Will you need a CIO by 2020?

The title of my new blog post is provocative. Why would I ask such a question, especially after covering a number of CIO surveys, trends, and thought leaders, and underlining the strategic importance of IT in this very blog? 

I am asking this question because the IT landscape as you and I know it is changing and changing fast. Even by IT industry standards, the pace of recent developments is remarkable. The business technology is undergoing rapid evolution. And the central argument I am presenting here is that the conventional role of CIO or CIO function as it stands today will either be ineffective, redundant or outdated and hence not required by end of this decade. Let me explain...

There are a number of reasons and drivers for the rapid evolution of business technology. However according to me there are five major forces which are influencing this evolution. They are business services, application services, business analytics, consumerisation of IT, and cloud computing. I will try to explain them briefly.

Rise of business services

Awareness of the fact that, ‘Organisations purchase technology to fulfil business needs’ is growing like never before. Given economic challenges very few organisations can now justify technology investment for pure technology advantages. Your CEO, COO, CXO and CFO will be demanding ‘Return on Investment’ (ROI) and ‘Value for Money’ (VFM) from each £ invested in technology and they will most likely be demanding that in year one. Days of five- or even three-year technology payback are certainly behind us. And this is where purchasing business services independent of large technology investment is becoming so attractive. There are a number of examples of this trend, ranging from payment processing to HR processing.

A test question for you - If you were CEO of a mid-size organisation, would you invest £5 million in back office processing software, hardware, network, back-up, security etc.? Or would you sign up for business outcome based contract with niche business services supplier? I know your answer and mine is the same!

Maturing cloud computing industry

Enough is written about benefits of cloud computing (including this blog) so I won’t repeat it. However it is safe to conclude that cloud is more than hype. It is real and there is an entire industry being built around cloud propositions by all major IT vendors as well as rising number of niche players. Cloud computing, if adopted in right manner, frees your organisation from capital-intensive infrastructure and operations investments. The business justification will not be far different from the arguments I have listed above. Cloud computing, however, gives organisations the added flexibility of being able to build solutions to suit their requirements, yet allows them to offload its capital and resource-intensive aspects to infrastructure specialists. It can be easily argued that business services are a variant of cloud computing.

Another test question for you - You are a CFO of retail chain and you have a legacy retail management application. Your peak business transactions are expected only in the months of March, September and December but for all other months you operate at half the transactions of peak. Would you like to scale up and down the capacity and hence the cost of your retail application operations? I know your answer and mine is the same!

Business analytics coming of age

A large number of small niche companies and even large companies like IBM and Oracle are investing millions in developing and enhancing business analytics products and services and they are doing this for a very good reason. People like you and me (and multiply that number by millions of Indians and Chinese) are adapting to self-service shopping lifestyle. When was the last time you went into your bank branch? Or when was the last time you bought a book in a book shop? When was the last time you called your airline or visited its city booking office to purchase your airline tickets? I know your answer... we are relying more and more on smart, intuitive ecommerce sites, price comparison sites, shopping portals, kiosks, ATMs, etc. to buy everyday things of need and occasional things of desire. The merchants are looking for smarter ways to know you, your preferences, and your wish lists, and to keep your loyalty. This is true for brick-and-mortar businesses too by the way. And smart merchants are turning to business analytics to make more sense of their business transactions, shopping patterns, supplier dependencies, seasonality and thousands of other trends which affect their business.

Another test question for you - if you are a mid-size or small company COO running a brick and mortar plus an ecommerce portal for your business would you rely on your in-house MI experts to keep up with 1000s of changing patterns, equations, behaviours and trends? Or would you secure an external niche business analytics company to analyze tons of your business transactions, do the number crunching and present predictions for next quarter along with benchmarks? I know your answer and mine is not too different!

Popularity of application services

This may be very specific development but worth making a note of. You may recollect my earlier blog on ASOS and how smartly they are leveraging open access to their applications of catalogues. The Apple App Store is another example of this model. These smart technology and business models are making middleware software, hardware and tools almost redundant by giving core access to application tier of your business systems. Your suppliers and partners deliver direct to your application and data tier, why bother with message brokering? See my proposed revised retail reference architecture and you will know what I mean.

Let me not ask you a question but pass you my verdict on this one: No I don’t need an internal IT department to develop interface to launch my catalogue on Apple App Store. I will go to a niche small firm who will do it for me at fraction of the cost, to much better response times than an internal development and test department.

Spread of technology consumerisation

Again enough is said about Apple iPad, Amazon Kindle, and Android smartphones. The fact is, if you are reading this you have either all, or a minimum of one of them. And I know that you would prefer to carry your own iPad to work and do your office email and documents, as well as look for the best place for Thursday after-work drinks on Google maps on one of those boring conference calls. And if your organisation is not funding your smartphone then you do not mind getting on an attractive tariff to join swelling ranks of smart next-generation mobile workers. I am not even mentioning Google Docs, Microsoft Office 365 and other similar offerings which liberate corporate IT.

You know where I am going next. If your data privacy and security concerns were addressed, would you mind if your employees brought their own IT equipment to work? I would not. If I were CFO of a business which made a double-digit loss last year, I would not understand why I should pay three times for a desktop compared to retail cost of iPad!

To quickly summarise my argument - given these very influential forces that are shaping the world of business technology, and the fact that they are here and will be growing in their influence... and their strong commercial as well as functional advantages, how long before your conventional CIO function turns into an outdated, ineffective and irrelevant cost centre? If the trajectory of this evolution continues like this, will your organisation need a CIO by 2020?

This blog post appears in the ebook Management Skills in IT.

About the author
Amitabh is a senior enterprise architecture practitioner who specialises in business and technology strategy definition, governance, architecture as well as methods and tools. He is an active industry networker, blogger, speaker and contributor to the advancement of enterprise architecture discipline. Currently he is the Chief Technology Officer in Fujitsu Services Private Sector Division.

See all posts by Amitabh Apte
November 2017
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