CIOs risk becoming irrelevant if they don’t start to think differently and align themselves with the strategic direction of the company, according to Hitachi Vantara’s IT chief.
Renée McKaskle, CIO of Hitachi Vantara, used her keynote presentation at the company’s annual conference last week to argue that “it’s time for the chief information officer to become the chief innovation officer”.
“The stereotype of a CIO in the c-suite — technology-forward, back office-first, process heavy bureaucrat with little business skill and acumen and not enough budget — that has to go away,” McKaskle said.
It’s a case of disrupt or be disrupted.
McKaskle, who has held CIO positions at SC Johnson & Sons and Symantec Corporation, said CIOs need to consider how the IT department can improve efficiency and profitability, find new business opportunities and improve customer experience.
“Today we focus on results, we support transformation. We still have to keep the lights on but we have to have a commercial business lens to everything we do,” she said.
That requires CIOs develop strong partnerships with the rest of the c-suite, particularly in the case of cloud-based software as service solutions (saas), which initially allowed business managers in disciplines like sales or HR to circumvent the usual company processes around buying IT.
“I don’t think shadow IT is a bad word,” McKaskle told Which-50, adding that cloud providers are selling outcomes that can be beneficial to business units.
“The business absolutely has a seat at the table to make those business decisions. We’re there to help them.”
At the end of the day, the CIO is still responsible for technology governance and maintaining core infrastructure, she said.
“If something bad were to happen such as a security breach or the system goes down, who’s the first phone that’s going to ring? It’s going to be mine.”
To balance the challenges presented by shadow IT, McKaskle said CIOs need to be included in the buying process to address issues around security, compliance and the overall cost of ownership.
“CIOs have to have great partnerships with the CMO, CHRO and the head of sales to say ‘look I’m here to help you, I want to be your conscience because I don’t want you drinking the koolaid either’.”
“A lot of these are small niche players [that] may or may not understand what it takes to run at scale for a company like us.”
In terms of who controls the budget, McKaskle argued the most important metric is the percentage of revenue spent on technology. Whose budget that is in is “a little bit irrelevant”, she said.
CapEx to OpEx
The move to cloud-based subscription services has also upended the IT budgets. Over her career McKaskle has seen OpEx spend increase as CapEx has declined.
“The the person who gives it the most heartburn to is your CFO,” she said.
“Typically you will hit your head on the OpEx budget every year and it’s not just me it’s in general when you go to the cloud you know you turn it on and start consuming it. Now the good news is the predictable model. This is what it takes is pay as you go. It also creates more fluidity in your budget if you need to turn something off.”
While it is a more predictable cost model, companies need to wrap their head around the total cost to operate a cloud-based solution, McKaskle said.
“The conversations to get investment dollars are different conversations and those give everyone a little heartburn. Get comfortable with being a little uncomfortable with what the future holds,” she said.