So far, we have unpacked three dimensions of our Digital Competency Model: Strategy, Organization and Culture. The race to digitize has confirmed the CIO’s role as a defining one in modern business. The bandwidth to ‘stop missing out on digital opportunities’ at minimum, and to ‘transform business models through digitization’ at best, distinguishes this from other corporate roles.
Yet digital leaders are too often ‘voices in the wilderness’. Boards broadly appreciate digitization and its ambassadors. But too few are sufficiently literate in the domain to give it the traction it needs. Our study found that whilst 69% of digital leaders say their boards prioritize digitization, only 28% feel that their boards fully grasp its meaning and scope. And only 41% understand the challenges faced by digital leaders, and support their efforts.
Enter the ‘T-shaped’ CIO profile, bridging leadership capacity with a robust technical skillset. However, only half of the digital leaders we surveyed really think they have digital DNA. Whilst this is gap is probably an outcome of the T-shaped profile, it naturally leads us to our final chapter: channeling technical competence into six core facets.
1 – Digital DNA
Key question: Is digitization a core competence and ‘sweet spot’ for me?
The best CIO’s have a highly-developed digital DNA that completes their leadership role as a bridge between technological advances and organizational challenges.
The digital leader should be able to find compelling and forward looking answers to the big questions: “how will digital disruption precisely affect my industry and business? How fast will it happen? What are the essential next actions needed to redefine my company’s role in the digital world of tomorrow?” (Deloitte 2015).
As a digital-savvy evangelist, the CIO embodies the power to shift a company from traditional processes and structures into its new, digital future.
2 – Cloud Concepts
Key Question: Do I have a clear and up-to-date understanding of cloud concepts and applications?
Cloud concepts are a key expression of IT optimization. Understanding and implementing transformation in the domain is one of the most important assets a CIO can leverage.
Cloud computing differs from more traditional approaches to IT by processing data through innovations such as virtualization, application containers, and serverless computing. These allow an elastic use of IT products and services, while reducing costs. As such, cloud concepts enable agility.
The cloud ”makes use of computing resources on an immediate basis, rather than a need to first invest time and skilled resources in designing and implementing infrastructure (hardware and middleware) and/or applications, and then deploying and testing it.” (Cloud Standards, 2017). But its benefits won’t materialize if business leaders fail to match it with a company’s IT environment. It is the CIO’s role to map digital capabilities and strategically engage business processes with cloud concepts. From getting closer to customers, increasing sales, to sharing data with important third parties, the right digital leadership enhances the integration of cloud concepts into the wider business strategy. As such, the digital cloud becomes a true rainmaker to fertilize organizations.
3 – Data-driven Decisions
Key question: Am I clear on how to harvest big data in a way that supports management decision-making?
He stresses that the digital leader plays a unique enabling role in shifting data use towards a significant strategic asset, including creating value through analytics. Wiseman (2017) also cites cases in which solid data is leading to a more informed, responsive and efficient decision-making process in governmental affairs.
As big data gets ever bigger, it is the CIOs responsibility to assure not just quantity but quality, building a trustworthy resource that makes sense for related departments, from HR to marketing (Bhandari 2017). So efficient data management in today’s complex competitive landscape is one of the leading CIOs most outstanding capabilities. She is in charge of adapting and reinventing IT assets, working at a rapid and smooth tempo, in step with business strategy.
4 – IT Architecture
Key question: To what extent do I feel confident overseeing the design of IT architecture?
MacCormack et al. (2015) express IT architecture as the competence of ensuring that diverse information systems and other IT components run along a company’s goalsetting lines, by providing agility in business.
In comparison with enterprise architecture, IT architecture “implies a more “bottom-up” approach to design”; the aim is to create systems that can sense and respond to unpredictable challenges.
As mentioned, data management is a powerful expression of IT architecture. The CIO links IT experts and data analysts with executives, placing data-related issues at the center of the business agenda. As he facilitates these interconnections, the CIO becomes accountable for the architecture of digitization processes (Lee et al. 2014).
5 – Security
Key question: Am I up-to-date with security needs, regulations and processes across our operating markets?
The overwhelming advantages of the effective use of data and IT assets also carry potential, significant, pitfalls. Part of the architectural role of a CIO is to ensure data privacy and security.
This is particularly important, given that “increasingly corporations are the target of malware and cyber security attacks that result in the capture and possible exposure of sensitive corporate and customer data, lost revenue and litigation” (Bhandari 2017).
CIOs should scrutinize technological advances with a toothcomb, to avoid, at all costs, the deviation of innovation into major threats. DalleMule and Davenport (2017) set out a core paradox; data is both a need and a weak spot for business. They present data defense as a key tool to minimize risks; “ensuring compliance with regulations (such as rules governing data privacy and the integrity of financial reports), using analytics to detect and limit fraud, and building systems to prevent theft”, as well as to “ensure the integrity of data flowing through a company’s internal systems”. They recognize the significant contribution of the CIO as astarting point but emphasize the need for a coherent strategy to follow the speed of tech-related threats. It is the role of the CIO, as the ambassador of digitization processes, to reinforce the adaptability and dynamism of that strategy.
6 – Vendor Management
Key question: Am I competent in managing large-scale vendors/suppliers?
And so we arrive at the last, critical item of our model. Digitization, attached to an effective and safe set of guidelines, should walk hand in hand with strong external relationships.
Vendor management can be described as a discipline to obtain as much value as possible from contractual arrangements, ensuring that clients get the desired services or products (Deloitte 2012).
This implies assertive communication with all parties involved in an operation, from contractual agreements, to finance and risk, ensuring any issues are promptly identified and solved. Vendor (and supplier) management is a crucial element in the supply chain of IT services, one that includes clients and partners. These interconnected relationships are crucial for business success.
Given this, the increasing attention paid to vendor management by top executives is hardly suprising. It is vital to “enable the operational transparency and process consistency needed to drive business benefits such as enhanced data analytics and customer insight” (England 2016).
A competent CIO reconciles vendor management and digitization, applying strong management principles that generally apply vendor processes to digital tools, as well as inserting digital innovation into high profit outcomes.
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