CIO, Shadow IT and the Chief Innovation Officer

Some random thoughts from my travels over the past few months….

CIOs keep saying the rate and pace of change is accelerating at an alarming rate” and that they have to do more with less. That’s not surprising. What is surprising, however, is how Shadow IT is erupting  “at a rate similar to that when the Internet took off.”

The rate and pace of change is enveloping CIOs from all directions. The “Y generation” is demanding that the technology they use at work is equal to what they use at home. And I’m the same way. I recently downloaded a travel APP and after 5 minutes and 2 visits to the help screen. I simply gave up and deleted it. If it doesn’t work first time, I don’t have time for it.

Many CIOs said their focus is shifting from backend systems to innovative investments to grow organizational revenues and the attention span is weeks or months- not years – for value delivery. Representatives from a financial organization said an audit found hundreds of expense items for cloud-based applications that IT knew nothing about and concluded that Shadow IT accounted for up to 15% of IT spend on top of approved investments.

A Chief Marketing Officer at a CIO round table said that Shadow IT in marketing was the only way to survive.

The Changing Role of the CIO

Several CIOs o told me they were no longer investing in ERP or Back Office systems as each dollar spent “is a not spent on innovation.”

The CIO role is fundamentally transitioning or in some cases splitting. The traditional role-one who keeps the lights on is being supplemented by one who can deliver innovation with top-line revenue growth for the business. Based on my last 2 months of anecdotal data, this split appears to be working quite well, but remember – it’s early and there may be unexpected pitfalls.

The delivery of IT sole sourced internally is rapidly ending.  In my early days  in the banking industry, both within IT and the business, we delivered all of our services, from printing checks to laying cable to branches for network communications. Delivering the operational aspects of IT powered business will require IT to weave together and optimize complex networks of partners that make up the Service Value Chain to best support various customers and enable business freeing up resources for innovation.

Chief Innovation Officer

The other half of IT and the role of the CIO must evolve to that of the Chief Innovation Officer. The Chief Innovation Officer will have a team that would work directly with the business to truly understand the business strategy, and quickly deliver solutions that exploit the market opportunities. This team would focus on innovation across the organization – not necessarily limited to IT – designed to rapidly grow top line revenue.

In short, the first half of the organization will focus on cost effectiveness, efficiency, quality of service and the second half rapid innovation driving growth.

The transition of the CIO to Chief Innovation Officer has already begun in some organizations. One manufacturer is treating all new product development as an innovation project that encompasses all aspects of the program of work, including the IT components. In this case, the team treats the technology components as a single aspect of the innovation and the financials. Initial and ongoing costs, as well as profitability, are profiled and tracked, which allows the business to more rapidly make determinations.

So the time is now ripe for the Chief Innovation Officers to emerge who is focused on driving innovation first, with the delivery of services to be effectively managed based on the capacity demand.

Article source: CA PPM Blog

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