articulate the value of IT to the business. And as business process and technology become harder to separate, they are expected to have a greater understanding of the business and act as change leaders by transforming the IT function from siloed, tactical operations into a global strategic function," Bahl states.

All of these factors produce what has been called the "transformational CIO," who possesses a true understanding of business and who has made technological innovations possible. But as Dale points out in the Heidrick & Struggles article, these CIOs must also deliver strategy as well as find and nurture talent within the organization.

Varying roles
While the role of the CIO as visionary is evolving, it also varies by industry and by company. The Bahl Perspective outlines four general types of CIOs: technology leaders, business solution providers, planners and business change leaders.

Technology leaders, as the name implies, are experts who can keep legacy systems running while introducing innovations. They are known for delivering major, complex projects on time and on budget and are most valuable to companies that need to create or stabilize a world-class solution or IT delivery unit.

Business solution providers have already stabilized their company's delivery systems and are focused on delivering real business solutions. They drive changes with world-class change management disciplines. Many retail, consumer product, transportation and logistics companies rely on their skills to initiate information-centric models, including the use of radio frequency identification (RFID) and other real-time technologies.

Planners have become integral to their businesses because of their ability to think strategically and make sound technology trade-offs. They can sell the value of IT in their organizations and build up the service while delegating its management. They are prevalent in the energy and banking industries, where IT is expected to be involved in issues such as regulatory compliance.

Business change leaders understand what makes their businesses tick and the need to improve performance through better process metrics. "They are converting mounds of data into insights that enable and improve everyday decisions and are helping their companies make money from these decisions," Bahl says. "They are catalysts for business change. ... With time, I expect more companies to look for CIOs who can be change agents." T

Len Lewis is a veteran retail industry journalist, commentator and editorial director of Lewis Communications, Inc.