2022 CIO Agenda: The Action Plan to Master Business Composability
With the post-pandemic economy taking shape, CIOs can evolve IT’s mission to shape the business.
Business composability is not a new concept. In fact, most businesses already follow some of its principles in some way. However, where your organization falls on the scale of low, moderate or high composability will determine how effective your operating model is. It’s not enough to simply add new technology in an attempt to create modular business pieces. The changes must be strategic, and they must be scaled across the organization.
Outdated operating models focus on efficiency and assume an orderly, slow-changing and relatively predictable business environment. Organizations that lean into this reality and leverage their innovation capacity, technology and reach to deliver the scale and pace needed to achieve enterprise goals, will out-deliver their peers. They will not only survive but grow as a result and stay ahead of the pack.
What is business composability?
Business composability applies modularity to any business asset — people, processes, technologies and even physical assets — so that leaders can quickly, easily and safely recompose them and create new value in response to disruption. Business composability drives business performance Mastery of business composability stretches across a spectrum, from those just starting out, to those that have made business composability the default way of thinking and executing. The benefits flow accordingly. The greater the level of mastery of business composability, the higher the relative performance.
For CIOs, the challenge is how to match that boldness so they can not only enable the business’s aspirations for growth but also shape them. That challenge is all the more seminal because even a quick glance under the hood of the top goals of many businesses reveals that their goals are unreachable without technology. Like it or not, CIOs are in the spotlight.
Detailed conversations with dozens of CIOs and CEOs over the past year as well as analyses of recent research have highlighted how the IT mission is both changing and needs to change. Large incumbent companies are looking to technology to be as dynamic a force in their business as it is in so many of the start-ups that are reshaping how people work, shop, communicate, make decisions, and live. The clear implication is that CIOs need to make the leap from tech leader to business driver, and the actions they take in the next 12 months will largely determine whether their business can meet its aspirations.
As boards of directors have increased risk appetite (or plan to), an economically and politically polarized society is the biggest risk. Organizations with high composability came out of the pandemic ahead of their moderate and low-composability peers. They are faster and more effective at developing new partnerships, pursuing new opportunities, offering innovative products and being more responsive to customers, clients and citizens.
By 2026, 65% of CIOs will sustain a cycle of tech-based empowerment, agility, and resilience through collaborative governance, new service delivery models, and a business outcomes orientation.
This summed up the predictions encapsulated in the IDC FutureScape: Worldwide CIO Agenda 2022 Predictions which sees a shift in the focus of IT from business model reinvention to the remediation of technical debt to sustainable IT.
Prediction 1: Through 2026, 65% of CIOs will sustain a cycle of tech-based empowerment, agility, and resilience through collaborative governance, new service delivery models, and a business outcomes orientation.
Prediction 2: By 2023, 60% of CIOs will be primarily measured for their ability to co-create new business models and outcomes through extensive enterprise and ecosystem-wide collaboration.
Prediction 3: By 2025, 75% of CIOs and CFOs will be forced to accelerate or enact formal technical debt management practices due to project delays or failures caused by unresolved technical debt.
Prediction 4: Given the rising imperative for hybrid and smart workplaces, by 2024, 60% of CIOs will reimagine user support and create a center of excellence (COE) based teams to guide the necessary investments in technology and process.
Prediction 5: By 2026, 85% of organizations whose data practices inhibit their business and operating strategies will empower CIOs to lead cross-enterprise investments in data governance, quality, and compliance.
Prediction 6: By 2024, 40% of CIOs will fail to effectively evolve IT’s capability to deliver modern digital infrastructures, provide ecosystem tech governance, and support architecture-driven business outcomes.
Prediction 7: Driven by investor pressure to minimize SG&A expenses, by 2024, 40% of organizations will shift at least 25% of IT spending to direct cost aligned with a specific line of business products/services.
Prediction 8: Despite the cost and friction, 60% of CIOs will embrace ecosystem-wide multifactor authentication for its efficacy as an essential minimum to counter rising cybersecurity threats by 2022.
Prediction 9: By 2025, 60% of CIOs will collaborate to harness industry ecosystem capabilities as a critical source of innovation, data sharing, differentiation, and cybersecurity risk management.
Prediction 10: By 2023, businesses will require 55% of G2000 CIOs to implement sustainable IT, embedding environmental, social, and governance practices into the technology life cycle from acquisition to disposal.
In 2022, chief executives and their boards will be looking for tech chiefs to build on their recent digital transformation achievements. From assuming new responsibilities to delivering great customer experiences and onto sustainable IT, here are 10 different areas that will be key for CIOs to focus on during the next 12 months.
1. Assume responsibility for new business areas
There was a big trend a couple of years ago for CIOs to add new responsibilities to their job titles: as well as information, it became commonplace to see tech chiefs assume responsibility for technology, digital, and product. Some of these new areas of authority allowed CIOs to respond to the rise of CDOs (both chief digital and data officers). The past two years have helped CIOs prove their value to the business. However, they’ll need to assume new responsibilities going forward. Many CIOs will help oversee the move to hybrid work, so expect increased responsibility for other areas such as facilities, people and operations.
