Insights

CIO vs Business Led IT – Will IT evolution kill the CIO?

June 20, 2019

Charles Darwin’s amazing insight into evolution by natural selection changed everything

By John Filippis, Strategic Engagement Manager, Quorum

Charles Darwin came to an immense and world changing realisation on his journeys aboard the HMS Beagle. That realisation was that species of animals over a period of time and in incrementally small steps, adapt their biology to suit their surroundings in order to survive. This colossal realisation was the basis for his formulation of the then theory (now indisputable fact) of evolution by natural selection. Darwin understood from his acute and keen observation that species that don’t adapt, simply die. Despite its elegance in simplicity, Darwinian theory and the genetic framework that underpins it, is by its nature both brutal and unstoppable.

Darwin and his elegant theory sprang to mind today as I traversed a recent study conducted by Harvey Nash and KPMG, titled the “Harvey Nash / KPMG CIO Survey 2019”. This survey was aimed at understanding the priorities, strategies and careers of senior technology leaders around the world. There were 3600 responses from CIO’s and technology executives across 108 countries with 254 respondents coming from Australia.

As is always the case with these surveys and their derivative analysis, there tends to be a wanton application of prolixity as the analysts align their perspectives. However, amongst the prolixity in this report, there were two key findings that caught my eye and triggered my thinking. The findings went something like this:

Fewer CIOs now sit on the board – dropping from 71 percent to 58 percent in 2 years but CIO influence remains intact (66 percent see the role gaining influence compared to 65 percent in 2018).

Almost two-thirds (63%) of organisations now allow ‘business-managed IT’ spend, creating opportunities as well as increased privacy and security risks where the IT team is not involved.

So why did these two points arouse my thinking more than a Dua Lipa music video ?

Because of the incredible potential for them to invoke drastic change to the structure of corporate IT, not so much in the immediate term but most definitely in the longer term. Let’s look at the first finding and why it’s interesting. The CIO has been the “go to” for creating and delivering official corporate IT strategy and direction for many years. But this once unshakeable monopoly (both in my perception and in my experience) has started to slowly fracture in the last 3 years and this new data reveals that the fractures are indeed real and accelerating. The 13% drop in CIO board memberships within 2 years is a telling sign of a slowdown in the CIO’s executive relevance and I foresee that this trend will neither halt nor reverse but continue.

The second finding that 63% of businesses now allow “business-managed IT spend”, was the one that brought me to a Darwin like realisation that the slow, brutal and unstoppable process of IT evolution was well underway.

What is Business-Managed IT you may ask ?

It is a new and somewhat softer term that has entered the vocabulary as of late, to replace the less politically correct name of “Shadow IT” or IT that occurs outside of IT.

The very fact that some analyst took the time and trouble to create a new term to describe this phenomena is evidence enough that “business managed IT” is here to stay; and that its influence will grow to potentially become the future “go to” IT structure.

The survey also revealed that 40% of companies that do invoke business-led IT, were twice as likely to have multiple security risk exposures as a result.

That may provide some level of job security to CIO’s, but it is clear that they are not as relevant as they once were and that businesses are well prepapred to wear a level of risk in order to have the agility of “self-managing” their IT requirements.

But how in the world did we get here ??

A number of CIO’s on a golf course mid-week might ask themselves that very question, how indeed did we get to this point ?

As an outsider looking in there are a multitude of reasons that one could cite as to why businesses are bypassing their IT, everything from a lack of vision, inability to execute, excessive governance and the like could be offered as a reason. But if I were to try and crystallise it all down to a single reason, it would come down to IT having an inability to keep pace with the business. In the past the reverse was true,  but now many businesses are wanting access to services instantly and IT in many instances simply cannot deliver in a timely manner.

Despite being one of the fastest moving industries, IT structures as a whole have over the years increased their inertia considerably and where they could once respond quickly, are now in many places over governed and restricted to the point of being ineffective. This in my opinion is what has paved the way for the growth of Shadow IT or the now more acceptable “Business-Managed IT” model.

Over time, more and more ground will be ceded from the structure of the CIO and the IT hierarchy to Business-Managed IT “pods”, that will procure their services on demand as required. Although there are risks in the model,  the importance of agility and speed to the business will outweigh the need for excessive governance from IT.

So, this may very well be the beginning of a new evolutionary cycle in IT and one that will end up with the CIO role as we know it, change into something different or potentially die altogether through a lack of relevance and adaptability.

Charles Darwin wisely said:

“It is not the strongest or the most intelligent who will survive but those who can best manage change.”

And how he right he was, as he will be again in this case.

Evolution is slow, steady and brutal but most importantly it moves relentlessly in one direction, forward; and only the course of time will reveal if CIO’s and their roles will adapt or die in line with this evolution.

Until next time..

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