Even in an economic downturn, it continues to be a good time to be a chief information officer. A new report from research firm Foundry finds that 77% of CIO respondents say their role was actually elevated due to the current state of the economy, and this visibility within the organization is expected to continue.
Additionally, 38% of line of business respondents view the CIO as a strategic advisor, proactively identifying business needs and opportunities, and 25% view the CIO as a consultant who evaluates and advises on business needs and tech choices.
“CIOs are balancing the persistent focus on transformation and modernization with a maturing leadership role, embracing responsibilities outside of the traditional IT domain and cementing status as a valued and strategic partner to the business,’’ the report states.
The 2023 “State of the CIO” report, which surveyed 837 IT leaders and 201 line of business participants, found that functional and transformational activities consumed the bulk of IT leaders’ time this year, similar to 2022. A plurality of those surveyed (38%) viewed themselves as transformational CIOs, while 26% said they were strategic and 36% identified as functional, according to the report.
CIO role is evolving with business needs
The focus on IT transformation “hasn’t diluted demand for CIO leadership, but rather enhanced their stature as a strategic advisor and consulting resource,” the Foundry report said. More than half of respondents (55%) said they proactively identify business opportunities and make recommendations regarding technology and provider selections, while 23% said they evaluate and advise on business needs, technology choices and providers.
Less than 10% said they serve as a risk assessor or autonomous player when it comes to technology procurement decisions. LOB respondents were pretty much in lockstep with that assessment of the CIO role: 38% view the top IT executive as a strategic advisor and 25% as a valued consultant, according to the report.
The CIO job continues to be more digital and innovation focused — a trend cited by 85% of IT leaders and nearly three-quarters (74%) of LOB respondents involved in this year’s research.
Organizations have come to view the CIO role through the lens of a changemaker, as cited by 85% of this year’s IT leaders. A noteworthy finding was that the majority of LOB respondents recognize the CIOs’ transformative capacity, but at 64%, the numbers are significantly lower than how technology leaders frame their own contributions.
In terms of executive status, CIOs increasingly report to the CEO (49%). This figure was higher among IT leaders in the financial services (56%) and high-tech (54%) sectors as well as at SMBs (57%).
Tech initiatives driving IT investment
The technology initiatives that are expected to drive the most IT investment in 2023 are:
- Security and risk management.
- Data and business analytics.
- Application and legacy systems modernization.
- Machine learning and AI.
- Customer experience technologies.
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The transformation aspects of the CIO role remained front and center, with 83% of IT leaders focusing their time on these types of initiatives. Modernizing infrastructure and applications continues to be a top priority, although less so this year (35%) compared to the 40% who flagged it in the 2022 State of the CIO research, the report said.
As with last year, CIOs were focused on aligning IT initiatives with business goals (38%), cultivating the IT and business partnership (31%), and directing change efforts (28%) — all pointing to IT executives’ maturing leadership status, the Foundry report observed.
The CIO as business strategist
CIOs continue to take on responsibilities outside of the IT domain, specifically creating new revenue-generating initiatives. Sixty-eight percent of IT leaders confirmed they currently have some sort of revenue responsibility, up from 65% in the 2022 State of CIO survey. This is much higher among IT leaders in the high-tech (88%) and financial services (75%) industries.
Some 44% percent of IT leaders are managing a team tasked with creating new revenue-generating capabilities, while another 24% are part of such a team. In support of making their organizations more revenue-driven, CIOs are automating business and IT processes (47%), creating new products and services (40%), and making data more available (34%).
Conversely, the report also notes that “this was another year where IT leaders were able to spend less time on business strategist responsibilities (61%), which was about the same as 2022.”
The only exceptions were in the high-tech sector (78%) and financial services (67%), where IT leaders cited activities like driving business innovation, developing and refining business strategy, and identifying opportunities for competitive business goals (38%), cultivating the IT and business partnership (31%), and directing change efforts (28%). This all points to IT executives’ maturing leadership status, the Foundry report said.
Much like prior years, IT leaders are still struggling to find an equilibrium between business innovation and operational excellence — a balancing act highlighted by 74% of survey respondents, higher among those in manufacturing (80%), retail (80%), government (78%) and enterprise organizations (77%). Striking a balance appears to be the ultimate goal.
“Looking ahead, the pendulum is set to swing back to CIO involvement in business strategist activities,’’ the report noted. “Almost three-quarters (71%) of respondents to this year’s survey expect to devote a higher percentage of time to business strategist work three years out. They plan to focus on driving business innovation, developing and refining business strategy, identifying opportunities for competitive differentiation, and developing new go-to-market strategies and technologies.”