IT holds a special place in the digital age bringing value to the enterprise through technology. As the world becomes increasingly digital, businesses are relying on IT to not only keep the current systems up and running, but to keep pace with digital technology advancements. While IT plays a vital role, the business demands can hinder the success of IT initiatives, which is often due to the misalignment of priorities between the CIO and CEO.
IT’s role rapidly became a fundamental component within the enterprise in the 1990s, when the Internet began to expand exponentially. The rise of the Internet led to the enterprise highly valuing the CIO position. Companies were striving to hire technology experts to gain a competitive edge through the Internet.
As the field of IT continued to expand in the ’90s, this lead to a lot of experimentation within the business—which also came a lot of trial and error. When a great deal of companies began implementing IT projects at this time, there were many failures that resulted in financial burdens. These incidents fueled the beginning of a disconnect between the business and IT.
Over time, the business has developed a hesitation towards increasing IT budgets, especially during times of slowing corporate revenue. These issues have continued until present day with new challenges being thrown into the mix, as many organizations are moving towards digital and realizing the importance of driving innovation. Today, there is an increasingly widening gap between the priorities of the business and IT.
Clearly, the CIO and CEO have roles with notably contrasting job responsibilities. Generally, CEO’s educational and experiential backgrounds derive from fields like finance and marketing (Harvard Business Review). The CEO often understands the core business and customer demands better than the CIO. As a result, the CEO and other business stakeholders often come up with ideas quicker and faster, but they don’t focus on the long-term time, effort, and money that goes into the idea becoming reality. The limited knowledge that business leaders have of the ins-and-outs of IT processes is one of the factors behind a limited budget for IT. On the flip side, IT is often too focused on keeping the lights on and making sure the day-to-day runs smoothly that they don’t get to focus enough on driving innovation initiatives.
The challenges of understanding what goes into being successful in both fields is not the only obstacle. CIOs have identified additional hurdles inhibiting them from advancing IT and driving the business forward. For example, a limited IT budget inhibits innovation for businesses; the lack of funding heavily restricts IT projects necessary for moving forward in the age of digital transformation. The business dependence on IT vendors also prevents advancements, due to the outdated processes vendors often partake in. Another example is the difficulty of showcasing completed projects because IT teams often create intangible assets, such as software. It can be difficult for the business to quantify the ROI of an IT initiatives without having a real, tangible product in front of them at the end of the project.
Another common issue faced by the CIO is limited participation in strategic business planning sessions. This diminishes the opportunity for IT projects to advance the business and may cause the CEO to misunderstand how essential technological advancements are for the success of the enterprise (CIO.com). The absence of the CIO at the c-suite table can set back a company’s ability to advance and compete. It’s essential for technology executives to hold discussions with corporate executives to create strategic plans that marry IT and business initiatives to accomplish company goals; engagement from both parties is vital for success.
Finally, research identifies the CIO as a business commodity, rather than a driver of innovation in the enterprise. IT teams are spending most of their time coordinating initiatives that achieve business goals, rather than innovating with technology. According to CIO.com, CIOs report spending 51% of their time aligning IT initiatives with business goals. After the CIO prioritizes the CEO’s expectations, the remainder of time is spent on the following: improving IT operations (49%), security management (46%), implementing new systems/architecture (41%) and leading change efforts (40%). Bridging the gap between the CIO and CEO will generate improved IT processes and free up time for innovation initiatives, ultimately providing a competitive edge to the business.
The Future of IT
Collaboration between the CIO and CEO is a pivotal component of surviving and thriving in the digital age. With today’s rapidly advancing technological development, it is necessary for the enterprise to adapt to change and innovate. According to Znet, the top 5 priorities for CIOs to prioritize in 2016 are digital transformation, utilizing the cloud and agile platforms, filling the talent gap in the IT workforce, and focusing on personal return on investment, as well as allowing for time to be spent on discovering new aspects of the field. The ability to focus on these priorities, instead of just on aligning IT and the business, will help the organization be ready to thrive in the digital age.
In the upcoming 3-5 years, CIO.com expects a transformation in CIO initiatives and priorities. In the future, 51% of CIOs will focus on driving business innovation, 41% will identify opportunities for competitive differentiation, 37% will develop and refine business strategy, 35% will lead change efforts, and 33% will develop go-to-market strategies and technologies. These initiatives leverage the CIO as a much more strategic resource that will propel the business forward. When the CEO and CIO can find middle ground and work together as true partners, the enterprise will achieve true competitive advantage in the digital age.