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Issue of March 2004 
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The evolving role of the CIO

From the wire-room to the boardroom

A CIO of a mature organization of today has shed the so-called 'strictly techie' status to step into a leadership role in business strategy planning. A look at the transition, skills, and strategies for acceptance of a CIO in his/her new 'avatar'. by Minu Sirsalewala

The CIO cannot be isolated and stay locked in a technology greenhouse. He needs to participate in business discussions to bring out areas of smart automation that enhances the business productivity C.N. Ram, Head-Information Technology, HDFC Bank

Information Technology today plays a far greater role in driving a company's business agenda than it did a few years ago. IT's role now, is to envision business opportunities and initiate solutions with the help of technology.

The CIO has evolved from playing a support function role in the wired room into that of a business strategy maker in a boardroom. And the technology manager/CIO, keen to contribute to the company's bottom line, has devised ways to use technology to transform the way a company does business. This has resulted in an expected change in a CIO's job role. The move has been helped by the interaction of the CIO with business heads across various functional areas of an organization. This has provided him/her extensive understanding of all areas of the business.

The CIO of today has shed the so-called 'strictly techie' status, partnered with the CEO and other executive peers, and now drives business with the strategic use of IT.

A transition

"CIOs at smart enterprises will become 'Chief Innovation Officers,' and will use technology to change how business is done, or create new high-value products and services." These are the words of a visionary D B Phatak, Subrao Nilekani, Chair & Head, Kanwal Rekhi School of Information Technology, IIT Bombay. He was delivering a talk at the Technology Senate 2003, in Kochi on 'The evolving role of a CIO'. The Technology Senate is an annual event hosted by Network Magazine, and is the most attended and revered conference for CIOs in India.

The CIO might witness some resistance towards acceptance in the boardroom in case the board has only seen the 'technical' side of his personality Arun O. Gupta, Senior Director Business Technology, Pfizer

The CIO of a mature organization today is expected to don a new role of a 'business strategist'. He/she is expected to take a keen interest in the way the business is run and deliver in terms of meeting the strategic goals of the company. This perceived need for business transformation demands CIOs who are ready to step into a leadership role in business strategy planning.

Darwinian perhaps

Becoming a business strategist is perhaps a Darwinian process of evolution for C.N. Ram, Head-Information Technology, at HDFC Bank. He says that it is not possible for the CIO to be isolated from these trends and stay locked in a technology greenhouse. The CIO needs to participate in business discussions to bring out areas of smart automation that enhances customer stickiness and raises employee productivity.

The CIO then needs to make suggestions about how to get into newer customer segments and leverage investments in technology. Therefore the CIO needs to understand businesses and business processes.

Arun O. Gupta, Senior Director Business Technology, Pfizer points out that it is recognized that IT is all-pervasive and its adoption provides benefits to the organization by bringing visibility to various processes and operations. The CIO is the prime driver of this change and is the one to manage effective adoption and use of IT enabled systems. The CIO also needs to be a part of the creation of business strategy.

Across business functions

"Today the CIO needs to have all the skills of a senior manager and understand business processes of different departments. This is because a business transaction in one operational area has an implication in another area too," explains S.R. Balasubramanian, Vice President-Information Systems, Hero Honda Motors Limited. The necessary job skills for a CIO now match those of other executives. CIOs now need to practise effective communication, strategic thinking and planning, and good comprehension of business processes and operations.

A challenge

Most CIOs feel that acceptance and communication are the major challenge areas. The majority of CIOs report to their CEO (as they've long argued they should) and have cemented strong working relationships with other functional heads.

But the CIO's walk from the wired room to the boardroom has not been smooth and easy. Nihar Rao, Chief Technology Officer, OM Kotak Mahindra Life Insurance, opines that very often the transition is desired and driven by the personality and the background of the CIO.

An important concern for many CIOs today is to be a part of the CEO's agenda. Balasubramanian of Hero Honda expresses the need for more interaction between the CEO and the CIO. He being the VP-IT had to drive an aggressive initiative to involve the company's executive board in evolving and monitoring the IS plans of the organization. Though the managing committee was receptive to the idea, he had to constantly drive forward the IT initiatives in line with the strategic goals of the organization with the help of the CEO.

Acceptance

Acceptance is an issue pointed out by several CIOs. C.N. Ram of HDFC Bank mentions that acceptance from both peers and senior management is a problem area. But once the issue is resolved, all that the CIO needs to do is go ahead with his/her agenda.

He added that along with various other functions in an organization, the CIO's role is also evolving. And only a few organizations will allow the process to happen rapidly.

