Three Takeaways On Today’s Revenue-driven CIO
Technology is dramatically changing business, and the role of the chief information officer (CIO) is transforming from a back-office operator to a front-line executioner of company strategy through the utilization of data and technology. That trend is primarily driven by the introduction of many digital native businesses, and the desire of entrenched brick and mortar organizations to become digital first businesses.
We recently hosted our third annual CIO Summit, which brought together CIOs from Global 2000 organizations to share best (and worst) practices and network with the latest Silicon Valley innovators. The key theme this year was the future CIO — what the CIO of tomorrow will need to do, know and explore.
At Sapphire Ventures, we’ve always believed in the power of CIOs to drive organization-wide change and innovation. Where CIOs were once seen as gatekeepers of a cost center, we’re increasingly seeing CIOs at the center of driving revenue and opportunity for their companies. The Summit was a deep exploration of how CIOs will handle and excel at these responsibilities with an agenda that touched on topics from deploying hybrid clouds in the enterprise to best practices for CIOs absorbing cutting edge innovations.
Below are three takeaways on the future of the revenue-driven CIO from our 2017 CIO Summit.
1) The CIO as revenue enabler
The contemporary CIO is inextricably tied to the revenue generating functions at their organizations. A recent study by CIO Magazine showed that the number one priority the CEO has for their CIO is to drive revenue with nearly 50 percent of CIOs now reporting directly to the CEO (in comparison to 2013 where only 39 percent did)[1]. We’re seeing more CIOs take a seat at the table as a front-line participant in high-level decision making.
With this shift, CIOs today are positioned to help organizations reach revenue goals through technical and organizational prowess. They can be the architect of how the business runs. As agility, data and innovation become technological imperatives, CIOs are increasingly taking the reins over software adoption in the modern workplace. They shape how the work is actually done and are at the forefront of security and software adoption company-wide. And they do it in a critical time where the workforce is rapidly changing, and millennials — who are digital native users — become the majority in the workforce.
CIOs are also becoming more responsible for improving the relationship between data and technology. Data can be very valuable, but only if it’s usable. While our technological landscapes create huge potential for data creation and collection, data often resides in silos, diminishing its potential for valuable insights. The modern CIO oversees utilizing technologies and cloud environments to maximize their company’s data use.
2) The modern CIO is scouting emerging technology
The lines between the traditional definition of CIO and CTO roles are blurring. The CIO of years past was typically business educated with some technical knowledge. Said Chris Patrick, head of the CIO practice at executive search firm Egon Zehnder who attended, “I see more and more CIO job descriptions that entail computer science or equivalent background as a pre-requisite.”
Now, CIOs need a developed understanding of technology and need to be able to think critically about investing and adopting new technology that will move the needle for the business. With an exponentially growing startup ecosystem, relying on partners such as VC firms are critical in separating the signal from the noise.
Another guest, Clark Golestani, CIO of Merck, said that CIOs who want to embrace startups should focus their intents.
“The challenge that you’re trying to solve needs to be pretty distinct and pretty clearly defined,” said Golestani. “And then the question becomes how do you create the model where you’re able to do dozens of these integrations effectively and drive that innovation across your business.”
These best practices for integrating emerging and new technologies are the key for CIOs who want to use startups as partners that will help drive business. “At Barclays,” said CIO Sameer Jain, “we use our VC firms to help us really home the companies that we should be involved with. We take these relationships very seriously, and we hold people accountable when they’re working with our startup companies to build successful partnerships.”
Codifying this process for identifying problems and the startups that can solve them is critical for successfully scouting technology as an enterprise.
3) Security is at the forefront of the CIOs technology strategy
It’s no wonder that security has become one of the biggest concerns for enterprises today. No longer does management have full control over deciding what software to purchase and how to implement it. Today, individuals or teams adopt software tools that can bring innovation, but can also bring security and compliance risks.
Sanjay Beri, CEO and founder of Netskope, cited an important stat: the average corporation has more than 1,000 cloud applications being used by employees, but the IT department typically underestimated that figure by an order of magnitude! Left unchecked, the adoption of “shadow IT” — or IT systems used within an organization without approval — inflates costs and compounds security concerns.
In today’s mobile, digitally native workforce, these problems are only amplifying, and the CIO, acting as a bridge between business and technology, will be at the forefront of solving — and more importantly, preventing — security problems.
To combat this, Bruno Kurtic, vice president, product and strategy at Sumo Logic suggests companies should approach security like they approach application development — in an iterative manner, building security into each layer.
“There’s a fundamental difference between what a cloud and on-premise world looks like, and people have to adopt a different mode of thinking, from cloud security to culture, as they adapt,” said Kurtic. “The way we see people attack this problem is to build security into each layer, because in the cloud universe each layer is porous. There is no defined perimeter.”
This Is Just Beginning
Although our conference has wrapped, our thoughts and ideas about the future role of the CIO are still firing. We’ll be sharing more about modern CIO, contemporary IT infrastructure for the enterprise, the role lines of business (LOBs) will play and more as our own conversations stemming from the conference develop.
Look out for video footage from the event and more thoughts by partners at Sapphire Ventures on the role of the CIO in the coming weeks.
[1] CIO’s 16th Annual State of the CIO survey, January 2017
Disclosures:
The information set forth herein is not intended to constitute investment advice and under no circumstances should any information provided herein be used or considered as an offer to sell or a solicitation of an offer to buy an interest in any investment fund managed by Sapphire Ventures. Sapphire Ventures does not solicit or make its services available to the public and none of the funds are currently open to new investors. Past performance is not indicative of future performance.
The portfolio companies referred to above do not necessarily represent all of the investments made or recommended by Sapphire Ventures, and were not selected based on the return on Sapphire Ventures’ investment in them. It should not be assumed that the specific investments identified and discussed herein were or will be profitable. Not all investments made by Sapphire Ventures will be profitable or will equal the performance of the companies identified above. View all of Sapphire Ventures’ investments here.
