IT Brief Australia - The changing role of the CIO, and what they need to know

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The changing role of the CIO, and what they need to know

By Simon Horrocks, Regional VP, ANZ, AppDynamics

The role of the CIO is changing. As organisations become increasingly focused on digital transformation, CIOs are no longer seen as purely IT-focused. They are now business executives, driving revenue rather than just controlling costs, and working with the leadership team to set the agenda for the entire organisation.

This fundamental shift is reflected in the 2018 CIO Agenda Report from Gartner, a survey of 3,160 CIOs across 98 countries. Almost all respondents (95 per cent) expect their jobs to change as a result of digitalisation, and 58 per cent identified business growth as their top priority.

At the heart of this lies an opportunity for CIOs to focus on driving business performance by optimising customer experience and delivering a digital experience that wins customer loyalty. To do this, they need the right tools to holistically capture, manage and analyse customer, application and business performance data.

Shifting role, shifting priorities

As CIOs play a larger role in the boardroom, their priorities and personal KPIs are shifting away from those that traditional IT leaders were historically measured against, to those more tightly aligned to business goals. These strategic objectives, outlined by Gartner, include growing business margins and revenue, building business agility and optimising enterprise operational excellence.

Interestingly, the same Gartner report stated top priority for CIOs in ANZ this year is Business Intelligence and Analytics, with 21 per cent of CIOs ranking it first place. Arguably, whilst many companies have launched digital services to collect data, they often still struggle to fully tap into the potential of data analytics.

Meeting broader business objectives will, therefore, require CIOs to focus much more on solutions that can identify how IT is delivering value to the business through applications. As part of this, analytics will play a central role in ensuring software is directly driving business outcomes.

Analytics and insight: the new keys to success

Developing the tools to gain close insight into application performance can empower CIOs to demonstrate how software is delivering business outcomes. With the right systems in place, application analytics can provide actionable correlations between application performance, user experience and business results.

The ability to stream contextual insights for every transaction, customer segment, code release, or complete business service is a powerful tool for understanding how application performance impacts customers and the overall business. Knowing that the most successful businesses recognise the need for exceptional customer experience, and can draw the link between optimising this experience and the impact on the bottom line, this information will be vital for CIOs as they seek to drive the digitalisation agenda within their organisation.

User experience actually costs you money

On the one hand, the number of applications in people’s lives is greater than ever. According to Gartner, there’s an estimated 5.5 million new connected things in use this year alone. On the other hand, customers expect applications to run faster and smoother than ever before. One poor experience can damage your brand’s reputation and cost you a customer for life. According to a report from AppDynamics, 80 percent of consumers have deleted apps because performance has been unsatisfactory.

Additionally, Accenture reports that 61 per cent of Australian consumers will not return to a provider once they have left due to poor customer service, with nearly half of consumers noting they’d even be willing to pay a higher price for goods and services if they were to receive a better level of service.

Therefore, CIOs that can double down on delivering optimal customer experience through performance monitoring and application analytics will find that they are in a much stronger position to meet their objectives of growing revenue and business margins.  

Taking a bird’s eye view

A holistic understanding of the business is what is required by CIOs in order to give them the necessary tools to navigate the complexities of their role and their strategies in today’s digital economy. No longer is it sufficient to have a surface view of their organisation’s application performance, noting only underperformance or dips in user experience – today’s CIO must have an in-depth understanding of APM. A sound understanding and analysis in all aspects such as product preferences, levels of privacy, spending rates and device type will allow them to prioritise and double down on opportunities for growth, all of which are informed by user behaviour. 

Since the customer journey and its various touchpoints are hugely multifaceted, it’s this exact recognition of issues, behaviours, and preferences that contribute to wider organisational understanding. It is also a key way for the IT team to work closer with, and feel more aligned with the priorities of the sales, marketing, and product teams alike.

Overall, the necessity of understanding the correlations between application performance, user experience, and business outcomes will be the key ingredient to pioneering a future-proof business strategy.

Digital transformation is a moving target – it’s constantly changing, adapting and becoming ever-more complex given the rise of emerging technologies and growing consumer demands. However, because it’s a continuous evolution and not a one-time initiative, CIOs have the opportunity to reinvent, evolve and disrupt not only their own role, but the business itself.

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