The CIO - A Key Influencer in the Connected Era

Momenta Partner’s Randy Krotowski, the former CIO at Caterpillar and Chevron, discusses the challenges, role and influence of the Cheif Information Officer (CIO) toward driving digital transformation.  

Success in the connected era demands transformational business changes with the CIO embracing a role that is broader and more influential than ever before.

In this post we explore how the CIO is charged with keeping abreast of the new opportunities and threats brought by the Internet of Things (IoT) and needs to be well positioned to share that insight with the business. We also discuss how the CIO is responsible for building the technology the business needs to respond rapidly, whichever strategic direction it decides to take.

The connected era: the most complex era yet

We have seen the CIO’s role and influence change dramatically over the decades. In the mainframe era, the CIO had full control over all the company’s technology. Then came the client-server era, when users gained a personal computer and the ability to run their own software. The frustrated CIO’s influence was starting to diminish. The dot-com boom came next.  The business focused on reaching customers through the new channels, pulling influence away from the CIO and putting it into the hands of the marketing department.

Through each of these eras, technology became more pervasive throughout the business. And each created dramatically more complexity and magnified the challenges faced by a CIO by orders of magnitude.  As such, many CIOs focus increasingly turned to running the business – maximizing productivity, optimizing process and minimizing risk – a sound understanding of business operations became imperative.

The connected era is no exception. As information technology (IT) and operational technology (OT) converge, the CIO has to take care of the volumes of OT data brought about by IoT along-side the vast volumes of IT data integral to the connected products and services delivered directly to customers. Add to that heightened concerns around cybersecurity as IoT adoption grows.

Transforming whole industries

From a business perspective, IoT is opening up new business models such as the ‘X as a service’ business model that is seeing companies shift from offering products to offering services relating to digitizing their products. But many of those new business models are still emerging and what they will look like is still far from clear.

Take the automotive industry as an example. Here the novel transportation-as-a-service business model has brought success to disruptors Uber and Lyft. If you next combine their services with autonomous vehicles, you can imagine a future where people simply call up a car when they need to go somewhere. It arrives in 10 minutes to take them to their destination.

This new model significantly reduces the number of individuals actually owning a car, potentially below 20 per cent.  What then happens to the car companies we know today? Do they simply become a commodity supplier of transportation units?

The potential IoT has to offer is immense. The successful companies of tomorrow will be those that have already begun to speculate how their own industry may evolve in response to IoT and to invest in one or more possibilities.

Exploring possible futures

Individual executives each have a role to play. Each must pay attention to what is happening in their industry from their own perspective: monitoring the emergence of new channels, markets or competitors, for example.  Coming together from time to time is critical to paint a complete picture of the business landscape. Only then can the business as a whole understand what it might mean and share out responsibilities for making change happen.

As the person responsible for keeping abreast of the new opportunities and new threats brought about by IoT technology, the CIO has a critical role to play – a role that is more strategic than ever before. Some CIOs are already thinking about where the business is going and the role technology will play. Others just love the technology and the opportunity to explore all the possibilities.

Either way, CIOs need to be able to talk to the rest of the businesses about what might happen, what technology can do and what this might mean. There are a myriad of questions that they can help answer:

• What does IoT mean to our industry and our company?
• How do we position ourselves?
• How do we make sure we’re ready to move when the time is right?
• What role will our existing legacy systems play?

More than that, the CIO is also responsible for building and managing the technology that underpins the answers to these questions.

Fresh challenges for the CIO

The CIO now faces a number of new challenges. Firstly, they may not be well-equipped for those conversations since historically they haven’t been involved in discussions around how the business gets into new markets, what its products look like, who it should partner with or acquire or even how it should operate.

The second challenge for the CIO is how the company views their role, which in turn defines what scope they have to influence strategic conversations. A progressive company that views technology as an enabler will give the CIO more latitude than a company that only sees technology in terms of operations, networks and data.

More than that, the new business models themselves are making it dramatically easier for other parts of the organization to not involve IT in conversations. After all, historically IT’s focus has been internal, on operations, rather than the products offered externally to customers.

A significant transformation

Everything is interconnected today. Service-based business models typically affect numerous parts of the organization. Companies can no longer afford to have any business unit operating as independently. IT must be involved in strategic conversations.

Making the transition to operating as a single ecosystem is no small challenge; it requires a significant cultural shift. Some organizations are already transforming, seeing technology as an enabler and bringing the CIO into the discussions around business strategies. Some CIOs are evolving into the new role rather than remaining focused on managing everyday operations.

There will be winners and losers along the road. Some companies will survive the transformation and others will disappear leaving the world to talk about what they should have done. Equally, some CIOs will evolve and others will not.

I hope this has given you some insight into how the challenges, role and influence of the CIO are changing as we move into this exciting new connected era. If you are interested to discuss or simply learn more about the CIO's role as a key influencer, please get in touch.

In addition to being a pioneer in Connected Oil & Gas and Transportation, Randy has a broad digital-industrial background that spans operations, capital projects, marketing and technology. He has led large-scale digital business transformations at Fortune 100 companies and helped industry leading IoT companies with market penetration and growth. Within Momenta’s Advisory practice, Randy leverages his extensive Connected Industry experience gained during 34 years of helping companies compete through technology to help Connected Industry companies prepare for digitization.