The role of the CIO in major businesses has changed indelibly in a very short period of time. That much is obvious. Go back just a few years and it was still largely a technical function, concerned mostly with buying and building software, managing networks and integrating systems. “Build, deliver, maintain”: That was 90 percent of the job.

Now, the requirements of most CIOs are almost unrecognisable from that position. The CIO has moved firmly to the center of almost every organization’s strategy, business effectiveness, customer-focus and market capability. The modern CIO must be attuned to the needs of the company’s customers and be at the forefront of devising new ways to capture business. No more can CIOs build systems and then tell the organization “what the IT can do”; now the business makes demands and the CIO must build or source technology to meet that market need. The model has been turned completely on its head.

A changing landscape for IT

Viewed objectively this is no surprise, of course. Within a few short years, information technology itself has been catapulted from a role as facilitator of business — a “technological filing cabinet” — to becoming the lifeblood of the organization. IT is no longer where information gets archived and where knowledge goes to die; it’s where “the business of the business” is done and is often the critical competitive edge for the company. It’s where the business interacts with the marketplace, where products and services are innovated and where communication and collaboration (within the company and with customers) actually happen. For many organizations in this digital era, the change has been even bigger than that: IT has often become the product itself, as the business strives to compete with new online offerings, smartphone apps and e-commerce options.

All of this has created endless complexity for CIOs and a complete change to the job description. When I go into businesses now, I see a job that has become a balancing act of profit margins, competitive strategies and executive demands — and a CIO function that is now expected to focus laser-like on bottom-line growth and customer value.

The people management revolution for the CIO

Not only has the CIO had to become more business-literate, they’ve had to become more people-literate. One of the biggest changes for IBM is that it’s no longer just the IT department procuring technology — it’s every part of business. So the CIO of today has had to become a skilful political operator, someone who can “manage management” to get the best return for the company’s IT investment across every business line. On top of this, staffing and skills requirements within IT teams now change so often that, for the CIO, it can be like struggling with a Rubik’s Cube: Solve one side by building an IT team with specific skillsets; solve a second side by outsourcing a delivery component to an external supplier or into the cloud … and suddenly you find that you’ve messed up the first side — an IT team with all the skillsets you just outsourced.

What the data tells us: CIOs are focused on margins and growth
At IBM, we’ve not only seen all this with our eyes, we’ve seen it with our data too. In our 2011 CIO Study, The Essential CIO (surveying over 3,000 CIOs worldwide), we tracked fundamental changes in the function in recent times.

Between the same studies in 2009 and 2011, the CIO’s agenda has changed completely, nowadays approaching much closer to the priorities expressed in the parallel studies we do with CEOs. (For the first time, the two have the same top three focus areas: Strengthening relationships with customers; developing the skills of employees; and gaining insight and intelligence from data.) And when we ask CIOs about their core current priorities, business analytics and business process management are the issues top of mind for almost everyone — a clear sign that CIOs want to mine the vast explosion in internal data for the organization’s profit. Meanwhile, their high prioritization of mobility solutions reflects not just that a range of technologies are changing our ability to work on the move, but that the efficiency of these solutions offers potential for offsetting the costly overheads of a globally mobile workforce.

Most interestingly of all, since 2009 we have seen cloud computing shoot up the agenda for CIOs. Three years ago, it was seen as a “maybe”. Now there’s no “maybe” about it. Sixty percent of organizations are ready to embrace cloud computing over the next five years as a means of growing their businesses — nearly double the number of CIOs who said the same thing in 2009. Cost, once again, is driving the CIO’s agenda.

Looking to the future: The New CIOs

So what does all this mean for the skillset “the new CIO” requires? First, a CIO’s mandate increasingly reflects his or her organization’s business model — so, in some respects, there is no longer an “average” CIO. (See sidebox, overleaf.)

Nevertheless, overall, it is clear that the modern CIO has to be absolutely business-literate while staying on top of all the options a fast-changing technology landscape offers for growth. Many are managing this excellently. When I go into organizations, I see CIOs who understand how IT is changing and who are very business-savvy. Where they are often struggling is in bringing their own people along with that change effectively. Many IT professionals have skills that, learned ten years ago, are now obsolete and must change … and nobody likes big changes to their job. Managing those people within your own department while juggling everything else is going to be the most personal challenge for CIOs in the coming years.

Most of all, though, if you aim to be “the CIO of the future, today”, it is clear that you must broaden your perspective by knowing everything you can about the organization’s customers — and then thinking like an entrepreneur to deliver value to them. For so long, IT has had the business lines as its only real clients, and has left those departments to deal with external clients. But now the true CIO is facing a future of becoming more and more concerned with “the clients of the clients” himself or herself. And that is the true key. The better you know those customers, the more transformational a CIO you will be. [colored_box color=blue]The four types of “new” CIO

The job requirements for the “new CIOs” are now almost wholly contingent on their organization’s sector, culture, geography, size, customer needs and many other variables besides.

What we have seen, however, are four broadly different mandates for CIOs set by different types of organizations:

Some are expected to be “Pioneers”, with a primary focus on innovation and bringing new products to the external market. This might be the CIO at an airline company struggling with increased competition, trying to optimize its operating model while still staying attractive to customers. This type of company is very interested in smarter marketing through customer analytics, and the CIO here is expected to be on top of every possible new innovation and e-commerce idea to help the business win in a shifting marketplace.

A large manufacturing or mining company, meanwhile, whose margins are most affected by production efficiency, is likely to seek a CIO more in what we call the “Transform” mandate – a business leader who can use IT to create lean and error-free operations. For these CIOs, the demand is for IT tools that will simplify the business as absolutely as possible.

For other CIOs, the central mandate is to increase organizational effectiveness, with the kind of IT solutions that improve collaboration and communication within the organization and towards customers. We call them “Leverage” CIOs because they are expected to focus on unlocking social technology’s potential to get information to decision makers faster and more accurately.

“Expand” CIOs, meanwhile, are expected to focus mostly on refining business processes and enhancing collaboration. Almost all “Expand” CIOs – 95 percent or more – say they are expected by the business to take the lead (or offer strong support) on simplifying internal processes, driving better real-time decisions and optimizing analytics. This might be a CIO at an investment bank, for example, where every second of delay is money lost and where getting the best insights from data might mean the difference between prosperity and bankruptcy for the whole business.

For more information on The Essential CIO, and to download the Executive Summary, visit: http://www-935.ibm.com/services/c-suite/cio/study.html [/colored_box]

In the next article, I will look at how this transitional state is changing CIOs’ perspectives on their own value and the impact this is having on the way they build a business case, measure their ROI and invest for growth. With the whole organization’s market success often now resting on its technological superiority, the CIO must approach budgeting in a radically different way — or else risk the very success of the organization.

Carte Blanche edited by Pascal Lanser, General Manager, IBM Luxembourg.