Sanjay Govil, Director & Chief Information Officer, Eicher Group says, "The existing mindsets in organizations need to change. The CIO needs to learn about areas like marketing and effectively communicate how IT is not just a support factor but a business enabler."

Reinforcing this point is Arun Gupta of Pfizer. "One might witness some resistance towards acceptance in the boardroom in case the board has only seen the 'technical' side of the CIO's personality. The CIO needs to drop the 'technical' hat and put on a 'business' hat."

A CIO's responsibility was pointed out by Nihar Rao of OM Kotak. He feels that a CIO needs to develop a cross-functional interface for catering to the peers and the senior management.

Skills

The pivotal skill identified by the veterans for success as a CIO is the ability to communicate effectively. The top three skills that a CIO needs in order to perform effectively in an organization have been identified as, communication, understanding business processes and operations, and strategic thinking and planning.

Brad Boston, Senior Vice President and CIO, Cisco Systems, Inc. says, "IT has evolved to become an integral part of the business and this evolution has required us to change our thinking and how we interact with our peers in the company. To make a successful transition the CIO must be able to clearly communicate the value that IT brings to the company."

Communication is critical in working with business counterparts to learn and understand different business needs. Once a CIO possesses this skill, there are few other skills he/she will need to make an effective and efficient transition.

Brad Boston says that the CIO must be able to communicate how the tools being deployed in the business will affect the bottomline. Understanding the macro-processes that drive the business like the market-to-sell, quote-to-cash, and forecast-to-delivery are critical to making sound technology decisions that will impact every part of the business and the customer experience.

Balasubramanian of Hero Honda says, "Effective communication is the most important skill since there needs to be a detailed understanding of the business which must be communicated to the senior management and the department members. If CIOs can't communicate, their projects will die, either at the approval stage when the executive committee rejects them, or at the implementation stage when users resist them."

Translating technical information for users, peers and superiors who don't understand IT also constitutes a major part of the CIO's job. It is advisable to spend as much time as possible talking about technology to people in the different departments of your company in the language they understand.

Arun O. Gupta of Pfizer insists that he has not spoken one word of 'technology' in his organization. The trick was to talk technology but in the users' language. At the same time it was imperative to explain the limitations of technology or it would result in unrealistic expectations from end users and fellow executives.

He added that the skills required are not different from what the users currently possess. It's the application of these skills that has to change.

Need to understand

CIOs need to understand their businesses on two levels. One related to general business and industry trends, and two related to company knowledge.

Every CIO needs:

  • To understand the industry segment in which they operate
  • The tools required to successfully manage their function
  • To drive the team towards delivering the objectives
  • To challenge status quo and create opportunities for change
  • To drive growth and manage investments

Minu Sirsalewala can be reached at: minus@networkmagazineindia.com

A CIO's responsibilities in new light
V.V.R Babu, Chief Information Officer, ITC Limited

In a nutshell, the CIO would need to have an understanding of business processes and associated problems to lead his team in mapping the business process to the functionality offered by the IT solution. The CIO would also have to create a buy-in for the idea/concept to the senior business managers. Finally, the CIO would need to lead his team for effective deployment to realise the business goals.

As the CIO becomes a business strategist, his responsibilities are likely to be the following:

  • To understand the challenges facing the company and participate in the strategic planning discussions to formulate/develop IT Strategies that help the business managers in restructuring the business model through the use of IT.
  • Solve specific business issues/problems faced by the organisation.
  • Effectively align business strategies/goals with IT capabilities to create achievable IT initiatives and a plan for implementation.
  • Assess sourcing options, organizational readiness and IS functions' capabilities to make informed decisions for staffing and implementing IT initiatives.
  • Continuously evaluate the gaps between dynamic business needs and IT offerings and initiate actions to prevent any negative impact on business.
  • Develop appropriate strategies for managing and motivating IS resources to achieve organisational objectives.

The key challenges in the transition are:

  • The ability to quickly gain the understanding of company's business model and the business problems that are impacting or likely to impact it's competitive position.
  • Creation of awareness about the power of IT and it's strategic advantages to the business among the board members.
  • Proactively developing a business aligned IT strategy.
  • Effective communication with business managers at all levels for creating an environment of comfort and confidence in the team.
  • Setting the right expectation levels.
  • Effective management of manpower attrition to minimise its impact on IT services/initiatives

Skills required to be a successful strategist are:

  • Ability to comprehend the business model, particularly to understand how the business is attempting to create superior value for the customer/consumer.
  • Insights into how the various business processes combine and synergize to create the superior value business model.
  • Capability to think through a technology model which can impact cutting edge differentiation to the business model.
  • Extraordinary ability to lead high competency teams, synergize their knowledge and help them to learn to think in terms of business processes and business modelling.
 
     
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