CIO Role Redefined
May 31, 2009 by Raj Sheelvant
At the sixth annual MIT Sloan CIO Symposium, the current role of CIO in an organization was challenged according to Linda Tucci in CIO.com article titled “Experts: CIO moving more into business, process optimization”. She writes that what companies really need is a Chief Simplicity Officer, someone who can commoditize IT services that offer no competitive advantage and free up IT staff for business projects. Indeed, as utility computing moves to the cloud, CIOs will spend less time running IT and focus instead on figuring out how IT can run the business. It’s very important for the CIO to identify and quarantine ‘commodity’ IT within an organization and either outsource it or move it the cloud. At the same time, CIO also needs to identify those IT services and software applications that automate, simplify and standardize business processes that provide competitive advantage to the company.
The common thread at the symposium according to Linda was that CIOs must figure out how to optimize the business through IT. As IT becomes embedded in the businesses, the question CIO needs to ask is how IT affects the organization, where does it widen the moat of competitive advantage. Take Google for example. It has now become an advertisement auctioning company. Google had complex algorithm that simplifies and automates the auctioning process. That is their secret sauce. Other commodity type IT applications can be outsourced or pushed to cloud. Software and IT team at Google need to focus only on streamlining; simplifying the algorithm because auctioning advertisement is the main source of revenue generation for the company.
In the 1990s the role of the CIO was to install and build IT infrastructure. In the early part of 2000 after the dot com bust, the role of the CIO was to reduce IT overhead costs. Now, in this new recession, CIOs are asked to reduce total overhead costs. But very few organizations are looking at how IT can improve competitive advantage for the company to keep it profitable in this relentless race to the bottom. As reported, the CIO symposium’s goal was to encourage organizations and CIOs to start focusing on how IT can add value to the businesses. I wonder how many CIOs will take it on to them to learn the company strategy and the role of IT to augment strategy. Those that do will be setting their organization to be competitive in the long run.
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