Saturday, February 7, 2015

(The Big Disrupt) Shadow IT: Why CIO’s are becoming one of the most important yet irrelevant members in the C-suite at the same time

No job in the C-suite is easy but thanks to onset of technology like the cloud and big data, a CIO’s already difficult job has gotten a little tougher.

In an age where CIO’s relevance is being openly questioned, CIO’s are being asked to deliver business value while at the same time being undermined by other C-suite executives, most notably chief marketing Officers (CMO), who are turning to vendors outside the business for IT solutions (particularly cloud and big data solutions) bypassing their CIO and IT department in the process.

This process wouldn’t be so bad if CIO’s where given a heads up on the adoption of new technology and a number of prominent CIO’s weren’t trying to sell this process as a positive. In an interview with PC World, Ramon Baez, CIO of HP, makes the point that “innovation just doesn’t reside in IT—it’s all over the map” which is all well and good but he knows full well that there’s a problem when the CIO, the head of IT, isn’t leading innovation in a business or at the very least leading IT buying decisions[1].

Then again, this really isn’t Baez’s problem on the whole as he works for a company that’s in the IT vendor business that’s largely fuelling debates over the role of the CIO in the first place. This “shadow IT” phenomenon has become widespread as according to a study by BT “the practice is now common, with 76% of CIOs seeing it within their organizations. On average, shadow IT now accounts for a quarter of an organization’s IT spend”[2].

What this really means is that CIO’s are going to become integrators as opposed to innovators with the aforementioned growth of other departments buying their own IT solutions. Countless articles have sold as a positive outcome but I doubt there an IT executive in love with the fact that IT journalists, consultants and researchers are stressing the positives of CIO’s losing control over a number of their organization’s IT functions and shadow IT decimating their budgets.

Sure there’s value to the business in cutting IT costs and making CIO’s do “more with less” (arguably the most depressing mantra of the modern age), but what’s a CIO do when more and more IT functions move to the cloud? The answer lies in CIO’s seeing this as an opportunity to add value to the business which is fine but what this really means is that CIO’s are going to be accessed by business than IT metrics more than they ever have been.

However, in light of CIO’s having less control over IT and a slimmer budget, this has put CIOs on the radar of their boards as they realize despite the sinking budgets, BYOD, and the growth of shadow IT all over the C-suite, the success or failure of many a business is going to depend heavily on how good or bad their CIO is in handing the integration of new technologies into their business processes whether they like it or not.

In this new role where CIO’s have to add value to the business, they will have align well with other executives in the C-suite particularly the CMO however, that doesn’t seem to be going so well.

Much has been said and written about the clash between CIO’s and CMO’s due to CMO’s being  by far the leading procurers of outside IT solutions in the C-suite to the point Gartner were confident enough to predict that marketing will spend on IT than IT departments in the next two years. If this supposed rift between CIO and CMO has any truth to it (many a CIO and CMO has denied tension between the roles vociferously), this is bad news for any company looking to make their digital transformation seamless as no company, no matter how much cash it has to burn or how great their product is, can afford to have their IT and marketing executives at loggerheads.

The truth is that from this point forward, CIO’s and CMO’s are going to be an organization’s most important hires as both are already at forefront of the big data revolution and will be the main beneficiaries of explosion of data that will provided by the Internet of Things. With this in mind, an alliance between IT and marketing is not only preferable but critical.

In sum, CIO’s are confronted with a unique scenario where they’re in crisis yet confronted with opportunity and it depends on the mindset of CIOs whether he or she embraces or fall victim to one or other.

[1] J. Jackson, 2014,  HP CIO Ramon Baez sees your future in the cloud,
[2] IT Online, 2015,Shadow IT inspires CIO Renaissance,

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