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How CIOs are redefining business models

27 Feb 17

Leaders across the C-Suite are looking to IT to enable business transformation. This shift has occurred after many years where IT was simply viewed as a cost-centre, and the role of the CIO was mostly confined to the IT silo.

Driving this change is the rise of the five horsemen of IT innovation: cloud, big data, IOT, social media and mobility. These successive waves of change have convinced business leaders that if they don’t embrace IT as a core strategy for growth and innovation, the organisation will be left behind by disruptive competitors.

Despite the rise of the five horsemen, an enterprise must also contend with the fact that it has sunk costs in its existing landscape, particularly in the ERP, database and CRM software.

CIOs then, must learn to drive more value from these core ‘systems of record’ assets, all the while keeping an eye on new technology and ways to integrate that technology into the organisation’s processes and business models. 

There are two significant ways CIOs can drive more value from the core application base. The first is to look at maintenance, service and support contracts for their ERP and database software. Central to looking at this spend is the idea that the business doesn’t have to stay with the vendor for their service and support. 

Third party support from organisations such as Rimini Street has shown that organizations can immediately cut their annual support fees by 50%, avoid unnecessary upgrades, and save up to 90% of their overall maintenance costs.

By significantly reducing this cost, an enterprise can redirect the liberated funds towards more productive and innovative uses. Which is where the second major method of driving value out of existing infrastructure comes into play.

By reducing their service and support costs to free up funds for innovation and strategic initiatives within the business, companies can look towards a ‘hybrid IT’ model. With a hybrid IT model, the existing infrastructure is supplemented and augmented by newer cloud and SaaS offerings from rising vendors that are fleet of foot and offer innovative ways of approaching existing and future business challenges.

This means the role of the CIO has to change and adapt to the circumstances of a new technological age. It’s no longer good enough to simply be a strong technologist focussed on reducing cost. The new-age CIO is both an innovator and a disruptor – he/she is a change agent seeking opportunities to introduce new technologies and methodologies as a way of driving business growth.

Savvy boards and CEOs have come to realise this change in the CIO’s role. The CIO must adapt to this change and to the new age of cloud and mobility, or risk themselves, and their business organisations being left behind.

Article by Andrew Powell, Managing Director, Asia Pacific and Middle East, Rimini Street

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