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My visits with business executives and media mavens over the past few weeks involved heated discussions about the future role of the Chief Information Officer in this age of Software as a Service (SaaS). Public perception is that SaaS is in direct competition with the CIO, chipping away at the death grip this top IT exec has long-held over enterprise technology infrastructure and buying decisions.
But, as is often the case, the reality is much different than the going perception.
In fact, my discussions reaffirm that savvy CIOs view SaaS as an opportunity to reassert their importance and improve their role as a strategic advisors. With the growing adoption and relevance of SaaS business applications, the role of the CIO becomes less about managing infrastructure purchases and uptime, and more about identifying and assembling best-practice processes to support and improve enterprise performance.
I floated this observation during a chat with CIO Magazine Editor-in-Chief Maryfran Johnson recently and she concurred. In fact, she noted seeing an increasing number of CIOs with new titles: CPO, that is, Chief Process Officers.
As further evidence of this shift, a CIO at a major hospital network I was speaking with last week said he too sees a “natural role expansion into process as well as sourcing leadership for top-tier CIOs.” However, he notes that transitioning to the role as Chief Process Officer will require a mindshift for the CIO as well as his or her IT team.
“For that role expansion to happen, [the CIO] must have a seat at the table. To get a seat, he must earn it by showing that he is not a geek but a businessman. So he must free himself of all the toys and gadgets and look at the big picture: the TOTAL COST of Ownership.”
In addition to doing some soul-searching on their own role, CIOs looking to become more strategic process directors must overcome pushback from their own teams, many of whom feel that SaaS somehow reduces their role in the organization. Maryfran and the CIO both argue that SaaS doesn’t kill IT. Instead, it enhances the role of the IT organization, finally making them tighter partners with the businesses in defining and assembling the best processes for competitive advantage.
While we are surely in the pioneering stage of this trend, the growing adoption and large-scale deployments of SaaS applications - not to mention the hype around Cloud Computing - could accelerate the CIO’s transition to a more strategic process director role. Yet, the hospital CIO projects that the transition will happen quickly out of sheer necessity: “Sad to say that if expectations and standards don’t change in the CIO community - if the CIO continues to be the ‘head geek in charge’ - then the CIO role will rightfully be banished to a subordinate role.”
The only question that remains is will your CIO make the transition?
5 responses so far ↓
1 Sean Rollings // Jan 23, 2009 at 3:52 pm
I think you hit the nail on the head with this one Tim. What CIO wouldn’t rather focus on process, information access, visibility, etc rather than servers, networks, licenses, etc.? With SaaS, I think you’ll see more business minded folks interested in being CIOs and making Information Technology more strategic than the support role and “necessary evil” that so many wrongly think of it as in their companies.
2 SaaS Shouldn’t be a Threat to CIOs « The New Chain // Jan 23, 2009 at 6:56 pm
[...] SaaS is a threat to IT organizations in general and CIOs in particular. In his piece called “Can SaaS Make CIOs Strategic Again“, on Supply Excellence, Tim Minahan, of Ariba, really nicely summarized why SaaS should be a [...]
3 Nick Parnaby - Founder & COO, RollStream Inc. // Jan 23, 2009 at 9:15 pm
Tim, spot on article. I’ve talked to about 7 CIOs this month and SaaS is squarely on their radar screen. One of them told me last week that he looked at the feasibility of using SaaS for all his apps - Workday + Netsuite + Success Factors etc and just a neat little data warehouse MDM app in the middle to keep things aligned. Of course it was a pipe dream still, but he was excited to discuss SaaS and the other CIOs I spoke to have learned a hell of a lot about SaaS in the last 2 years and have a tight control over the business teams who have begun to defer to the CIO once again on the security, reliability, scalability and propensity for integration. In the end there is still a huge need for SaaS integration with the mother ship and this is why SaaS always comes back to the CIO in our experience. We actually experience our shortest sales cycles when we start at the CIO. “Go figure” as they say here in the US of Obama !
Cheers…….Nick.
4 Andy Groh // Feb 2, 2009 at 8:48 am
I very much agree with your point. However, I think not is much as made about how SaaS is allowing tech-savvy, line-of-business process experts more enabled and perhaps assume a role of Chief Process and Information Officer. To bridge the IT/business gap, either the CIO has to learn the ‘business’ or the CPO needs to learn the ‘technology’….again, with so much in the way of SaaS/outsourced services, I think the latter is not that far fetched.
5 Supply Chain Management Doctor // Oct 1, 2009 at 8:56 am
SaaS is beginning to gain serious credibility and CIO’s who are faced with reducing budgets and increasing workloads see it as a means to conquer their World. Software vendors are now emerging with rich, credible applications that will only work as a service and play a key part in any Supply Chain Management, Supply Chain Integration, Electronic Data Interchange or B2B eCommerce projects. Colaboration 2.0 has arrived!
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