Is There A CEO-CIO Disconnect?

03/11/2016 14:23

The relationship between the CEO and CIO has always been a bit complex. A decade ago, CEOs held mega-power over the CIO, seeing IT as a back-office function and giving orders with very little consideration of technology, and asking for budget reduction year-over-year. Today, obviously, CEOs are more technology savvy and engaged in the behind-the-scenes workings of their business, giving more importance to the CIOs role. Per Gartner, CIOs' relationship with CEOs is becoming more strategic as they build platforms for digital leadership. CIOs are now seen as huge players in the success of modern businesses.

Despite this, CEOs are flying blind.

Software is the founding pillar of a modern business, driving new services and disrupting traditional business practices, however, few business executives have insight into the structural risk of these systems. What they know is that the systems work, until they don't. Oftentimes these large, enterprise systems encompass legacy technology in the back office that's stabilised through routine maintenance, linked together with modern front-office apps, until something disruptive happens. Take the recent outage at Delta Airlines, for example, which paralysed operations and cost millions, putting pressure on senior executives, keen to show shareholders they are taking care of the problem.

The truth can be hard to hear, but the truth is ... CIOs are driving IT-intensive businesses with very little intel on software risk exposure. They rely on subjective opinions expressed by those who are paid to build these systems. When customer-facing services are compromised by technical issues, it's the CEO and CIO who get thrown into the lion's den to pacify angry stakeholders.

As IT becomes more pivotal in the digital era, CIOs must ensure that their CEO has a clear understanding of what IT is delivering for what level of company-wide software risk exposure. With this information, smart decisions about speed-to-market and risk can be made. This also enables the board to seamlessly support overall IT performance and increase investment, a key mobiliser of competitive edge.

The evolution of the CIO

As CIOs become more focused on business-enablement, this also means helping other areas of the organisation understand complex IT issues that can make the difference between success and failure. Moving from obscurity - the IT black box - to a transparent world supported by facts and objective measures. Software system-level health must be tied into business strategies across all departments and translated into easy-to-understand business cases that chief execs understand.

Application health is important to measure because it illustrates how systems will function if changed and how many critical vulnerabilities are hidden underneath the surface. This can be difficult to achieve, especially in Insurance, as explained in a recent CRASH Report. Systems are becoming more componentised as we move towards a DevOps world where everyone quickly iterates components into production. This makes it ever more difficult and critical to get a system-level view of the entire application to foresee software risks.

To help CIOs improve transparency and cross-functional understanding, the Consortium for IT Software Quality (CISQ), founded by the Software Engineering Institute at Carnegie Mellon University and the Object Management Group (OMG), an IT standards organisation, has published a set of engineering best practices against which system-level analysis can be run as a neutral third party "evaluator." CISQ has published several studies correlating poor software structure with major security, stability and performance-related glitches that cause major business disruptions.

CISQ standards can shine a light into dark, hidden corners within a system, and as we know, sunshine is the best disinfectant.

The changing rhetoric of the CEO-CIO relationship

Would you accelerate on a foggy day, or wait for the clouds to clear? Much confusion can be avoided away from the fog. Strong relationships between the CEO and CIO are integral to the success of forward-thinking organisations. This takes regular dialogue, which will in return enhance the understanding of each other's needs and help build trust, itself derived from facts.

CEOs should rely increasingly on CIOs for more information about transformational technology that can drive market competition and better customer experience. Simultaneously, CIOs should communicate objectively with facts regarding software risks that may pose a threat to business success. This forms an allied relationship, with the CEO and CIO working together to accelerate the business while protecting IT.

Too often, CIOs are focused on value and cost reduction, therefore putting the organisation at more inherent risk. As a shareholder of a few listed companies myself, I am always glad to learn they are coming ahead of the competition with new services at a controlled cost, but I always want to know at what level of risk such performance is achieved. All shareholders and board members who experienced a post-software disaster stock crash will share my concerns.

The next wave of successful CEOs and CIOs must be able to talk about competitive advantages, inherent cost and time-to-market while adding facts about the robustness and security of underlying business enablers (i.e. the software asset).

Finally, when it comes to business modernisation, in shifts like digital transformation, the latest research from Forrester reveals the CIO was valued as the most important leader in driving or supporting such initiatives. This supports the idea that CIOs must provide transparent IT performance metrics to their CEO, and in turn, CEOs should leverage these insights to explain to the boardroom how fast the business can innovate while controlling risks and costs, with a clear view ahead.

As organisations strive to succeed in the digital world, transparency between the CIO and CEO is essential to navigating the choppy waters. Driving blind is not an option.

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