Divide and Conquer: The Growing Role of the COI
A chief information officers’ conference in Budapest on November 6 looked at how the CIO role has changed, and what might shape its development in the future. The Budapest Business Journal went along to sample some views.
László Behán, LeasePlan Hungária.
Conferences, public debates and articles about the current state of the Hungarian economy invariably end with one conclusion: there is not enough labor force. The shortage has become chronic in areas requiring information technology expertise. But there is less talk about how the role of the chief information officer changes within, or together with, company management.
In a previous issue of the Budapest Business Journal, we saw that not only are technology professionals hard to find, but it is hard even to define exactly what kind of experts are needed (see “Professionals With a ‘Very particular set of Skills’”, October 18).
Just 10 years ago, the IT and business functions were sharply separated, with little connection between each other: the IT department supplied the technology devices to the business. Since then, the environment has changed dramatically, impacting procedures too.
With the rapid deployment of broadband internet, more and more data transfer has become available, while costs have remained flat, or even fallen. Enterprise resource planning and customer relationship management systems were deployed, followed by moving into cloud technology and digital transformation (coming up: artificial intelligence technologies).
Inevitably, business employees became advanced IT users, which implied not only using technology, but also shaping or re-shaping it with requests for new features and functions. All these changes profoundly impacted the role of the CIO, but how this position will transform, is hard to predict.
But what is a chief information officer? According to the definition of prestigious technology magazine ZDNet, a CIO is the most senior technology executive inside an organization.
“The CIO is responsible for setting the IT strategy and ensuring that this works with the broader business strategy. In many digital businesses, the IT strategy will be the main element driving the business strategy. This means the CIO needs be able to understand the broader business requirements and which to prioritize through the use of technology,” ZDNet says.
In April this year, Forbes Insights and virtualization company VMware conducted a global survey of 650 CIOs about the future of their role. Below are some of the findings, although, not all are fully relevant for the Hungarian market, given that all CIOs questioned were from organizations with annual revenue of USD 1 billion or more. With this in mind, the survey, called “The CIO of 2025: Driving Fundamental Enterprise Change” found the following:
• When asked where in the company they expect their authority to increase, 60% of CIOs said they would have much greater influence over product design and development, a reflection of the growing strategic importance of apps, which have become central to the customer experience.
• Other high technology priorities include IoT applications and machine learning, two technologies that run in tandem with AI, as well as edge computing and blockchain. Though AI applications are still in their infancy, CIOs see them as the key to the future. Some 60% believe that, by 2025, AI and machine learning will be very important or critical to their business. Over half said the same of IoT, edge computing and blockchain.
• CIOs may also face internal resistance. AI and ML will relieve employees of repetitive work and free them up for higher-level tasks, but some may be unprepared for the increased levels of responsibility or for the prospect of interacting with robots or working according to automated processes. Others may fear reduced hours or job loss. CIOs understand this. As the survey shows, CIOs see gaining employee buy-in and collaboration as the most critical factor for successful technology implementation.
• As laws safeguarding personal information increase, CIOs will be called upon to increase data security and provide better disclosures and more options for customers. More than 60% expect to play a greater role in regulatory compliance.
Hungarian technology managers agree that the position of the CIO will inevitably transform. “It will evolve organically. It is very likely that it will split into several positions: one for artificial intelligence, one for data management and so on. No one can oversee the whole area anymore,” László Popovics, head of innovation management department, OTP Bank says.
The CIO needs not only to become more specialized, but also to be able to handle the ever growing amount of incoming requests.
“As a manager, I try to keep out of as many operative issues as possible. We have set up a protocol for incoming queries and requests. All of them are redirected to the specific manager in charge, and I am contacted only if there is a glitch in the protocol, or the rules outlined there do not apply to that specific issue,” Popovics says.
The problems that will arise with the expansion of the technology are not primarily related to technology skills, he adds.
Soft Skill Issues
“These are rather soft skill issues, how people communicate with each other. Therefore, now we aim to reduce professional training and focus rather on soft skill trainings,” Popovics says.
Operations director at LeasePlan Hungária, László Behán considers that the transformation of the CIO position is not a matter of the future, it has already been ongoing for some time, and the reason is that business began merging with IT.
“IT slowly became part of the business; or, more precisely, technology became an inseparable part of the business. So there was an increasing need for a completely new type of IT professional, who is able to communicate with the business people. Basically the information officer needed to become more and more a business officer and to learn the business. I think that started the transformation that is still undergoing,” Behán says.
But if the CIO will look more and more into business, who will oversee the technology inside the company? The classic CIO tasks will become less relevant, Behán argues.
“IT will become public utility, and it is already happening. Today, office servers do not require extremely high skills to operate; it can be purchased on the market, or as cloud service. It will become less important, like electricity: available anywhere,” he explains.
CIOs will be required in companies where there are highly complex systems in place, in sectors with production, services, banks or public services. The question is, where the CIO will stand in the hierarchy, and what attributions he or she will have in the future, Behán concludes.
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