The Ever-Changing Role of CIOs

Steve Brescia, Divisional CIO, American Water Enterprises
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Over the years, we have witnessed a massive change pertaining to the role of CIOs depending on the organization, the industry, the business strategies, the prevailing market conditions, and the financial climate in terms of business value. How would you describe your own role as CIO has changed in the past couple of years?

During my half hour drive to the office during the week, I often think about what might be in store for me theday. What challenges and opportunities will be there waiting for me? What decisions will I need to make immediately and which onesshould I let simmer for a while? Truth is, I can never be sure what the day will bring, but I do know -- it will always be interesting!

As Divisional CIO for American Water Enterprises (AWE) I have the responsibility for providing information technology services to our market-based operations which represent about 10 percent of American Water’s revenue. My job, however, is about more than just the technology. It is the near constant interaction of people, process, and technology that leads to the best innovation to benefit AWE’s business objectives and the most effective and efficient operations of our information technology systems. In the end, the interactions I have with employees, end users, stakeholders, partners, and vendors represent for me a shift in responsibilities for the CIOs. That shift is less about technical competence or wizardry and much more about demonstrating business acumen, providing business solutions that leverage technology, and building strong business partnerships.

Rise of the Millennials

As always the most challenging and rewarding part of my role is attracting, maintaining, and developing skilled, enthusiastic people. That seems to have become more challenging every year, as the choices available to candidates are increasing as the economy becomes more stable and growing. In addition, the influx of millennials into the work force is continuing to have an impact on IT departments, specifically, and organizations, in general. Today’s CIOs not only must be focused on salary and status, but also newer motivators like offering flexible work schedules, challenging work assignments, frequent performance feedback/encouragement, and career development opportunities (often on a quicker time schedulethan previous generations are accustomed to). Millennials also want to be engaged in something bigger than them and yet they have a natural distrust of management, they expect to be trusted, and yet don’t always assume positive intent. Successful CIOs will be able to develop and enrich all employee generations so as to increase employee satisfaction, drive productivity, and achieve success.

Building Business Relationships

Building successful relationships with “the business” or “the internal customer” is nothing new, but today CIOs are faced with a complex combination of ever changing business directives, the constant pace of technology innovation, and alignment of technology solutions with business goals. Now more than ever, the key to success for CIOs is understanding the business’ imperatives and applying that understanding to shape IT’s approach to providing valuable services to the organization. Further, it is important for CIOs and IT leaders to be able to identify people in their own organization with the skills to engage and partner with stakeholders in the business. This needs to occur at many levels of the organization, not just in the upper levels. IT organizations with a shortage of suchresources dedicated to building business partnerships should re-evaluate the roles, resources, and organizational structure within IT to develop superior business acumen and to better support the business objectives.

“The key is finding the right mix where there is a clear focus on cost efficiency and yet innovation can thrive”

Equally important is aligning the competencies of IT with the business or industry in which one finds oneself. “Doing IT for IT’s sake” is a long gone concept, but I find that it still creeps into IT’s consciousness from time to time. Yes, governance, standards, repeatable processes, policies, practices, and adherence to these disciplines are still necessary to the functioning of IT departments, but they need to support business goals and not just exist because “we have always done it that way.”  Too often, I have seen these to be unnecessary blockers to the innovation and change which has always been the greatest promise of technology.

CIOs and business leaders who can foster an environment where engagement and deeper partnerships are cultivated and celebrated will be able to effectively capitalize on the right technologies that will fuel the achievement of business objectives.

Supply Chain Relationships-Balancing Vendors – Key Partners/Best of Breed

I think the most interesting swing that I have seen in the last few years has been the movement away from “best of breed” solution selection toward more of a “single solution” with a few key IT partnerships. This approach may be considered ironic, since there remain inexhaustible supplies of technology vendorswith capable, cost-effective solutions. IT departments seem to be taking a tiered approach to their technology partners. They are categorizing their partners: platinum, gold, and silver – just like vendor service level approaches. Essentially, a few key partner relationships drive decisions and solutions. This approach essentially means that IT evaluates potential solutions by looking at“platinum” partners firstand choosing that partner’s technology solution even when it does not fulfill 100 percent of the requirements. If the gap is too great between what the “platinum” partner can provide and what is expected from the business, then the next tier of solution providers are evaluated. The primary driver of this behavior is that integrating solutions from “non-platinum” partners often results in additional costs and schedule delays. However, it’s important to realize that “platinum” partners won’t always have the technology solutions necessary to support the achievement of business imperatives.

Interestingly, the pervasiveness of “shadow IT” is in direct competition with this approach.“Shadow IT” occurs when the business makes technology enablement decisions on their own (without consulting with IT) and acts on those decisions by engaging in technology service agreements, and purchasing software.  In general, I believe CIOs should work to embrace “shadow IT” and/or at least to understand it rather than fight against it. They should use it to enhance the “key partnerships” approach where necessary. Often, “shadow IT” houses the innovation necessary for the business to take the next forward leap. As technology becomes more accessible to the business and easier to integrate into their business processes, these challenges will only increase and are likely to drive IT organizations into a more de-centralized organizational construct so that the technology skills are more local to the business need.

Cost Efficiency or Innovation? Actually, Both…

As I observed and interacted with CIOs over the last few years, it seemed to me that there continues to be a great struggle between efficiency and innovation. Now that I have been performing the CIO role for the last couple of years I understand more of the struggle. The key is finding the right mix where there is a clear focus on cost efficiency and yet innovation can thrive. Ultimately, it is important that CIO’s know the tolerances and expectations for these within one’s own business organization and culture. In some cases, business stakeholders are willing to sacrifice cost efficiency as resources are redirected toward innovation. In other cases, IT needs to be able to demonstrate clear operational efficiency improvements that have resulted in cost reductions. Knowing which level to pull on and when it a strategic skill for today’s CIO.

CIOs have the opportunity to mix people, business relationships, solution partners, technology, and lead innovation while efficiently “keeping the lights on” for the organization.  Perhaps that is the greatest challenge for CIOs as we head toward the second half of this decade.

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