Tech Insights

2018 global CIO survey, chapter 2

Tech Insights

August 8, 2018

CIOs need to be bilingual in an organizational sense. To champion digital solutions that best serve the business’s needs, they must be fluent in technology—but they also need to speak the company’s language.

Nearly everyone who has traveled overseas knows the difficulty of conducting even simple transactions with someone who does not share your language. Building a meaningful, influential relationship can be next to impossible.

That’s one reason why, for years, CIOs have been encouraged to learn the language of business—and many have become fluent. But as technology increasingly accelerates organizations, it can be equally important for the business to understand the language of technology. From the board and the C-suite to functional leaders and staff, everyone across the organization should be tech fluent.

Of course, it can be unrealistic to expect any executive to grasp all the IT jargon that rolls off a systems developer’s tongue. But employees across the organization can try to understand three dimensions in which technology can enable business performance and growth:

  • Creating value. Digital and other emerging technologies can help empower the business to streamline processes, engage employees and customers, and drive new business models.
  • Rewiring the business of technology. Achieving this value can depend on transforming how organizations budget, fund, prioritize, and deliver technology solutions.
  • Developing priorities. A strong technology foundation can’t be short-circuited by shiny new technologies. Modernizing the core IT infrastructure to support business ambitions should not only be on the road map but also recognized as a strategic priority.

Section 1: Look inward

More than half of CIOs surveyed are focused on efficient, reliable IT operations. Unless they transform themselves—and their organizations—they may fall short in meeting mandates for business growth and transformation that are increasingly driven by digital capabilities.

A CIO—especially a business-savvy CIO—can play an important role within the company as a technology interpreter, influencer, and visionary. But that typically requires strong relationships across the organization. One important way to cultivate those relationships and increase influence is to help organization leaders become tech fluent.

What is tech fluency?

Tech fluency—the ability to broadly understand and confidently discuss IT concepts1—can be an important skill for C-suite leaders, board directors, and employees throughout the organization. By promoting tech fluency and expanding it throughout the business, CIOs can help create a shared baseline of knowledge that engages leaders and employees and helps optimize technology’s impact.

For example, business leaders who understand the fundamental concepts and benefits of technology solutions may be more likely to approve, fund, and participate in those initiatives. Developers, strategists, sales executives, and marketers can collaborate more effectively on products and customer tools.

An effective tech fluency program could include major systems and concepts such as:

  • The core systems supporting the IT environment;
  • Internal and external systems that enable major business functions (for example, finance, customer service, data management, cybersecurity, and sales);
  • The company’s business model, including the levers of profitability, technologies supporting business strategy and revenue generation, and the influence of technology on the business model over the last decade;
  • Broader disruptive technology forces (for example, cloud, cognitive, and blockchain); and
  • The role of technology in supporting market participation and fostering competitive advantage.

By leveraging their technology and business expertise to develop and drive tech fluency, CIOs can help enable organization leaders and employees understand and maximize technology’s potential.

Tactics for enhancing tech fluency

Business leaders often enjoy invoking new digital capabilities such as AI and augmented reality. But bring up risk management and the interdependencies of the current IT environment, and you’ll likely hear crickets. Flashy digital capabilities may generate all the headlines, but they are built on a strong technology core and depend on hardware and software that are usually much less colorful.

Enterprisewide technology literacy requires more than one-off watercooler conversations. A well-structured education, communication, and engagement plan can help. While nearly all surveyed CIOs (96 percent) consider educating the business about technology issues to be one of their responsibilities, only 66 percent have developed proactive educational initiatives that reach beyond the executive level to help build tech fluency across the organization.

CIOs of baseline organizations tend to rely on ad hoc tech fluency exchanges such as bringing new and emerging technologies into strategy conversations (72 percent) and conducting one-on-one technology discussions (51 percent). Fewer use broader approaches that target the organization when compared to digital vanguard CIOs. For example, 34 percent of CIOs of baseline organizations hold enterprisewide briefings on technology fundamentals, compared to 44 percent of those in digital vanguards; and 30 percent of baseline organization CIOs recommend and provide training on key technology topics, compared to 43 percent of those in digital vanguards (see figure 7).

Not only can these tech fluency labors help CIOs build strong business relationships, they can also help develop organizational support for digital strategies and burnish the CIO’s image as an organizational leader.

CIOs can develop initiatives that drive up organizational tech fluency through broad-based programs, followed by individual curricula for specific audiences based on their needs and interests. Framing the conversation around specific technologies and issues and their business implications can help prevent business stakeholders from getting caught up in external hype. This usually requires careful planning along with customized learning via both formal and informal channels.

CIOs consider it their responsibility to help the business understand technology, but many have yet to develop comprehensive tech fluency programs

In order for IT to be invited to the table as a strategic partner, we have to build credibility by delivering a highly available and secure production platform and by delivering successfully on major change projects. When those fundamentals of IT are in place, you can hold a conversation about how to make technology a competitive advantage for the business. — Rahul Samant, CIO, Delta Air Lines

From colleague to influencer

Strong relationships can be essential for CIOs looking to elevate their roles and become organization leaders. CIOs report strong relationships with certain peers—especially back-office leaders—but even these relationships often tend to be transactional and ad hoc. Their relationships with executives in customer-facing functions such as sales, marketing, and product development/engineering are weaker (see figure 8).

