Large businesses are starting to hold their chief information officers accountable for the results of corporate-wide digital business operations, giving them much wider responsibility within the organization.
As the economic changes brought about by the coronavirus pandemic accelerate businesses’ digital transformations, many now see a need for an executive who can view digital efforts in terms of the entire organization, coordinate activities and manage risks, said Janelle Hill, chief of research for
This is a role normally associated with a chief operating officer, Ms. Hill said. But many large organizations undergoing a digital transformation in more traditional industries—such as energy, manufacturing and retail—don’t have a COO to coordinate their activities, she said.
Gartner, which last month released its annual list of top strategic predictions, said that by 2024, a quarter of the CIOs working in large, traditional enterprises will effectively become, as the research and advisory firm calls it, “COO by proxy.”
Many CIOs already play a strategic role within their companies, helping set overall corporate direction. But others continue to manage information technology as a support function, Ms. Hill said.
In years to come, those CIOs increasingly will be called upon to demonstrate more operational accountability. They will recommend which enterprisewide digital projects get the green light, which activities continue to be funded and which efforts are discontinued, she said.
These CIOs will be expected to team with business leaders to develop digital products and services and help establish indicators to monitor digital performance results. They also will be held more accountable for the success or failure of their organization’s collective investments in digital businesses, Ms Hill said.
Ms. Hill added, however, that functional or line-of-business executives, such as those handling the supply chain and sales leads, will continue to be accountable for the results of the areas they oversee.
“It’s a much bigger stage that they’re stepping on to,” said Ms. Hill, who added that public sector entities also are accelerating their digital transformations and need the same level of oversight.
Neal Sample, the chief information officer at Northwestern Mutual Life Insurance Co., a financial-services company, oversees most of his company’s digital operations, including its customer-facing website and its financial-services client portal.
Before joining Northwestern Mutual last year, Mr. Sample had been the chief operating officer at pharmacy-benefit manager Express Scripts Holding Co., where he previously served as CIO.
Mr. Sample said that at Northwestern Mutual, there has been a transition from a classic CIO model to one where the position has more operational accountability.
For instance, in the past, the Northwestern Mutual information technology department’s responsibility for the corporate website was for latency and availability issues. Now, he said, as CIO he is in charge of not only making sure the site is up, but that traffic is strong and the user experience is good.
“We’re sort of expected to not just build, fire and forget,” he said, “but actually deliver the experience, measure the experience and then respond to the way the market is absorbing that experience.”
He believes Gartner’s prediction that more CIOs will be held accountable for all of a company’s digital operations is correct.
“I think it’s a natural trend. It’s expecting more of the role. But we should expect more of the role,” he said.
Fraser Ingram, group chief operating officer at Virgin Money PLC, a U.K. bank, said that in many digitally focused companies, the roles of the CIO and COO have become “fungible.”
Mr. Ingram oversees the company’s procurement, sourcing, customer service, IT and digital activities. Before he became COO, he was the organization’s CIO and innovation and change director.
“The ability to bring things together and create solutions for business problems is absolutely at the heart of being a good CIO,” he said, adding that many COOs probably spend 60% to 70% of their time delivering technical solutions and scanning for future technologies.
Mr. Ingram said, however, that in many cases CIOs may be the best person to lead a digital enterprise. “I think it’s easier to augment a good CIO with some business knowledge and operational experience than it is to turn an operations person into a good CIO,” Mr. Ingram said.
There are challenges awaiting CIOs held accountable for their companies’ digital business, he said. Mr. Ingram said it could be hard for the CIOs who are unable to detach themselves from the technical details to succeed in this new environment. They need to free themselves up to think at an enterprise and strategic level, he said.
Mr. Sample said a lot of IT teams haven’t been responsible for customer experience. They will have to do their research and learn what customers want and expect. Consumers, he said, are used to
and iPhone experiences, and CIOs will have to learn how to replicate those features and functions.
Still, if those CIOs now starting to take accountability for the companies’ digital operations are successful, Ms. Hills said, more CIOs will be asked to take on those responsibilities.
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