A long time ago — back in the early 1900s — many companies had a Vice President of Electricity. It’s hard to imagine today, but there really was an individual whose sole responsibility was to manage a company’s electricity. You needed a team to manage switches, regulators and wiring.
With time, however, electricity became a commodity. Companies didn’t have to worry about procuring electricity and there was no reason to have a team working to monitor it. Understandably, the VP of Electricity became less important and, eventually, it faded away altogether.
Several decades later, we can ask which role do we think will have the same fate as the VP of Electricity. We could argue that the traditional Chief Information Officer (CIO) position is a good candidate.
The role of a CIO typically has been to build a company’s IT infrastructure and create an IT department that would take care of the company’s internal needs. However, the last few years have seen several waves of change that have started to undermine the relevance of the traditional CIO.
Before there ever was a consumerization of the enterprise, the head of the IT division’s job was to choose, implement and integrate ERP systems, manage the company’s servers and network, set up all new employees with a computer, train them on internal software and streamline internal business operations.
However, today the big ERP systems are being replaced by specialized SaaS products hosted on the cloud. These apps are easily discoverable and have consumer-like user interfaces, which means they are simple to buy, use, implement and set up. It no longer requires weeks of searching to identify the best payroll software and months to implement it — new tech companies are providing all the key services that are needed to run a company:
- CRM: RelateIQ, Zoho, AgileCRM, Salesforce
- Payroll: ZenPayroll, Xero, Workday
- Accounting: QuickBooks
- Insurance and Benefits: Zenefits
- Project Management: Jira, Asana, Basecamp
- Servers: Amazon Web Services, Google Cloud, Blue Ocean
- Storage: Box, DropBox
- Communication: Slack, HipChat
- Marketing Automation: Marketo, HubSpot, Pardot
Even when it comes to building custom software, the role of the CIO could be undermined, especially with the growth of the on-demand economy.
While the exact role of a CIO varies between firms, one key responsibility of a CIO is to build out a technology team. However, with the on-demand workforce of today, a company can hire workers for small tasks on freelance marketplaces like Upwork and hire mature “just-in-time” expert teams on platforms like VenturePact. They can quickly find talented teams online who have experience in projects they are looking to build.
Of course, implementing large SaaS tools like Salesforce or Workday usually requires some integration work, but the trend over the last few years clearly points to a decrease in integration requirements and the simplification of enterprise apps. Also, using online tools to find developers does not remove the need to manage those developers and provide direction regarding the projects that need to be done. That said, project management tools and online resources are making this easier.
So, are CIOs on their way out? The answer depends on the scope of the CIO role. The new role is responsible for the full digital strategy of the organization. Companies that feel they have a weakness in their digital strategy tend to hire a CDO (Chief Digital Officer).
When the CDO comes in to define a digital strategy, they spend a lot of time thinking about the customer needs and the full customer journey to find ways to enhance the company’s offering and better engage with customers across all devices. They think beyond the standard website and internal software to more creative ways to improve the customer experience.
CIOs should embrace the CDO role. They should be open to reinventing their roles, positioning themselves as versatile experts capable of leveraging technology to empower the entire organization. It is their ability to innovate, experiment and work with different branches of the company — human resources, sales, marketing, product, etc. — that will make them valuable assets and keep them relevant in these changing times.
But if they refuse to challenge themselves and remain within their traditional roles, they run the risk of suffering the same fate as the VP of Electricity.