The CIO: The cloud changes the game even more

  • CIO’s role no longer about building, managing and delivering IT services
  • They would have to act as integrators and aggregators of cloud services

The CIO: The cloud changes the game even moreTHERE has been a lot of discussion over the last few years about the changing role of the chief information officer (CIO) with the advent of cloud computing. The traditional view is that CIOs can no longer just focus on strategic investments in, and use of, IT, but need to plug into management and business issues.

Armonk, New York-based IBM has an even more radical view of the role of the CIO in the cloud era, when IT can be delivered without boundaries. “We see the role of the CIO changing profoundly,” says Rich Lechner, vice president of cloud and services marketing at IBM.

“In many ways, the role of the CIO has always been about building, managing and delivering IT services. Going forward … the CIO will be the service integrator and aggregator,” he adds.

Lechner’s conviction comes from a recent survey IBM commissioned the Economics Intelligence Unit to conduct with IT and business leaders from companies of varying sizes across the globe.

Asked their reasons for adopting the cloud (more than one reason was allowed), 57% cited cost and competitive advantage. Interestingly, 62% said it would allow them to increase collaboration with external partners, 56% said it would allow them to look into new delivery channels and markets, and 54% said it would allow them to explore new or enhance their current revenue streams.

“This is a clear indication that they’re looking at the cloud beyond just IT optimization,” says Lechner.

Nearly half (48%) of the CIOs surveyed evaluate cloud options first, over traditional IT approaches, before making any new IT investments.

When asked to name their primary focus of why they’re adopting cloud technology, 16% said the cloud now allows them to change their role in the industry they’re in, disrupt that industry or reinvent the value chain. Furthermore, more than a third (35%) said this would be their primary focus in three years.
The cloud: Web n.0

“This is a significant, transformational way of doing things,” says Lechner. “Our whole mantra at IBM is that the cloud is not about reinventing IT, it’s about reinventing business and driving topline revenue growth – that’s what the survey set out to explore.”

He draws a comparison with the Internet back in 1995. “A lot of focus that time was on the Internet for content distribution – companies were setting up websites with spinning logos and so on.

“IBM famously said at the time that this was the fireflies before the storm, that the real story was business and how the Internet was going to transform how commerce was done, how governments governed, how children were educated and how societies interoperated – and I think you will agree we’ve come to see that come to pass.

“Our hypotheses is that the same is true for the cloud, that it’s going to be much more about reinventing how businesses and societies operate than it is about reducing IT costs,” he says. “This is what these people are saying – that in three years, the cloud is going to have the same type of impact on their business.”

The CIO: The cloud changes the game even moreLechner (pic) believes that there is a danger that cloud adoption might follow the same path as client/server computing did in the 1990s, when departments bought different IT equipment leading to disparate islands of information, “different versions of the truth and different views of the customer.”

“The same thing is going to happen with the cloud if you have different departments contracting cloud services, with nobody to integrate them all. The role of the CIO would not so much be to broker these services, but to integrate them so that he can have one version of the truth, one view of the customer, one view of the business across the value chain.

“The CIO’s role in the future would be to manage this all to avoid the balkanization or fragmentation of the enterprise,” he adds.

This will become more pronounced as different departments today begin to source for their own cloud services from “cloud brokers,” a growing market that analyst firm Gartner defines as “a type of cloud service provider that plays an intermediary role,” acting on a customer’s behalf to sift through the various offerings and help or advise him on what’s best for his needs.”
It’s happening now

UK firm Gertonics is not as optimistic about the future if the CIO, saying that “the role of the CIO in its current capacity will not exist in five years’ time.”

The survey of 203 key financial decision makers in companies of 1,000 employees or more, found that almost one in five chief financial officers or CFOs (17%) believe that the role of the CIO as it currently stands is in jeopardy. A further 43% of financial decision makers believe that the role will merge more with finance and a third (31%) believe that CIOs will come from a non-technical background.

“The role of the CIO has already been subject to a number of changes in recent years, with 77% of CFOs and financial directors claiming that they have already assumed greater responsibility for IT decisions over the past one to two years.

“Indeed, respondents revealed that 38% of businesses that have rolled out a cloud computing solution had the project initiated directly by the finance department, rather than IT. A further 39% stated that they had been directly involved in cloud projects, but only after the IT department had initiated it,” Gertonics says.

IBM’s Lechner however believes that some CIOs are already taking on some aspects of this role of aggregator/ integrator, which would become dominant in no more than five years.

“Someone famous once said, ‘The future is already here — it's just not very evenly distributed’,” he says, quoting William Gibson, author of the seminal cyberpunk novel Neuromancer. “Are CIOs ready? Today they don’t have half the skillsets necessary to do this kind of integration and management. That is a shift that is yet to come.”

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