In a recent survey by Constellation Research of 119 participants, more than a third said that reducing the cost of IT delivery is the number one priority for the modern day CIO. When asked whether another priority should take precedence, however, 44 percent said that the focus should instead be on innovation. One of the main factors limiting how much CIOs can innovate is what Ray Wang, principal analyst at Constellation Research and report author, calls an organization's DNA.
"Organizational DNA plays a significant role in shaping how the CIO succeeds. Four categories emerge along the axes of innovation and impetus. Innovation ranges from incremental and continuous improvement to transformational and groundbreaking innovation. Impetus moves from reactive to proactive in approach," Wang writes in the report. Where each organization falls along the axes, Wang explains, determines how much innovation the organization allows and promotes.
There are a variety of additional challenges that CIOs face as well. According to the research, organizations that require the CIO to report to the CEO tend to represent more innovative organizations that "value the impact that technology plays in enabling business innovation," according to the report. Yet roughly 45 percent of CIOs report to someone other than a CEO, president, or COO.
Infrastructure projects put stress on the CIOs as well; Constellation's surveys have revealed that between 70 and 80 percent of all IT budgets are focused on infrastructure projects. Until CIOs can reduce their IT spend, the report suggests, the CIO will continue to play the role of the chief infrastructure officer, leaving little time to focus on innovation.
Despite the challenges, Wang maintains that CIOs can find ways to propel innovation throughout their organizations. "Savvy CIOs will know how to maneuver around these layers to drive innovation. The CIO has a role in enabling innovation across the organization. More importantly, the CIO should not stifle innovation but enable and accelerate it. The CIO should also make sure that fast innovation becomes a success and not a money sinkhole," he says.
As CIOs continue to push for innovation within their organization, Wang also predicts that a new role—the chief digital officer—will soon emerge and consume the roles of the chief innovation officer and the chief intelligence officer. The existing leadership structure is not effective for driving the change required to excelling in the era of digital disruption, according to the report, and the introduction of a chief digital officer will be needed to guide organizations through the transition.
"The rise of the chief digital officer is here. The mandate is to find and apply technology innovation that supports the business strategy or to craft new business models with emerging digital technologies," Wang says. "Constellation expects organizations that embrace this approach will differentiate themselves with higher margins, greater market share, increased brand relevancy, and massive scale. CIOs seeking the next pathway should consider the requirements for success in digital business."