Digital vanguard CIOs are more likely to have strong relationships with both front- and back-office functions

Our research shows that CIOs are 1.5 times more likely to report having a strong or very strong relationship with other business functions when they customize their tech fluency efforts. CIOs in digital vanguard organizations, comprising 10 percent of survey participants, are also more likely than their peers in baseline organizations to report strong or very strong relationships with other business functions, particularly customer-facing teams.

Sixty-eight percent of digital vanguard CIOs report strong or very strong relationships with other business functions compared to only 60 percent of those in baseline organizations. The gap between CIOs in digital vanguards and those in baseline organizations is even more apparent when examining customer-facing functions: Sixty-five percent of digital vanguard CIOs report a strong or very strong relationship compared to only 50 percent of those in baseline organizations.

To fulfill the business mandate to grow revenue and transform business operations, CIOs should consider developing technology fluency initiatives for both customer-facing teams—the revenue engines—and back-office functions, the fuel that keeps the organization running. Their differing needs may require customized technology fluency programs.

On the flip side, CIOs and IT teams also should be more fluent in understanding and addressing customer needs and expectations. More than half of IT teams collaborate with the business on projects to design and deliver customer engagement platforms (62 percent) or design customer products and solutions (55 percent). But fewer are involved in proactive measures such as introducing new technologies to improve customer engagement (48 percent), establishing joint processes with marketing and sales (42 percent), or analyzing data for customer insights (36 percent), all of which could result in stronger understanding and appreciation of customer needs and ultimately enable the business to develop better customer solutions (see figure 9).

CIOs can establish joint processes and analysis capabilities to better understand customer needs and develop customer-facing solutions

By deepening their interactions with customer-facing business units, CIOs can gain opportunities to initiate digital strategies to grow customer loyalty and revenue, which could help them evolve from order-taker to business adviser.

Digital is transforming B2B industries such as ours to the point that our customers expect B2C experiences. We simply cannot operate without transformative technology. Whether it’s providing the best customer experience, driving more value to customers, or delivering top-line and bottom-line results, technology is more than an enabler—it’s like the air we breathe. — Joel Grade, EVP and CFO, Sysco Corporation

Face time with the board matters

The CIO’s tech fluency strategy can be extended across the organization to its board of directors through consistent interactions and technology-focused conversations.

A company’s financial performance can be directly linked to the tech fluency of its board of directors. A Deloitte study of US public companies shows that S&P high performing companies—defined as those that outperformed the S&P 500 by 10 percent or more over three years—are nearly twice as likely to have at least one tech-focused board member than lower performers (32 percent versus 17 percent).2 And that’s where the CIO can come in.

CIOs should strive to be executive leadership’s trusted adviser for all things technology. And CIOs who have built their credibility with functional and C-suite leaders are more likely to be invited to the boardroom. “Boards expect CIOs to do more than provide operational excellence in managing risk and security,” says Peggy Foran, chief governance officer, SVP, and corporate secretary of Prudential Financial Inc. “Boards tend to look at technology from the perspective of risks rather than opportunity, but they also expect CIOs to focus on innovation, products, solutions, and trends that transform businesses. If I were CIO, I would make it my mission to play not only defense but offense.”

When it comes to board and subcommittee meetings, frequency matters (see figure 10). When CIOs interact with board members only annually, 91 percent focus on IT risk and cybersecurity, giving lesser attention to digital/innovation (39 percent) and technology return on investment (9 percent).

An increase in frequency of interaction with the board and subcommittees often leads to more strategic technology discussions

As the frequency of CIO and board interactions increases, the topics they discuss can become more balanced between technology risk and opportunities. For example, when CIOs meet with the board monthly, digital and innovation are discussed 75 percent of the time, with IT risk and cybersecurity dropping to 54 percent. Also, they are more than twice as likely to discuss technology ROI, increasing from 9 percent to 23 percent. This doesn’t mean that IT risk becomes less important—more likely, there’s simply more time to discuss a wider range of technology topics and enhance the board’s tech fluency. Digital vanguard CIOs are slightly more likely to meet with board members on a monthly basis (38 percent) than CIOs of baseline organizations (33 percent).

It’s a two-way street

Technology fluency can be the vehicle for CIOs to take their stakeholder relationships to the next level. It can allow them to present a technology solution based on a business need and give them the opportunity to proactively equip and train their stakeholders to understand and engage with technology and ultimately drive business value.

You’ll know your tactics are working when business leaders—both back-office and customer-facing—and board members come to you for advice to help solve business challenges. Technology fluency can help you build stronger relationships with key stakeholders and gain valuable insights into the needs of the business, allowing you to increase your credibility as an organization leader.

Originally published at Deloitte Insights

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