The CIO’s role today can be likened to the old Chinese philosophy of yin and yang – a custodian that unites and creates balance on both sides. The pandemic has spurred an evolution as companies realize the imperative to move toward digital.
In the past two years, investments in technology increased exponentially. Most businesses have doubled down on cybersecurity, many have migrated to the cloud, and almost all have accelerated their digital transformation journeys. But with today’s recessionary scenario and the probability of shortened recessionary cycles, the same companies and executives are reflecting on whether they have over-indexed on digital transformation.
To rationalize or optimize
A lot of companies are taking a hard look at whether the returns on their investments are going to pay off in the near or long term, as market scenarios are already changing. To accelerate digital transformation, many companies acquired more partners and vendors than they needed, which in turn led to a highly distributed vendor strategy where tools competed with each other.
This overlap creates excess costs in the ecosystem and amasses overheads from managing multiple vendors. CIOs are now consolidating tools and vendors to negotiate better rates and rationalize overall IT spending.
[ Also read 7 IT security articles every CIO should read in 2023. ]
Sustainability is also top of mind for CIOs, as predictive AI models will be leveraged extensively to reduce cost. Consider return rates, for example: The average return rate for retailers is approximately 16 percent. Predictive AI models can help reduce costs and increase ROI by minimizing the number of returns from customers. Even within manufacturing, these models can help reduce manufacturing waste, which adds up to almost $8 trillion per year, helping achieve circularity in the process and reducing IT spending.
To look within or peer outside
The world has become more protectionist and regulated. To achieve equilibrium and balance, nations are taking more measures to manage privacy, protectionism, compliance, and regulation.
Because of the flattening of globalization, each nation must create an architecture that suits its needs and find its balance. Hence, the compliance and regulatory requirements of each country are diverse. As a result, for global companies, the CIO is crucial for managing these changes in real time.
With employees, vendors, partners, and customers in different regions, there’s a change in the order of magnitude regarding compliance, regulatory, and associated complexities. The CIO will be able to drive and ensure adherence to compliance more effectively using technology as the baseline.
To pull back or move forward
COVID-19 forced companies to become more digital, increasing the use of technology for customers and employees. With much of the workforce working remotely, many companies rapidly migrated to the cloud, exploring hybrid and multi-cloud models and making considerable investments to enable a cohesive work environment.
Cut to the present day: Many companies want their employees to adopt a hybrid work model. With this shift, CIOs need to find balance and identify components that should be virtual, hybrid, or in-person, as well as what components should be cloud-based, which should be high-touch relationships, etc.
To take on the new or stay with the old
This first wave of digital transformation focused on experience, doubling down on improved UI/UX efforts to enable a cohesive remote work experience for employees and partners. This necessitated adequate security measures, robust collaboration tools, clear metrics for accountability, and attention to team building and morale.
The second wave of digital transformation focused on driving intelligent automation in the back end to amplify the impact of each team member and ensure that labor constraints didn’t limit growth. It also enables a more complete, real-time view of business operations to improve decision-making.
Today, the focus is on integrating modern technologies like generative AI and blockchain into workflows across functions and understanding how IT can create cohesive, efficient, and robust machinery to help achieve resilience through digital transformation.
CIOs must decide on the optimal combination of modern and traditional technologies in the front- and back end to achieve the equilibrium that works for their company.
What’s next for CIOs?
CIOs must help grow the business by enabling data monetization, platformization, and other digital revenue streams. They will also need to make critical decisions on what optimal processes for their organization look like – agile vs. traditional, for example – which areas to invest in and withdraw from, how to become more people-oriented, and how to foster relationships among teams across the organization as the business world returns to physical touchpoints.
Going forward, CIOs will need to shapeshift to the changing needs and priorities of the business and hold the balance in place.
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