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2. Take customer experiences to the next level
2021 was a year when CIOs sharpened their focus on customer experience initiatives. From the refinement of home-working programs through to the implementation of new e-commerce channels, it was impossible to speak with CIOs without hearing about the importance of customer experiences, whether that was for internal users or external clients. Next year will see the best CIOs take their focus on customer experience to a new level. They’ll reach out to a wider ecosystem of partners from big tech firms to fleet-of-foot startups. They’ll focus on how their organizations use data to provide personalized services and products to customers.
3. Sell technology as a value generator
CIOs have been told for years to ensure they’re aligned with the rest of the business. But if they’re not doing that role by now, they’re probably in the wrong job. Technology is so intertwined with business outcomes that it would be impossible for any CIO to stay restricted to operational concerns. IT leaders have received great support for their attempts to fast-forward digital transformation plans during the past two years. Now, they need to do more and show how all kinds of technological innovations — from artificial intelligence to virtual reality — can help their business find new routes to market with fresh revenues.
4. Proceed with care as you adopt automation
From robotic process automation to low-code technologies, there’s a whole suite of tools that claim to make the application development process easier. However, automation should come with a warning: while these tools can lighten the day-to-day load for IT teams, someone somewhere must ensure that new applications meet stringent reliability and security standards. Increased automation will mean IT professionals spend more time engaging and overseeing, so focus on training and development to ensure your staff is ready for a shift in responsibility.
5. Shape the IT department of the future
With all the talk of automation and low-code development, it would be easy to assume that the traditional work of the IT department is done. Nothing could be further from the truth. Yes, the tech team is set to change, but talented developers — who work alongside their business peers — remain a valuable and highly prized commodity. To attract and retain IT staff, CIOs will need to think very hard about the opportunities they offer. Rather than being a place to go, work is going to become an activity you do in a collaborative manner, regardless of location. Give staff their flexibility and freedom they crave.
6. Manage data, security and governance effectively
Digital transformation is really a story about data. While digital transformation is tough to define, one thing is certain: organizations continue to collect and use ever-increasing amounts of information. With CIOs expected to step up and lead more value-generating projects, someone in the back office will need to ensure data, security and governance are always covered. The never-ending cyber threat and the potential for financial and reputation damage through a successful attack means CIOs will need a high-quality security chief or two, even if automation helps reduce the onerous responsibilities of some IT operational activities.
7. Start exploring quantum technology use cases
From creating time crystals to helping to discover life on other planets, quantum technology sometimes seems closer to science fiction than boardroom strategy. Quantum is often seen as difficult to understand and even harder to put into practice. Yet that’s no reason to not explore your options. Across a range of areas — such as quantum computing, communications and sensing — big tech companies and innovative startups are pushing quantum advances. CIOs should start exploring use cases now, so that they can explain to their boards how quantum might help to answer some of their business’ biggest questions.
8. Think about how the metaverse will expand
The metaverse is another trend that’s receiving a lot of attention. As with quantum, there’s a lot of scepticism about it, but while the true applications of quantum might take a decade or more to appear, the foundational technologies for the metaverse are already here. From virtual reality headsets to new types of touchless interfaces, leading-edge companies are already making tentative steps into the metaverse. With the world’s biggest technology companies investing huge sums into the area, CIOs can’t afford to hold back when it comes to researching what could be (maybe, sometime) the future of customer experience.
9. Don’t take your eyes off cloud-computing trends
It’s easy to fall into the trap of thinking that the cloud is done and dusted. CIOs have been helping their businesses to implement cloud-based systems and services for more than a decade now. However, there’s still lots of work to do. Businesses have rushed to implement more cloud services in the past two years and CIOs will have to firm up and expand these platforms through next year and beyond. Whether they go for a multi- or hybrid-cloud approach, analyst Gartner says most organizations (85%) will establish a cloud-first principle during the next five years.
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10. Make sustainability a core business priority
Growing fears over a looming climate catastrophe mean companies are keen to show their concern for the environment. However, for many consumers, many of these efforts are greenwashing rather than genuine action. The IT industry has a poor record for sustainability. The IT industry currently accounts for about 3% of global carbon emissions. The most significant contributions of greenhouse gases in this sector are data centers (45%), followed by communications networks (24%). With more than three-quarters (79%) of consumers prepared to change their purchase preferences based on social responsibility, inclusiveness, or environmental impact, CIOs must work to make sustainable IT core to their business’ activities.
Organizations need to develop business composability now!
These actions will help your organization get the biggest ROI from business composability. All enterprises, CIOs and technology executives can benefit from these actions and might already be doing them at some siloed level. Business composability is just as much a mindset shift as a strategy shift. CIOs will be responsible for encouraging a new culture alongside a new approach to flexible operational models. At successful organizations, the CIO will act as evangelist, engineer and orchestrator, as he or she views change as a tool, provides guidance on modular designs that enable change, then helps to execute it.
Composable thinking: a mindset to guide the business through uncertainty and opportunity.
Composable business architecture: a blueprint to manage the pace of business change.
Composable technologies: systems and data that integrate quickly and easily.
