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How CIOs can elevate their influence in the C-suite

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5 minute read 19 Sep 2023
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Consulting
Technology

As digital technologies evolve from optional to necessary, it’s time for transformative CIOs to take their seat at the leadership table.

In brief
  • As more and more organizational strategy is underpinned by technology, who takes the reigns in a digital transformation effort?
  • CIOs are extending their responsibilities beyond IT service management to include business strategy.
  • Since they are already part of the business hierarchy, CIOs are often well positioned to lead digital transformation efforts.

During the past decade, companies across virtually all sectors have advanced their understanding of digital technologies, turning what was once an optional differentiator into what is now essential to remain competitive. C-suite-level investment in digital transformation has followed suit. For tech leaders and business executives, continuous digital disruption is no longer a question of why, but how.

How EY can help

According to Ernst & Young LLP research, nearly 72% of global executives surveyed for the EY Digital Investment Index said they must radically transform their digital operations during the next two years to effectively compete in their industries.

 

Meanwhile, 85% of senior leaders have undertaken two or more major digital transformations in the past five years alone, and 67% of those we surveyed said they have been involved in at least one digital transformation during the same period that fell short of business expectations.

 

Despite the fact that ROI can be notoriously hard to measure, digital transformation investment continues to drive CEO and board agendas, and our research suggests that human factors play a major role in the success or failure of that transformation.

 

One of those factors is the continual reshuffle of organizational roles and responsibilities due to shifts in technology delivery models, changing business needs, and a volatile economy. As titles beginning with “C” seem to multiply by the day — COO, CMO, CDO, CTO — corporate technology leadership is at a crossroads with serious implications for the future.

 

At the center of this transition are the chief information officer (CIO) and the chief digital officer (CDO), both vital roles with a voice in the C-suite. When the CDO role emerged about 10 years ago, it was typically aligned with the chief marketing officer as a customer-facing driver to grow the business through innovation, while the CIO was often aligned with the chief financial officer, charged with keeping all systems “go” across the enterprise.

 

It’s not surprising that tensions have arisen between these two roles as they compete for credibility, influence and budget allocation at the CEO level. As digital innovation is absorbed into the broader technology strategy for successful and aspirational companies, it increasingly belongs within the purview of the CIDO as chief information and digital/data officer or — an emerging title — chief business and technology officer (CBTO).

”Companies don’t like to change. In many cases, C-level executives claim that they want to change, but it’s still risky for them,” says Hernan Tabah, EY CDO Advisor-in-Residence. “Driving change is about trust. Then, it’s about moving the rest of organization in the fastest possible way to start trading on the value of the investments that you are requesting or creating, so that it touches everyone in the organization.”

This new normal opens the door for the transformative CIO to leave the back office and take a seat at the executive table with a solid claim to the digital space, often encompassing the CDO role. That convergence of roles can allow CIOs to provide organizations with the vision, disruptive strategy and spending muscle that turn innovation into measurable growth and revenue.

 Who’s doing what?

The organizational purpose of the CDO role is in flux, while CIOs begin to grasp the potential of digital data and analytics to leverage their visibility and clout with the C-suite, most notably the CEO.

Some companies may choose to retain both roles, especially if reporting structure has allowed the CDO to gain the direct confidence of the CEO. But the impact of the global pandemic, followed by the economic downturn, have provided opportunities for forward-looking CIOs to make a move into the digital arena, leading to more strategic and centralized technology operations for their organizations.

The CIO role is evolving at different speeds across industries. For instance, in the government and public sector, as well as energy — oil, gas and utilities — a lag in digital technology progression tends to keep the CIO’s head down, focused on maintaining the status quo. But health care is beginning to catch up, while the consumer sector leads the trend toward a more strategic CIO leadership role that embraces digital as a matter of course.

Moving forward, the most influential CIOs will combine a keen ability to identify, understand and implement emerging innovations while managing an expansive tech investment portfolio on the day-to-day operations side of the house — much of which can, and should, be offloaded to trusted counterparts within and outside the organization.

There are a few key areas where a strategic blend of resources can free up CIOs to play a higher-impact role for their CEOs and their companies.

Pay off technology debt

For visionary, enterprising CIOs, legacy technology debt is a daily drain on their power source. Outdated systems, substandard software platforms and thousands of lines of old, unnecessary code drain the CIO’s agility and attention, keeping their heads down in the back office and inhibiting their ability to look up and forward. An investment in technology transformation with a relatively small on-premises footprint can alleviate that pressure on the CIO and open up new possibilities for innovation.

Get the right guidance

Undertaking a new enterprise resource planning (ERP) can be daunting and time consuming. Off-the-shelf or custom? Which alliance partner? What if the investment fails? With the right collaborators, CIOs can save themselves valuable time and their organizations money, allowing a blend of external and internal resources to do the heavy lifting so they can keep their eyes on the big picture, with the confidence they are advising the CEO and the business for maximum benefit and revenue growth.

Define roles and responsibilities

The most successful CIOs will work in tandem with other executive officers while maintaining ownership of the technology enterprise, including investment in emerging digital technologies to drive both revenue and organizational efficiencies. The CDO may serve as a trusted advisor, with customer interests as their mandate.

"One of the things that you need to learn — and you learn it the good way, or the hard way — is that priorities can align very fast at the top, but different areas of the organization will change at different speeds,” says Tabah. “Marketing and sales could change at a very high speed, while supply chain will change at a slower speed. When you build your digital strategy, you’re committing to new capabilities with both top- and bottom-line impact."

Summary 

As digital technology transformations become business as usual, there is a window of opportunity for CIOs to elevate their influence in the C-suite. Companies that remain heavily reliant on a CDO for digital innovation could benefit from stronger CIO leadership with a voice at the CEO level. 

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Authors

Related topics
Consulting
Technology

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