cio driving digital transformation

The year is 2000. Reed Hastings, the founder of a completely unknown little company called Netflix, met with the BlockBuster executive team, including CEO John Antioco, to pitch a partnership that would have benefited both businesses. We all know the story – Hastings got laughed out of the room, BlockBuster went bankrupt and Netflix is now valued at over $30 billion. Ouch!

At the time, BlockBuster was a well-oiled operations machine that almost seemed too big – and successful – to fail. However, with a business built solely on retail sales, and hundreds of millions in revenue generated from customer-irking late fees; digital transformation was sorely overdue. When John Antioco finally realized the need to drop late-fees and develop a digital presence, he faced immense resistance from his team and was fired. Five years later, BlockBuster was bankrupt.

Where was the CIO of Blockbuster when all of this was happening? He likely wasn’t even in the room, considering that CIOs, who traditionally report to the CFO, weren’t considered key business partners at the time. In today’s digital era, that mindset is beginning to quickly change. According to the 2016 Harvey Nash/KPMG CIO survey, 24% of CIOs were reporting to the CEO in 2015 and 34% in 2016. It’s clear that CEOs are finally beginning to view their IT leaders more as key business partners. As we start 2017, a major goal of today’s CIO is not just IT leadership, but digital innovation – both of which require close collaboration between CEO and CIO to drive impactful change.

It may not stop there. “With their technology background, CIOs are the best positioned of all senior management to capitalize on the global trend toward digital business — from imagining the possible to perceiving potential threats. Just as the digital transformation offers a myriad of opportunities for businesses, we find a unique window of opportunity for CIOs to step into the CEO chair and lead their company successfully into the future,” says Cory Crosland, President of Croscon and seasoned software architect.

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CIOs are turning their focus more to digital transformation and innovation vs traditional tech operational efforts, with 40% of CIOs spending at least one day per week on things outside of IT.

“CIOs are no longer focused solely on delivering the right technology to enable the enterprise, rather they are now the key agent of change for moving enterprise strategy forward,” says Marc Snyder, manager of KPMG’s CIO advisory global center of excellence.

How can today’s CIO successfully be an IT leader AND agent of digital transformation?

Demand a seat at the table

In 2016, 57% of CIOs reported that they sit on their corporate board. This is up by more than half over the last decade, but we still have a long way to go. CIOs that aren’t on their corporate board need to make a solid business case to their executive leadership on why it’s critical they have a place at the table. Today’s CIO can’t afford to be reactive players – they need to play an active part in setting the overall strategic and technical direction of the business.

Evolving is key to surviving

CIOs need to evolve in their own roles if they want to thrive in this new, digital world. In the past, their main role was to review various technologies and report the value of changes to the organization. CIOs can no longer afford to just answer the question of “how can this change help our business save money” but also “how can this change drive corporate growth,  or make sure we stay in business?”

Change for the right reasons

There’s a very real temptation for companies to adopt every new and exciting technology that comes their way. Change for change itself is not innovation. In fact, change needs to be driven by market trends and consumer needs – even if they haven’t vocalized exactly what it is they want or need.

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Facebook is one of the greatest examples of this, as their platform revisions and product releases are often met with intense criticism. However, months later, their customer base has adopted the change, realized it made their experience overall better, and though they may never tell Facebook that they’ve changed their mind, Facebook already knows based on their user data.

Today’s CIO need to be able to do the same. They need to cut through the excitement of hip new technology to be able to make informed recommendations on what is needed for growth and customer satisfaction and what is simply noise. They need data experts to review consumer and market trends to provide insight into where the industry is heading and how they can stay ahead of the curve.

Assembling the right team to drive digital transformation

To pave the way for digital transformation, CIOs need the right team of experts under them. However, 65% of CIOs report a lack of critical technical talent is hindering innovation. The biggest need? Data Analytics experts (39%), particularly those that are skilled in gleaning trends and insights from big data, ie large sets of data.

The other most in-demand skills are Project Managers (32%), Business Analysts (28%) and Cybersecurity experts (27%). CIOs are also expected in today’s atmosphere to prepare for, and ideally prevent, cyberattacks from compromising both data and systems. With a shortage of talent, only 22% of CIO’s report being well-prepared for an attack.

For larger organizations, the addition of a CSO or CISO, can remove this burden from a CIO and help them get back to driving innovation.

Business strategy with a focus on tech

CIOs bring a much-needed technology perspective to the executive leadership team. Technology isn’t just one single department in today’s companies – it now touches everything from marketing/sales to operations. Discovering new digital business opportunities, as well as finding ways to grow existing business lines using their expertise in technology, is exactly what an executive team wants to see from their CIO.

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Listen to the people

CIOs need to realize that ideas for digital transformation can stem from anywhere. Maybe an intern has insight on how people their age use technology that can inspire your data analytics team to look for market and industry trends. Perhaps a significant portion of users tweet about a specific issue weeks before canceling your service. Keeping your eyes open and monitoring all channels for triggers can help drive an organization toward being its best.

Don’t follow the money

A recent report by Exstreamist showed that Netflix was potentially giving up over $2 billion in advertising revenues by not showing ads on its platform. It might be common sense to follow the money and try to squeeze an extra couple billion out of a user base of nearly 100 million. With yearly revenues in the $8 billion range, an increase of an additional $2 billion isn’t insignificant. However, the Netflix data analytics team has likely crunched the numbers and determined it isn’t worth potentially alienating monthly subscribers by throwing ads into the mix. Even informal surveys indicate 79% of Netflix subscribers would cancel or pay more for an ad-free experience.

CEOs often try to chase after the money to satisfy stockholders in the short-term. As a CIO and digital transformation leader, it’s your role to keep your eye on the long-term repercussions and use data and insights to show how that mindset might be potentially devastating.

With the tech space constantly changing and digital startups grabbing more and more revenues from more established companies, CIOs of today need to be more focused than ever on driving digital change. There has never been a better – or more exciting time – to be a CIO.

IT or Digital Transformation Leader: Why Today’s CIO Needs to Be Both
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Elizabeth Becker

Elizabeth is Marketing Manager at PROTECH. Comments and feedback can be directed to her at