Ever since GenAI burst onto the scene, the CIOs on IDC’s CIO Executive Council have threaded through all gatherings and conversations. CIOs are actively engaged in proofs-of-concept, exploring build versus buy options, and working on updated governance – standard fare for addressing emerging and new technologies. AI and GenAI aren’t your grandfather’s emerging technology. Everything from business models, customer behavior, employee productivity, and critical skills for the workforce is rapidly changing. CIOs keep raising one key question: “How does their company view the strategic role of IT in the age of AI?”
Executive Council CIOs are experiencing a spectrum of IT roles in the age of AI. Some have benefited from a consolidation of scope & responsibility under their remit. Other CIOs are experiencing their role being relegated to “running the utility” and aspects of technology leadership dispersed amongst other “C’s” including a new Chief AI Officer, Chief Digital Officer, and Chief Technology Officer. Regardless of the current state, Executive Council CIOs along with IDC analysts agree that the current technology and risk environment is a gift to bolster making the case to the C-Suite and Board of Directors of the strategic importance of IT. Here are the top 3 “gifts”:
- CEOs expect CIOs to drive digital transformation to create new revenue streams: IDC’s Worldwide 2024 CEO Survey found that over the next two years, CEOs are increasingly looking to the CIO as a strategic business leader of technology to enable the business growth strategy. While the AI leadership profile is still evolving, about half of the organizations surveyed are adding AI leadership responsibilities to an existing technology or functional leader. AI has the strategic expectation arrow pointing squarely in the direction of the CIO.
- The Critical Ingredient to Fuel AI is Data: The current state of a company’s corporate and customer data is fully revealed as more and more AI use cases are embraced. Every functional line-of-business and technology leader is experiencing the angst of disconnected, missing, poor quality and inaccessible data to constantly train AI models. Of IDC’s identified top 10 GenAI Use Cases for Business, 50% of the top use cases are in marketing. The C-Suite has identified a recession proof investment in AI to improve the digital customer experience, supporting business growth. Marketing is facing data and technology barriers to move at the speed of the customer that CIOs are best positioned to resolve. The data paradox is reshaping the CIO’s strategic collaboration and relationship with key functional leaders, such as the CMO. The gift of necessity has been delivered to the CIOs doorstep. Check out more in the report The Data Paradox Reshaping the CIO and CMO Relationship.
- CrowdStrike and the Scare in the Boardroom: During a recent IDC CIO Executive Council Connect, I hosted Frank Dickson, Group Vice President, Security & Trust, with the Council for a deep dive conversation on 3 big things CIOs Must Do because of the CrowdStrike Outage (read more in CrowdStrike Update Outage Exposes Four Critical Issues: Next Steps for CIOs). Out of the conversation came the realization that while extremely painful for many in our community, it is the perfect gift for CIOs and CISOs to demonstrate the strategic importance of dealing with technical debt, modernizing IT infrastructure and getting back to the basics of robust systems management. CIOs have a direct correlation to negative brand and revenue impact if the company lacks a strategic mindset about and investment in technology.
Harnessing these 3 inflection points, CIO’s have the opportunity today to make a strong case about the strategic role that IT plays to enable business growth. The following is the IDC CIO Executive Council’s Guidance to position IT as a Strategic Investment.
- Speak the language of the business: Put the words “IT” and “technology” to the side. Focus on the business problem at hand and the investment that is required. Start with defining what is the critical investment is to be successful and how you will measure business outcomes. For example, “We need $15M to ensure that we are buffered from an outage such as CrowdStrike and mitigate risks including short-term revenue loss and longer-term revenue impact due to a poor customer brand experience. “
- Adopt an Investment Philosophy: For some of IDC’s Council members, IT is still viewed as a utility. Flip the way you speak about IT to change the paradigm. Frame up IT spend just like an investment banker. Tell the story based upon revenue, cash and operating income. For example, the strategic investment in IT will generate $x in revenue. Do not go for the pot of gold, rather define the right size of investment for the near-term and longer-term expected returns. Breaking down your investment into bite size chunks allows you to truly prove the value of IT more immediately.
- Lay out the Investment Process for Business Acceleration: Identify the steps to deliver value back to the business including how long it will take for the business to start to realize an initial return and expected timeframe for full results. Council members highlighted the benefit of using the term “business acceleration” rather than “change management” to smooth out the typical user adoption challenges and align to language the CEO and Board of Directors understand.
