The digital bear has been set loose. Digital transformations everywhere have been accelerated by the Corona crisis and in the coming years, the number of digital initiatives will only continue to grow. The "software is eating the world" principle, where organizations are becoming software companies, has gained momentum. However, technological advances make the future uncertain, so an increasing number of CIOs have embraced the concept of 'composable business' (according to Gartner) and are preparing for the next wave of digitization. So, what does that mean for their role within the organization?
In the majority of enterprise organizations the CIO’s primary responsibility was, until recently, the proper and cost-effective functioning of the IT organization. Up until early last year, CIOs seemingly found it difficult to step out of that traditional role. Despite the need for digital transformation, closer collaboration with the business proved difficult to achieve and the traditional gap between business and IT remained. However, this now appears to have changed.
The gap between business and IT narrows
While the pandemic has turned everything on its head, many CIOs laid a good IT foundation for the shift to online working. This required a robust infrastructure to make remote data accessible and for video conferencing and collaboration tools to run without issues. CIOs also facilitated the shift to using online platforms as a primary channel, and managed to limit the negative impact on application performance and end-user experience. Together, the business and IT departments have picked up the gauntlet and they’ve grown closer in a short period of time. The emergence of composable business will only strengthen this relationship and further narrow the gap.
Many IT organizations are already familiar with the technological aspects of composability in the form of agile working, or mechanisms like APIs and containers. The composability principle however, is very applicable in a business context. An organization is actually split up into smaller parts – the so-called 'composed business areas'. This makes it easier for organizations to adapt in real time to a sudden change in (digital) circumstances, and to optimize on digital investments. An example of composable thinking would be a manufacturer of wine refrigerators and dishwashers, (temporarily) setting up a business unit to produce medical refrigerators for hospitals. Each composable business unit ideally has its own digital person in charge (e.g. the Chief Digital Officer). The connecting element between these business units? The CIO.
'COO by proxy'
In line with the above development, Gartner predicts that by 2024 a quarter of traditional enterprise CIOs will be operationally responsible for the digital business, effectively becoming the 'COO by proxy'. This means that within four years, the traditional CIO will no longer see cost reduction as the end in itself. Their new role will encompass revenue generating responsibilties, and therefore investing in the further development of digital activities.
It’s clear that CIOs will play a much more prominent role within their organizations. If digital transformation continues developing at the current pace, a large proportion of traditional CIOs - much more than the 25% predicted by Gartner - will be handling the operational side of the organization. In that scenario, we can conclude that the gap between business and IT has officially been closed, and can thank the CIO.
CEO Sentia Group