The rise of the chief integration officer

The growth of cloud and the rise of shadow IT won't kill IT departments any time soon, says Deloitte

Chief information officers may have shrinking budgets and shrinking teams but the importance of technology to enterprises means that CIOs and their IT organisations will continue to play a vital role in businesses.

One of the headline developments in Deloitte's latest Tech Trends report is the changing role of enterprises' central IT departments and CIOs as other business functions spend increasing amounts of money on technology.

"The chief information officer is feeling pretty threatened right at the moment," said Deloitte's Robert Hillard, who leads the company's Australian Technology Consulting practice.

"There are a whole range of new C titles floating round – everybody's calling themselves a chief. Chief marketing officer, chief customer officer, chief digital officer. Everyone is trying to claim a chief space and they've all got a technology angle to what they do."

The role for CIOs will be to integrate technology, rather than owning all the technology across the organisation, Hillard said.

"It's about bringing that technology together and not worrying about the fact that the chief digital officer or marketing are building their own technologies and we have business units who've taken responsibility for their own technology through cloud and being able to provision services really quickly — but you actually need the CIO to be integrating it and taking an enterprise-wide view.

"We might have seen the CIO of years gone by having to manage really big budgets and deliver projects on time and to that budget. Now what we're seeing is they're actually managing smaller budgets and smaller teams but they have a far more strategic role."

More than a fifth of the spending on information technology by Australian businesses is taking place outside of IT departments, according to research released earlier this month by Telsyte.

A survey of 424 Australian CIOs and other ICT decision makers by Telsyte revealed that 79 per cent of them worked in an organisation that had a least one line of business with its own IT budget.

Read more: In brief: Government adds suppliers to cloud panel

Hillard said that CIOs could draw an analogy between changes to their role and the evolution of the chief financial officer position.

"CFOs of the 1960s and 1970s had huge clerical teams who were responsible for executing the clerical finance function for the business. Roll forward today and much of that has been automated and distributed out across the business, but the CFO today has a much more strategic role."

CIOs need to have "line of sight" rather than "line of control".

"They need to bring together a team rather than to drive individual projects, so it looks a lot more like an ecosystem," Hillard said.

Read more: In brief: Government boosts cloud services panel

Cultivating tomorrow's IT leaders

Hillard said that the generation of IT workers who built many of enterprises' core systems is in the process of retiring, but the number of IT graduates with skills to maintain and build on those systems has plateaued.

"Certainly we haven't seen the growth that would be easily justified by the volume of needs that organisations have," Hillard said.

Read more: Australian HR SaaS provider invests in growth

"One response was to outsource and offshore. Offshoring and multi-shoring has a role, but it only goes so far, and in fact what people found is if you take too much offshore you lose innovation, you lose the ability to interact directly with the users of the technology and organisations lose agility.

"For that reason many companies have not only reduced their rate of offshoring, they've reversed it. So while the quantity of offshore jobs has increased, that actually reflects the increase in the total amount of technology-related work that's happening."

Cultivating the IT workers of tomorrow will involve making sure there is a full career path for them within the organisation. Businesses should "hire differently and not hire simply from traditional sources," and be willing to cross-train.

"Cross-pollinating teams with both the young and old helps new hires gain practical experience with legacy systems and encourages established employees to broaden their skill sets into new areas," the Deloitte report states.

"Isolated, commoditised skills will likely be outsourced or automated over time through machine learning, artificial intelligence, and advanced robotics that replace blue-collar, white-collar, and so-called 'professional' jobs. With this shift coders, architects, and engineers become even more important, and multiskilled players with deep institutional knowledge will continue to be critical. Identify, nurture, and seed the new breed, and introduce change team by team, project by project."

Organisations should "embrace virtual working to allow knowledge workers to work from wherever they are in far more creative ways rather than forcing them to fit into the straightjacket of a 9 to 5 office environment in one location," Hillard said.

"Organisations need to set policies that guide, govern, and support workers’ evolving adoption of external devices, applications, data, and collaboration," the report states.

"Spend your energy attracting, challenging, and rewarding the right kind of talent instead of succumbing to legacy organisational constructs that are no longer relevant — unleash the IT worker of the future on your business," it advises.

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