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Cognizanti

An annual journal produced by Cognizant


VOLUME 9 ISSUE 1 2016

Part III

Digital
Business
2020:
Getting there
from here!
The First Word
Digital Reinvention
Requires a Radical
CIO Makeover

The First Word

Digital Reinvention
Requires a Radical
CIO Makeover
By Reshma Trenchil

To lead digital transformation,


CIOs need to go beyond
technology prowess and
develop new work styles,
people skills and political
savvy to energize the
organization for change.
When it comes to being digital, two equal
and opposing forces are in play. On the one
hand, digital promises to transform organizations into more personalized, relevant,
real-time businesses that use social, mobile,
analytics and cloud technologies to engage
with customers in a more value-driven way.
Along with the upside, however, come
challenges, as organizations and employees
must substantially change how they work,
reconfigure their skill sets and even recast
their work personalities. No one personifies
this need for reinvention more than the CIO.
Not long ago, the CIO was tasked primarily
with keeping IT humming. The business
outlined its needs, and the CIO executed
on them. Thats table stakes in todays
digital age. Now, CIOs must be influential,

innovative and connected, capable of confidently collaborating with business leaders


across functional silos to steer the organization on the digital path.
To understand this ongoing transformation,
we surveyed 200 CIOs across the U.S. and in
multiple industries. Our findings illuminate
the new challenges many CIOs face, as well
as the skills and work styles necessary to
successfully cross the digital chasm. What
we found: While CIOs are well-positioned
to lead the digital program, they need to up
their game in terms of cross-functional relationships, especially with the CEO and chief
marketing officer (CMO), while adopting a
leadership mindset toward identifying talent,
inspiring and managing change, and enabling
innovation.

CIOs Play a Crucial Role in


Digital Transformation
First the good news: An overwhelming 89%
of respondents said CIOs are critical to the
success of the organizations digital transformation (see Figure 1, next page). Further,
CIOs are more apt to lead digital programs
(34%) than the CEO (29%) or others in the
C-suite.

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Key Elements to Enable the Digital Transformation


CIO plays a key role in digital transformation

1%

A digital strategy that is clearly articulated,


communicated and understood

4%

Actively collaborating with talent acquisition


teams to acquire the required skills

10%

41%

48%

12%

45%

39%

1%
4%

13%

39%

43%

Understanding the benefits of digital


programs and having the metrics to measure
the success of digital initiatives

3%

15%

43%

39%

Identifying the skill gaps that impede


digital transformation

4%

15%

43%

38%

An annual planning process to align


departmental objectives with the companys
overarching digital strategy/objectives

4%

16%

40%

40%

Common understanding between the CIO and


CMO teams about the identified shared goals

1%
2%

17%

40%

40%

Understanding the costs of digital transformation


programs and having realistic ROI expectations

6%

16%

38%

40%

Identifying the appropriate digital technologies


to deliver on business objectives

5%

19%

34%

42%

Strongly disagree

Disagree

Neither agree
nor disagree

Agree

Strongly agree

Response base: 200


Source: Cognizant Research Center
Figure 1

But this pivotal role requires a new set


of strengths and skills not traditionally
associated with CIOs, such as the need to
be socially and politically savvy, leadership
oriented, innovative and willing to take risks
(see Figure 2, next page).
Ideal CIOs are also experienced with leading
digital programs or a digital company
(88%), possess cross-industry and business
experience (78% and 82%, respectively) and
have moved up through the ranks to their
current position (79%). A core IT education
(86%) is slightly more crucial than a business
management education (82%), and certifications in technical and professional skills
(78%) can be a plus, our study reveals.

Becoming a Digital Leader


A large majority (87%) of respondents
believe successful digital CIOs are those
who have adopted a transformative mindset
rather than focusing merely on improving
IT operations or even influencing business
strategy with digital know-how. Respondents also emphasize the need to spend

more time on cross-functional collaboration


(85%) and aligning the digital strategy with
business needs (84%). CIOs need to focus
outside the four walls of the organization
(82%) working with customers, partners
and suppliers since digital is the glue
that connects all constituencies across the
business ecosystem.
Situated at the intersection of business
and technology, CIOs are positioned to
inform and drive digital-first strategies.
To accomplish this, respondents said CIOs
should seek to be a major contributor to the
enterprise digital strategy (85%) and take
time to study market trends and customer
needs to identify digital opportunities
(77%), in addition to finding, evaluating and
deploying new digital technologies (82%).
All told, the successful digital CIO must
function in multiple roles (see Figure 3, page
5), including:
OO

Chief talent officer, working closely


with the human resources organization to
bridge skills gaps (87%).

