Dubai

Over the next three days, more than 200 of the region’s leading CIOs will gather at IDC’s Middle East CIO Summit 2014, with the key focus of discussions centering on the theme ‘Being a CIO in the New Business World of Tech+ Transformation’. IT has matured through the first platform (mainframes and terminals) and the second platform (client/server and internet) and is now entering the era of the third platform (mobility, cloud, big data/analytics, and social business). Each era has brought uncertainty about the future of the CIO and the IT organization, and the CIO’s role has had to change profoundly as he/she has acquired new skills and taken on a broader leadership role in the enterprise.

IDC’s latest findings indicate that over the next two years, more than 70 per cent of CIOs will change their primary role from directly managing IT to becoming innovation partners who deliver information insights and value-added services to the enterprise. Also, the adoption of third platform IT technologies will have redefined 90 per cent of IT roles by 2018. It is now time for CIOs to examine their current roles and come to an understanding of what is expected of them. CIOs must adapt to what they think their role should (or should not) be, and other corporate executives must shape their own expectations about what the CIO role and accountability should cover. As with everything related to ICT, none of the CIO’s current responsibilities are set to disappear — these are very much “new” responsibilities.

In the past, boards of directors had a limited interest in IT. But this is changing rapidly, beyond the parameters of corporate responsibility, audit, and compliance. The CEO demands externally facing business strategies, such as knowing a company’s market, understanding customers’ concerns and identifying new revenue opportunities. With cloud, Big Data, and social business, the new focus is external. Moreover, their interests are increasingly being driven by new business opportunities material to the bottom line and emerging risks posed by the intensifying cyberthreat landscape.

In my view, CIOs must better understand other executives’ points of view, knowing that communication is essential for building credibility and trust. In the era of the third platform, line-of-business (LOB) managers will once again exercise the ability to directly control the acquisition of new technology, thereby initiating a decentralization of the IT organization.

It has been at least 20 years since the IT budget represented the near total of technology investments by the enterprise. The emergence of vendor solutions that combine critical business functionality with a built-in IT component accelerated the process of distributing IT spending across the enterprise. More recently, the emergence of the 3rd Platform has created a sense of urgency among executives to adopt new ways of doing business — to move from a make-sell approach to a sense-and-respond model. IDC sees this trend accelerating as businesses increasingly turn to vendors to provide services for mobile, social, Big Data, and cloud services, leaving the CIO in the position of having to fight for relevance in the decision-making process. The net result, however, is that CIOs will have to find ways to fund investments in new IT skills while lowering the cost of existing operations and maintenance, or else they will see an accelerating movement of funding for the third platform from IT to the line of business.

Several interesting changes are likely to take place over the coming few years, namely:

New types of CIOs will increasingly come from non-IT organizations: general management, marketing, finance, or LOB.

In the next 12 months, the CIO will have to become an innovation partner and negotiate accountability for mobility, cloud, and Big Data.

The lack of availability of third platform skills will constrain CIOs’ ability to deliver innovative business capabilities and will inhibit the uptake of projects for the next three to four years. Other executives, especially CMOs, will independently acquire and deploy new information and technology services that CIOs will have to integrate. LOB and functional organizations will invest significantly in educating their teams, creating sandboxes and trial projects.

CIOs will be overwhelmed by security and the compliance consequences of a fast-growing level of risk. They will be overwhelmed by ensuring the integration of independently purchased 3rd Platform solutions.

CIOs will accelerate rationalisation initiatives and redefine the IT spending model in order to allocate money to integration and innovation. Enterprise architecture teams will extend into the business and functional organization.

CIOs will retain control of business-critical applications, enterprise-wide initiatives, legacy environments, and internal datacenters.

Following this change of role for IT, CIOs must figure out ways for their departments to be involved in projects and be viewed as valued business partners. The jury is still out on the future of the zero-capital IT model, but capex practices are changing with an aim toward tightening up the processes associated with IT investments. CIOs must drive this discussion, as opposed to being passengers in the CFO’s agenda. The IT workforce of 2020 will look dramatically different than the workforce today. It will require a greater focus on the management of IT systems than on the development of IT systems, and organizations must put the necessary programmes in place to grow the hard-to-find talent they will require over the next 10–20 years.

It’s going to be an exciting decade.

The columnist is Group VP and Regional MD for the Middle East, Africa, and Turkey at global ICT market intelligence and advisory firm, IDC.