The role of the CIO has changed at warp speed. Today’s CIO has been thrust into new responsibilities, brought on in large part by the pandemic. In 2021, 96% of CIOs reported in an IDG survey that their role was expanding beyond traditional IT responsibilities. Not only are CIOs expected to manage in-house solutions that run the business, they are increasingly focusing on revenue-generating product development.
A survey by the International Data Group found that out of 800 IT leaders at tech firms, 81% of CIOs now see developing revenue-generating products as part of their agenda. Furthermore, 68% of CIOs across “non-tech” companies also have responsibility for revenue-generating software product development. “CIOs must prioritize digital initiatives with market-facing growth impact,” said Janelle Hill, Distinguished VP Analyst, Gartner. “For some CIOs, this means stepping out of their comfort zone of internal back-office automation to instead focus on customer or constituent-facing initiatives.” The question is not whether the CIOs are ready for this, but whether the business is ready for the change.
Pro tip #1: Be prepared to run into resistance and/or resentment as you move from cost center to the revenue generator. Don’t let it deter you.
I’ve seen the need for this change firsthand. It comes down to three things: technical proficiency, visionary capabilities and organizational support. Many tech leaders possess the technical proficiency and even the visionary capabilities to build the products of tomorrow, but they often lack the organization support to move toward a product mindset.
Pro tip #2: Building an inclusive cross-functional team across the enterprise adds immense value to the product itself and to the process of organizational buy in.
It’s one thing to roll out a new internal application to support business functions with captive users, but it’s another to get the entire business to think and act like a software company. This organizational change requires CIOs to re-orient their own departments to think like a modern software company. A cultural shift of this magnitude requires IT staff and business support staff alike to seek and absorb market feedback, act quickly on high priority items and iterate the process over and over again. Likewise, business leaders outside IT must encourage adoption of completely new tools and new ways to work.
While I’ve seen many examples of this shift, one stands out. We worked with a client to develop an augmented reality tool that integrates with the customer’s smart phone. The customer-focused solution puts more power and control into the user’s hands, making it more convenient and removing much of the face-to-face interaction that was previously required.
Pro tip #3: Make sure to get the impacted department’s fingerprints all over the product solution, especially if the impacted group is the sales organization.
A software product-minded company would see this as a huge advantage over the competition, which are still operating in an analog world. However, in a traditional business such as this one, the sales team can be a hold up in the adoption of new technology. The sales consultants felt threatened by the technology and loss of control this product created because they no longer controlled the demo of the product. In this case, sales incentives were required to overcome the resistance to a new digital world.
Pro tip #4: Perfection is the enemy of progress.
Likewise, the IT team’s role changes as well. They need to adapt to a much faster feedback loop from a set of customers who are not required to use the product unless it meets their needs, unlike a product developed for internal use. As product builders, the team must fully embrace the concepts of an open mind and intellectual curiosity. In other words, they have to refrain from being “the experts.” In conjunction with this open mind the product team must adopt a continuous improvement and continuous deployment mindset. If not, the product will inevitably be delayed, fall short of expectations and likely fail in its business objectives.
So, the question for CIOs is “how do you gather the necessary support from business leader peers to drive organizational change?”
The answer lies in the adage of “getting a lot of fingerprints on the gun.” As mentioned before, CIOs must think about the full lifecycle of the product, investigate all the various use-cases and make sure that all leaders needed for success are part of the solution well ahead of product launch. This is where digital native and software companies have the edge on the traditional companies. With software companies everyone knows how they make money and are laser focused on doing just that. Unfortunately, most traditional companies have a long history of selling products without the addition of software and associated services and this will become a threat to certain groups.
The good news is the pandemic has put “we’ve always done it that way” refrain out to pasture. Digital strategy has been accelerated by several years and traditional businesses are seeing opportunities to create their own software products to drive growth. Now is the time for CIOs to embrace their new, evolving roles and responsibilities. This means thinking about how they can become change agents, as well as the tech visionaries, for the organization and accelerate the pace from analog to digital speed.
About the Author:
As Sparq’s Chief Executive Officer, Monty Hamilton leads the executive team and drives the company’s overall strategy. Sparq is a unique digital engineering company focused on helping its clients realize their digital transformation strategies and creating thousands of technology careers in places where they otherwise would not exist. Monty has helped grow the firm through two private equity investments to become the largest privately held digital engineering firm with colleagues across the US and Latin America. He is a sought-after speaker on the outsourcing and domestic sourcing topic and has recently been featured on CNBC, BBC, NPR radio and at various industry conferences including IAOP, Gartner, Digital Georgia and others. In addition, recent articles depicting Sparq’s innovative outsourcing model have appeared in Business Week, CNN Money magazine, CFO magazine and CIO magazine.
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