A tired IT joke suggests that CIO stood for “Career Is Over.” The CIO role was a slow progression or more often a lateral hire into what was a company’s most senior technical role. It was also least respected member of the executive team.
Many CIOs came from non-technical roles because peer business executives wanted a peer who had perspective on negotiating hardware and software contracts. Often CIOs were lawyers. The good news is that CIO is now “CIO Is Over.” That role will not last another 10 years, and in its place a customer-centric executive will arise.
How Did We Get Here?
The role of the CIO is relatively new to the corporate world. Prior to the late 1980′s the role didn’t truly exist or make much sense. The rise of corporate desktop computers and adoption of “cheap” technologies created an economic need to have a senior executive in charge of such a large capital asset. It’s not a wonder that many CIOs report to the CFO rather than other C-suite executives. With the drop in cost of computing power and an almost insatiable appetite to consume it, CIO span of control rocketed.
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The role became a legitimate peer to other corporate positions in internal influence. Spend for the average IT budget was initially around 2 – 5% of revenue. As compute hungry end-users demanded more and the need to move to an increasingly connected ecosystem of suppliers, partner and customers budgets increased. The CIO was becoming a center point of corporate and externally facing activities in the executive suite.
Then two key things changed over the last few years. The economics of the situation and corporate culture.
What Was the Tipping Point?
If we split IT into Corporate Services such as end-user computing (desktop and productivity) and Email from the Core Business Services (e.g., Shop Floor, Membership Management, eCommerce, Point-of-Sale), we see infrastructure lead services are moving outside of the traditional data center. As an example, today Microsoft leads the corporate email and collaboration space with better than a 50% market share and represents 360+ million mailboxes (or user accounts) worldwide. Cloud based mailboxes (via their Office 365 platform) make up about 15% of their existing market share.
The industry analysis firm Gartner recently said Google’s corporate cloud based email market share is growing (“Choosing a Cloud-Based Office System: Google vs. Microsoft”). The market is shifting and cloud based infrastructure is compelling. Costs are fixed for servers, disk space and licenses. Updates and patches require little support form traditional IT thus freeing up time, spend and talent on what should is increasingly becoming a turnkey utility. While some industries such as Financial Services have more complex needs those can be more directly addressed with specialty services.
How long before most of corporate services infrastructure is all cloud-based and outsourced systems? The economics make it increasingly difficult to justify the cost of building or maintaining your own vast server farms. In a large enterprise (>$1.5B USD in revenue) the cost to deploy said infrastructure can be more than 50% of the IT budget. Invested costs of building vast infrastructure are shifting and analysts suggest that by 2020 more than 50% of infrastructure will be outside the data center. Once piece of spend is gone, responsibility could be moved to a pure procurement or facilities management function. Not much left for IT and its chief executive to run.
The second driver is the increasingly connected employee within the enterprise. Business and end users are no longer satisfied with the speed of deployments or the choices in technology. With consumer technologies such as tablets and smartphone out evolving what could be reasonably put on a corporate desktop it’s not a great leap to see why end-users are rapidly in a BYOD (Bring Your Own Device) mindset. That model is soon to be replaced by a BYOX, where X is anything from productivity software (e.g., Google Apps) or personal mobile hotspots. Users become more self-sufficient and the infrastructure CIOs provide is increasingly managed by someone else. In order for IT to remain relevant CIOs must evolving their teams, skills and processes.
Who is the Chief Customer Officer?
With a declining need to build and support Corporate Services and an increase in building an ecosystem, the CIO role shifts from the librarian role of Information Management to Customer Enablement. The new CIO or CCO must be customer facing, market savvy and a Type A with a highly collaborative personality. Customer engagement, whether it’s B2B or B2C will be everything. Future executives made up of today’s 20 – 34 year olds have a different perspective on buying good and services. By the 2016 election that they will make up 40% of the voting public and have significant economic impact.
The CIO must come prepared to entertain. Their role will be to delight and excite customers (internal and external) with services that unlock enterprise assets and provide them through a value added series of modern services and applications.
The Chief Customer Office would be responsible for areas such as:
- Customer Retention
- Partner Ecosystem
- Enterprise Asset Enablement (e.g., Big Data deployment and analytics, Workforce Mobility)
- Collaboration and Employee Knowledge Management (I don’t believe there is such a thing as Enterprise Knowledge Management, and that’s a subject for another time)
Is this all just semantics? Perhaps. However, the span of control for a CCO touches and strongly influences revenue and people retention in a very broad manner. This is well beyond the current role of a CIO.
What are the Opportunities?
This is all good news for the current generation of techies on the journey to CIO or CCO. Technical skills are still important and now on the path to what are now several different and exciting executive roles. Those that desire the role of a single contributor are well assured that those opportunities continue to exist for many years to come. For those seeking to have broader impact and visibility now have some line of sight to bigger roles. From there, the CEO role is a matter of demonstrated ability and market success.
What do you think? Another 20 years of the same old, same old? Or an evolution in the corporate food chain?
Date: May 28, 2013