Critical Skills & Competencies of the Digital CIO


Socially savvy (engage with regulators,
clients, media and analysts)

1%
1%

Politically savvy (push digital


transformation enterprise-wide)

2%
4%

Lead from the front (have solid knowledge


of business and industry)

1%
4%

Game-changer (reflect on challenges and


opportunities to find the best way forward)

12%

50%

36%

46%

35%

16%

43%

36%

4%

17%

40%

39%

Transformational leadership
(mobilize commitment, create shared vision
and work toward digital transformation)

3%
2%

17%

43%

35%

Innovator/co-creator (create new business models


in partnership with cross-functional CXOs)

2%

16%

40%

35%

Risk-taker (ability to justify


actions and investments)

6%

21%

39%

34%

Networking and relationship-building


(actively forge partnerships internally)

1%
5%

22%

38%

34%

13%

7%

Strongly disagree

Disagree

Neither agree
nor disagree

Agree

Strongly agree

Response base: 200


Source: Cognizant Research Center
Figure 2

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Chief influence officer, maintaining


excellent working relationships with other
business leaders (86%).
Change agent, transforming the culture
to embrace digital approaches (82%).
Chief inclusion officer, promoting
an open and innovative enterprise
culture (82%).

Influencing Key
Stakeholders
Because digital is an enterprise-wide effort,
the CIOs relationships with other business
leaders are critical. In fact, over 80% of our
respondents said success hinges on the ability
to build and maintain relationships, as well as
use these relationships to obtain buy-in and
support for digital initiatives.
Of all these relationships, the most important
is with the CEO (90%). In fact, a majority
(63%) believe theyd be most successful if
they reported directly to the CEO; little
wonder, as in most cases, the CEO sponsors
digital programs in the organization (42%) vs.
the CIO (24%) or others in the C-suite.

Conversely, the lack of CEO support can


pose a significant challenge, with many
respondents believing they do not receive
enough backing from the CEO and board of
directors to deliver on digitals promise (66%
and 49% of respondents in banking and
healthcare, respectively).
A close second to the CEO relationship is
the importance of the partnership with the
CMO (87%). This is critical given ongoing
in-fighting between CIOs and CMOs at
many companies for budget and strategic
influence over the digital agenda. The need
to collaborate is a matter of necessity; 83% of
respondents indicated that a major portion
of the funding for digital projects originates
from marketing IT and CIO budgets. And
since CIOs believe customer experience is
largely shaped by digital technology (79%)
and that marketing is increasingly becoming
digital (85%), the two camps have a vested
interested in collaboration.
For instance, while marketing often owns
the digital customer experience, execution is
typically the CIOs responsibility (84%). As a
result, a vast majority of respondents believe
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The Evolving Digital CIO Role


Chief talent officer (work closely with HR team
to bridge IT/business skill gaps)

1%

12%

46%

41%

Chief influence officer (maintain excellent working


relationships with other business leaders)

2%

12%

42%

44%

Change agent in transforming culture

1%
4%

39%

43%

Chief inclusion officer (promote an open and


innovative enterprise culture and enforce
talent value chain seamlessly)

1%

37%

45%

IT evangelist (discuss how to leverage IT to


implement digital strategy and engage IT
in digital transformation)

1%

38%

43%

Change agent in leading the digital journey


(shape the vision and ignite passion for
digital transformation)

1%
4%

15%

39%

41%

Digital coaches (scout the latest digital technologies


and blend with IT to enforce value creation)

5%

16%

37%

42%

Governance champion (enforce the value


equation across business functions and lead
continuous improvement)

10%

35%

35%

13%
17%
18%

20%
Strongly disagree

Disagree

Neither agree
nor disagree

Agree

Strongly agree

Response base: 200


Source: Cognizant Research Center
Figure 3

digital initiatives are strengthened by the


joint participation of CIO and CMO teams
(81%). Not surprisingly, winning CEOs
promote collaboration between the CMO
and CIO (77%).

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Tips for Becoming


a Digital CIO
To successfully steer their organizations throughout the digital journey, we
recommend CIOs consider the following:
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Become embedded in key digital


initiatives, advising and serving as a key
influencer or center of excellence for all
things digital. Specify new tools, technologies and sources of talent, and suggest
necessary business model and process
changes.
Ensure the IT organization moves
toward digital maturity, starting by
tackling the legacy IT portfolio. The
fail-fast digital credo must replace ITs
traditionally more cautious approach in
order to inspire and support innovative
approaches.

OO

Establish IT as the primary channel


through which digital products and
services are realized. Play a central role in
the development and commercialization
of digital initiatives, regardless of where
they originate in the organization. Seek
ways to integrate meaningful shadow IT
projects into the enterprise information
architecture.
Be the change you wish to see. An
enterprise-wide digital mentality will not
happen on its own. CIOs need to become
digital change agents and catalyze business
transformation in order to evolve into true
digital champions and trusted advisors to
the CEO.

Note: This article is based on our recently


published report Being Digital: How and Why
CIOS Are Reinventing Themselves for a
New Age.

Author
Reshma Trenchil is a Senior Manager on Cognizants thought leadership team. She has 15-plus years of
experience in business writing and research. Before joining Cognizant, she worked in equity research at UBS
and thought leadership research at Deloitte. She has a masters degree from Boston University and a bachelors
degree from Stella Maris College. She can be reached at Reshma.Trenchil@cognizant.com.

Acknowledgments
This report is based on research conducted by Sanjay Fuloria, Senior Researcher within the Cognizant
Research Center.

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