What Will Happen to the Corporate CIO

Strategies for exploiting IT are already becoming integral to broader business strategies, and in this new context the value of having a corporate-level CIO needs to be discovered all over again. The role will adapt and evolve, potentially into something very different and even more valuable.

I was recently with a US-based multinational company, helping it define its strategy for optimizing the portfolio of businesses it has acquired over the past few years. The promise of this strategy — its value proposition — is to enhance bottom-line performance by better sharing common capabilities and without building a shared services monolith.

One dimension of this strategy concerns the company's processes, systems and technologies. To address this, it is adopting Web 2.0-style collaboration-based thinking (though not necessarily Web 2.0 technologies) to create a community of business unit CIOs who share and exploit their local technology investments for both business unit and corporate gain.

The company set out with the idea that it might need a corporate CIO, but everyone is struggling to see the value of having one. Instead, the solution it is now exploring is to have a global CTO responsible for technology services and reporting to the COO. In place of a corporate CIO it is looking to appoint a VP of investments in change, accountable for the total return the company gets from all the changes it invests its resources in, whether or not these changes involve technology.

Similar models are emerging elsewhere, as executives realize that their historic problems with IT investments are a symptom of fundamental problems within their culture when it comes to investing in change — problems that many CIOs do not appear motivated or qualified to resolve. For example, in the United Kingdom, two major retailers — the Alliance Boots pharmacy chain and the department store group House of Fraser — have recently axed their corporate-level CIOs. House of Fraser has split the role into two, separating "services" and "developments," while Alliance Boots has outsourced much of its IT delivery and decided it no longer needs a corporate-level IT function.

These are strong signals for CIOs to focus the strategic IT conversation on exploiting technology investments in the context of value-creating business change, and to keep the technology strategy both meaningful and simple. In this way, the CIO can emerge as her company's strategic investor in change, rather than become marginalized or obsolete — provided, of course, that CIOs today grasp and bend the golden opportunities that their increasingly technology-savvy colleagues and developments such as Web 2.0 offer.

Chris Potts is director of Dominic Barrow, a London-based consultancy specializing in corporate strategies for exploiting IT.