The CIO in the Age of Analytics: From Infrastructure to Insight

Author: Joseph Baird

I have been advising senior executives for much of the past twenty years.  Many of my clients have been Chief Information Officers and it has been remarkable to see this role change during this time.  In the pre-2000 period, IT was seen as a strategic advantage and the move towards the web gave the CIO a very important seat at the table.

But as the decade wore on,  and the globalization of IT occurred, the role became more about managing down costs, the stabilization of ERP and operational systems and the providing of infrastructure for a mobile workforce.  Cost containment and predictability ruled the day and the job was more about Infrastructure vs. Information.

The CIOs that thrived during this time period were skillful administrators, negotiators and technology generalists. Their backgrounds mostly were from within the IT organization or Finance.  This served companies very well in this period of stabilization and commoditization of core IT services.  As the famous Harvard Business Review article  proclaimed IT was perceived to no longer be strategic but rather a cost center that needed to be aggressively managed.

The role of the CIO became more about defending vs. attacking and many who assumed these leadership positions were not natural risk takers but risk managers.

And then the ground shifted…the age of the smart phone and tablet has ushered in a new wave of business models in which the consumer knows more than ever before about what, where and how they want to engage.  We are awash in Big Data Hype and the same HBR has now proclaimed….

Now these same CIOs are being asked to develop new consumer facing technologies and create solutions that can take advantage of Big Data.   But the skills and operating models necessary during a period of modest innovation and cost containment are not the same as required for the Age of Big Data.

The skills for data scientists, app developers and others may not only be hard to find but also are at a much higher price point.  This is creating challenges for CIOs who are far from comfortable taking the risk of these hires or the necessary experimentation and controlled failures.

I believe that multiple operating models are and will continue to emerge.  In the case where the current is not suited to extend his or her skill sets into the required areas, the role may be split. In other words, the traditional CIO may need to focus on infrastructure and senior management will need to hire a leader to drive the analytics initiatives forward.

CIOs should recognize that this model has a risk of driving the relative value down of the traditional role.  This model will likely occur where the CIO does not have a history of an operating role either in sales, product development or supply chain.

For those executives who want to make the leap to Chief Insight Officer, I offer a few words of advice.  First of all, recognize that the core skill gap is not technology but technical.  That is, emerging Big Data technologies are fairly easy to understand. The technical aspects of data mining, visualization and process optimization are not.  Spend more time understanding the appropriate use of techniques than you do on a specific technology or vendor. 

Further, successful analytical transformation is all about adding predictive or prescriptive insight to core business processes. As such, knowledge of these business processes is essential.  The CIO who partners with the business to build deep knowledge about the nature of the business will become essential. The ability to apply new technology and techniques to these processes is the holy grail.   The development of six sigma and other process mapping and optimization skills on your team should be a top priority.

Finally, get comfortable with the development of business cases that justify your investment in people and other resources.  Your success demands the formation of a A team who can deliver extraordinary results.  This will not be the low cost provider.  The Chief Insight Officer must confidently build investment cases to acquire this talent and deliver on the investment required.