The Changing Role of CIOs

In the wake of the dotcom bust, there has been a profound shift in the role of today's Chief Information Officer (CIO). This comes as companies begin to recognise infocomm technology operations as an avenue which can potentially contribute to revenue growth, instead of accepting their traditional role as cost centres. Companies are also finding that one of the most effective ways to spur growth is by leveraging technology to expand market share.

The fourth annual Optimize Magazine "Defining the CIO" survey report published in June 2005, which interviewed 700 senior executives - including more than 400 CIOs, Chief Technology Officers, and vice-presidents in North America - showed that CIOs are expected to initiate and implement projects that yield a tangible and accountable contribution.

This shift from harnessing technology for cost-savings to aggressively growing the business is key to the changing role of the CIO. CIOs are being asked to find ways to expand market share and improve customer satisfaction as well. The new imperative is the ability to present and quantify information-driven business initiatives that positively affect the bottom-line.

CIOs in Singapore confirm this trend.

"Most CIOs are now empowered to look into areas beyond technology," says Ms Susan Hwee, Executive Vice President for Information Technology at United Overseas Bank.

Mr James Kang, CIO of NTUC Income, concurs. "Apart from the usual technology focus, CIOs now also look at strengthening business processes as well as capabilities to increase sales and profitability."

An important finding from the survey is that CIOs today are sharing their time among four major endeavours. These include:
- Responding to greater demands from the business
- Dealing with higher customer expectations
- Managing technical complexity
- Fostering increased coordination among internal business units

According to Ms Hwee, infocomm technology management - which includes execution, organisation, planning, control, performance and ensuring continual improvement - is de facto in a CIO's role. But CIOs today are also typically involved "in strategic planning, providing leadership, partnering with the business and supporting the vision of the organisation to contribute to the desired business outcomes."

Of course, the role of the CIO is dependent on the business model and corporate culture of the industry and company. "In any case, the CIO's role should be aligned to that of its business," she adds.

"Most CIOs are now empowered to look into areas beyond technology," says Ms Susan Hwee, Executive Vice President
for Information Technology at United Overseas Bank

The New CIO

One way to contribute to the bottom line is through process-improvement gains enabled by technology. In fact, understanding business processes is perceived as a must for today's CIO to be effective as a leader.

The North American survey found that a blend of business and infocomm work experience is the single most important attribute necessary for the CIO to be successful. Respondents agreed that knowledge of business processes specific to their industry was essential to the CIO's effectiveness.

"The business and operating environment has been evolving," says Ms Hwee. "Globalisation, competition, customer sophistication, and a proliferation of products and services have already created a demanding infocomm operating environment, which has worked in tandem with cost cutting to deliver business value and growth. Then came 911, which was a wake-up call to many on the importance of resilience to crisis."

As a result of these challenges, as well as the expectations and the quickened pace, the priorities of a CIO have changed too.

"We're into the Internet age and computerisation has reached a stage where it's such a formidable tool for competitive advantage," says Mr Kang. "In a networked world, companies that harness technology to access and utilise information quickly and perform transactions via end-to-end straight-through capabilities will have enormous edge in cost-effectiveness, efficiency and service level. The agility to meet dynamic market demands is key to superior performance in this age."

Contrary to the systems-confined role of the CIO of just a few years ago, today's CIOs are establishing themselves as leaders in their businesses. Corporate governance mandates have helped put them at the board level, together with other C-level executives, where at least half of the decisions made are infocomm-related.

The majority of CIOs report that their performance is measured by how effectively they are able to use infocomm technology to foster business growth, as well as to achieve productivity gains for the organisation.

With regards to accountability, most CIOs report directly to the CEO. This is in line with the greater strategic role CIOs are assuming as revenue producers rather than cost centre managers.

Along the same lines, the report revealed a CIO community that is concentrating on expanding its skill set. This is especially crucial when it comes to the all-important leadership skills essential to the CIO, who must now take the reins to conceive, promote, and execute new infocomm initiatives designed to spur revenue growth.

"Apart from the usual technology focus, CIOs now also look
at strengthening business processes as well as capabilities
to increase sales and profitability," says Mr James Kang,
CIO of NTUC Income.

For Better or for Worse

Rob Carter, executive vice-president and CIO at Federal Express Corp., has been quoted as saying, "The CIO's mission has been to provide a platform that enables the CEO's strategic vision, in a practical and repeatable manner that meets the day-to-day management requirements of the COO."

CIOs here in Singapore believe that their changing role is for the better, both for the organisation as well as for themselves.

"The increased scope and responsibility is certainly a change for the better," says Mr Kang.

For instance, the most recent change for Ms Hwee as UOB's global CIO was the formalisation of joint accountability or shared responsibility with the country infocomm heads in managing their infocomm functions. The country infocomm heads report directly to their country CEOs as well as to her.

The reason for the change was that, as the organisation grows, the scale of infocomm infrastructure investment also grows to stay relevant to business needs. "This change has helped us to think beyond our immediate area of work to tap on bank-wide resources where relevant to improve our competitiveness and success in the marketplace. It also reflects how important the ability to manage the technology infrastructure has become today," Ms Hwee explains.

This infocomm governance role has increased her responsibilities significantly. She considers it a change for the better, as it helps "to achieve greater accountability and bring about the desired mindset with the formalisation of this organisational structure. It also creates more opportunities for growth and exposure for our infocomm staff through field participation."

CIOs enjoy a unique and strategic view across the corporation that requires diverse knowledge, not only of a variety of business disciplines, but also of business processes. As a result, CIOs must build trust among their CXO peers to successfully fulfil their increasingly multi-disciplinary challenge.