How a focus on the customer has reshaped the CIO role
A rapidly changing job description makes the CIO 'the most misunderstood C-suite position'
First, CIOs were expected to manage IT. Then, IT leaders had to focus on being aligned with the business. Now, the CIO must concentrate first and foremost on the customer. So, why has this evolution taken place and how has the customer-focused CIO risen to the fore?
For the first 20-or-so-years of their existence, CIOs managed technology they concentrated on day-to-day operational concerns and spent most of their time in the IT department. During the noughties, there was a shift in focus. As concepts like cloud and consumerisation started to take hold, so the business started to see technology as a potential competitive differentiator, rather than just a support service.
Terms like 'alignment' and 'engagement' were used to define successful CIOs. Great IT leaders spent less time in the data centre and more time talking about business concerns with c-suite peers. That shift towards engagement has continued into this decade. In an age of disruption, modern organisations recognise digital systems and services can play a key role in keeping the most important person happy: the customer.
CIO golden age
Ian Cohen, global CIO at transport specialist Addison Lee, looks back on the 30-plus year history of the CIO role and says change is inherent to the position. As technology systems and services alter, so do the demands made on CIOs. This flex means IT leadership is a tough gig, yet the position hasn't always received the credit it deserves.
"The CIO role has existed for over 35 years in various guises since it was first defined back in 1981 and yet it remains the most misunderstood of all C-suite roles, and it is still not a board appointment in some companies," says Cohen. "However, many who hold that position will tell you that there has never been a better time to be a CIO if you are up for the challenge."
Cohen is far from alone in this viewpoint. Phil Armstrong, executive vice president and global CIO at finance firm Great-West Lifeco, says the shift in emphasis has been fundamental. Like Cohen, he recognises the IT leadership role continues to go through a tumultuous period of change and he says this transformation pushes CIOs into new, exciting areas.
"The CIO role has changed significantly in the past decade," says Armstrong. "It was an analytical role now, the CIO is shifting towards the creative side of the brain. If technology is integrated into the business, then it's our job to talk about the art of the possible and to bring those ideas into the organisation."
What constitutes an 'innovative' answer to a challenging business problem depends heavily on the requirements of the customer. Digital transformation might be a laudable aim, but there's little point in implementing systems and services if you are unsure who will benefit. CIOs who adopt a client-first approach can be more certain their IT spending decisions have a direct impact on the business and the customers it serves.
A focus on the customer
The amount of time CIOs spent on customers increased from 10% in 2007 to 16% in 2016, according to research by IDC. That shift towards client-first approaches continues at pace, recognises Phil Lewis, director of digital experience at retail specialist Boden. Lewis works in partnership with the firm's IT director to shape how the business uses digital systems and services to meet its aims. Across all these activities, the customer is key.
"I think a big part of the future of IT and digital leadership is going to be about customer focus and understanding how technology can enable change, rather than just provide capability," says Lewis. "Digital-savvy executives understand there is a transition from seeing technology as a cost centre to a value enabler. If you make that happen, you become a business partner."
More than half (55%) of boards say enhancing customer experience is one of the key priorities they expect their IT organisations to address, according to recruitment firm Harvey Nash and consultant KPMG. Their research suggests customer-centric organisations are 38% more likely to report greater profitability than ones that are not.
KPMG director Peter Ironside says the research, which is an annual survey that polls almost 4,000 CIOs around the globe, proves the importance of a client-first approach to digital leadership. "Make sure you're helping to ensure the whole organisation is focused on the importance of customer experience," he says.
"Five years ago, the focus was on keeping the lights on today, CEOs ask prospective CIO candidates a host of different questions, such as those about experience, innovation and governance. Ultimately, CEOs want to know that their digital leaders understand the customer, the organisation and how they as CIOs are going to add value."
Not all CIOs are equal
Yet focusing on customer demands is not necessarily as straightforward as it sounds. While most organisations aspire to enhance the customer experience, Harvey Nash and KPMG's research suggests many firms struggle. Just 27% of businesses were deemed 'very effective' or 'extremely effective' at dealing with customer experience.
Some executives, however, are making headway. As CIO of logistics specialist Hermes, Chris Ashworth is placing the customer at the heart of his digital transformation strategy. The firm is due to launch a new app for end-customers later this year. This app will focus on a range of parcel-based activities, including send, diversions, returns and communications, allowing customers to interact with Hermes to find out where a parcel is located.
"We're just trying to make stuff really simple and convenient," says Ashworth. "That resonates for our retail clients, too. They don't have to spend money sending return slips with the parcels they send to customers. This paperless solution removes cost for retailers."
Ashworth is running a Digital Futures programme at Hermes, which aims to create smooth-running processes for its retail clients and their customers. The programme includes a range of initiatives, such as the implementation of web bot technology to help automate simple queries in call centres, and Hermes Play, a project that allows retail clients to create personalised labels, such as birthday messages for customers.
"We're using data and technology to create a much more proactive and positive experience for our customers," says Ashworth. "All the foundations we've put in place for dealing with real-time events are going to lead to a great operational step change without putting a lot of cost into the business."