Wednesday, 17th July 2019

CIO and CFO need to work together on digital transformation

Apptio has released a report highlighting how the changing economics of IT and the push for digital transformation is disrupting C-suite dynamics and positioning the CIO as the leader most effective at driving change.

The survey, Disruption in the C-suite: How the digital transformation imperative is changing CxO dynamics and technology strategy, conducted in partnership with Financial Times (FT) Focus, the independent thought leadership arm of the Financial Times, found that digital transformation taking place in almost every company, in every industry, means that agility, advocacy and data is the new IT currency.
“Digital is completely transforming the IT operating model, and that means CIOs and CFOs need to work collaboratively,” said Sunny Gupta, Apptio CEO. “These business leaders need to accelerate new delivery models such as hybrid and cloud, optimise growth investments to fund innovation, and boost financial agility so that IT finances can be managed and adjusted in real-time based on the highest needs of the business.”
The survey finds that the pursuit of digital transformation has led to a greater spirit of collaboration in the C-suite, and greater trust in IT across the business. Yet this report also reveals a blurring of responsibilities, tensions between IT and finance, and a critical role for the CIO in reshaping the organisation for sustained growth.
“Technology leaders are more emboldened to drive organisational change: their priorities are shifting as they take a more agile approach to IT strategy,” said Sean Kearns, Editorial Director for FT Focus. “Customer expectation, and businesses’ corresponding sense of urgency, is changing the dynamics of the C-suite.”
Strategy at speed
More than half (56%) of organisations who are embracing digital transformation say they are adopting an agile, flexible strategic approach that constantly evolves based on continual learning from the business and customers. And while technology leaders seek to drive growth through innovation, they expect to maintain almost the same proportion of effort enabling business model change over the next three years, as they balance the need for growth with the need to operate existing IT systems.
The new C-suite
More than two-thirds (68%) of global respondents agree that digital transformation has strengthened collaboration across the C-suite leaders when it comes to developing new products and services. Yet, 47% of business leaders say digital transformation blurs the lines of roles and responsibilities. This doesn’t mean that all leaders are necessarily aligned on business priorities or technology strategy. CIOs and CFOs are seen as the least aligned, with only 23% of UK respondents saying the two functions are in deep alignment, compared to a global average of 30%. These new dynamics are creating tension – especially between finance and the IT leadership.
The power of persuasion
This dynamic creates an enormous opportunity for CIOs to drive change. Survey findings highlight that CIOs are now considered the C-suite leader most effective at delivering change based on customer insight, even more than the CMO or CEO. But in order for CIOs to take advantage of the enormous opportunity this poses to be the change-driver in their organization, CIOs need to communicate effectively with the rest of the business and influence all stakeholders. Seventy-one percent of finance leaders say that the IT function needs to develop greater influencing skills in order to deliver the change their business requires. IT leaders need to develop those communication skills within their teams and ensure that they are equipped with the right blend of technical, business and influencing skills.
Decisions and where to make them
Companies are unsettled about how important technology decisions are made and evaluated. The cloud is crucial to meeting digital aspirations, but concerns over governance pose challenges for adoption and migration, causing only 30% of leaders to feel confident in IT’s ability to govern cloud across the business. Agile delivers value in accelerating adoption of new technology and enabling digital transformation, but greater clarity is needed on tracking performance. Less than one fifth of companies (16%) have a clearly defined framework to map success across the business, and UK leaders are among the most likely to adopt agile without this framework (24%).
Leading with data
Real-time data gives IT leaders the power to assess their investments in new technology and make better decisions. According to 51% of leaders in our survey, the IT function is taking a more proactive stance on data leadership across the business compared with other functions, and they say that this approach is paying off. Of those who say that the IT function is taking a more proactive stance, 58% say that this approach is very effective in helping to meet growth targets.

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