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2021 CIO Study: The CIO Revolution
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The pressure on technology leaders has never been more intense. Technology was already at the center of modern society, but in 2020, the pandemic thrust digital capabilities into the forefront. COVID-19 accelerated the adoption of new tools and practices in ways previously unanticipated but now accepted as the norm. For many individuals, organizations, and communities, technology was more than a solution. It was the lifeline by which they sustained themselves.
Rapid adaptation has continued to accelerate during 2021. A "Virtual Enterprise" model is emerging, fueled by a new post-digital approach to business opportunity. This model is based on the speed and scale of cloud technologies—notably the flexibility and interoperability of hybrid cloud, and the rapid results generated by combining artificial intelligence (AI) and automation. Together, these technologies create synergies and unlock new value streams that are orders of magnitude greater than what each can enable individually.
IBM's Institute for Business Value (IBV) surveyed 5,000 C-suite technology leaders, including both Chief Information Officers (CIOs) and Chief Technology Officers (CTOs). A select group of executives were contacted for in-depth qualitative interviews, revealing insights about their on-the-ground experience leading technology organizations throughout a period of exceptional disruption. Spanning 29 industries and 45 locations worldwide, this study is our most exhaustive examination of this critical cohort in more than 15 years of research.
From digital to virtual, overnight
"If a CIO talks about the business as if it's something external to them, I think there's a big problem. You are the business and the idea that you're not is problem number one."
— Steve McCrystal, Chief Enterprise and Technology Officer, Unilever
CIOS are driving transformation at an astonishing pace.
As organizations pursue radical agility, technology executives and the organizations they lead have taken center stage. "The idea that the business leads technology strategy is now obsolete," observes Laura Money, CIO at Sun Life Financial. "Business strategy is developed in partnership with our technology strategy—as we share a common goal of putting clients first and making it easier to do business with us digitally."
This 2021 IBM CIO Study explores how—even in the midst of uncertainty—CIOs are driving transformation and business value at an astonishing pace. Back in 2011, only 1 in 5 CIOs ranked themselves as a critical enabler of business/organization vision. Now, they're collaborating with colleagues to meet fast-changing demands and driving value throughout their enterprises and beyond.
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Explore key insights from global CIOs
A new role
for CIOs
Learn how technology leaders have emerged as strategy leaders and are creating change.
of both worlds
See how collaboration is essential in building value from an expanding technology portfolio.
your path
Explore the 3 discrete CIO mandates and what drives success for each of them.
01A new role for CIOs
Unprecedented change, unprecedented opportunity
Technology adoption has been accelerating and becoming an inextricable part of every organization and business function. Correspondingly, the technology function has grown dramatically in scope and complexity. The role of technology leaders has expanded not just in breadth, but increasingly in strategic influence.
This prominence brings challenges. Today's technology portfolio is a dynamic mix of centralized, decentralized, and federated services. CIOs at large enterprises now manage hundreds, if not thousands, of applications spanning dozens of functions, often at global scale. And while CIOs continue to deliver the core IT services that power the day-to-day operations of the business, they are also expected to drive innovation that paves the way to a successful future. Many technology leaders not only embrace this increasingly diverse set of responsibilities, they do so under longstanding talent and budget constraints.
The pandemic continues to underscore that the CIO role is more crucial than ever. Whatever the future holds, the ability to adapt to the unknown and transform risks into opportunities will be indispensable.
Leading the charge for changeCIOs as interconnectorsThe CIO-CTO alliance
During a period of widespread anxiety and workplace disruption, technology leaders have been central to addressing their organizations' most pressing needs. Citing examples from tackling supply chain issues to helping ensure business continuity to enabling remote work, 77% of the CIOs in our study report that their teams played a vital role in their organizations' response to the pandemic.
Furthermore, according to IBV research, the pandemic has prompted 55% of organizations to permanently course-correct their strategies. This includes accelerating the pace of digital transformation, adjusting the approach to change management, and shifting to more cloud-based business activities.
Given these changes, organizations that innovate and iterate deftly can gain decisive advantage. Case in point: CIOs report that 20% to 40% of organizational business processes have been automated. This automation helps drive intelligent workflows, which in turn create a "golden thread" of value, enhancing connections both within the enterprise and across its ecosystem.
Destination automation
The extent of automation within the enterprise
The percentage of CIOs reporting advanced capabilities has risen dramatically since 2019:
Hybrid cloud operations
Digital process automation and intelligent workflows
Cloud-native development
Cloud-native deployment
Data insights and AI
Leading the charge for change
CIOs as interconnectors
CIOs today manage a complex portfolio, spanning a diverse set of responsibilities and constituents. These include offering technology services to a wide spectrum of users, making data insights readily available, transforming work environments through productivity platforms, and extending workflows across business functions.
John Gibbs of International Airlines describes the CIO role as "diagonal," explaining, "It's working across the organization but also working at different levels of the organization. One moment I can be interfacing with a line-level operator and the next moment I'm speaking with the CEO."
Sitting at this intersection presents challenges. The priority to "serve the moment," as former CIO of the London Metropolitan Police Angus McCallum describes his task, can become a monumental challenge. Amid multiple priorities from multiple constituencies, CIOs need to stay ahead of the curve, or else their role devolves into ongoing crisis management and firefighting. "CIOs are a connector across business functions," says CIO Robert Hobbelman of the Virginia Department of Behavioral Health and Developmental Services in the US. "The CIO role has evolved. We are not always providing the solution, but we are connecting the dots and creating value."
of CIOs report engaging with their CEOs, more than they do with any other C-suite leader.
"The CIO is like a bridge, a connector across the business and technology ... Their value comes from knowing both the organization's business objectives and the technology landscape."— Abhijit Shah, Nippon India Mutual Fund
The CIO-CTO alliance
With the increasing prominence of the CTO role, CIOs have crucial allies within the technology function. And while organizations may have unique combinations of technology needs, at a high level, the technology function has a common set of responsibilities that are typically distributed between CIOs and CTOs.
Steve McCrystal of Unilever emphasizes this big picture. "We get so good at creating these islands because we're trying to create accountability in the right way. But we lose sight of what the CTO and the CIO are actually there to do, which is to use technology to drive business value. That's something they have to work on together."
One might generally characterize CIOs as operating across the organization, often in a "diagonal" sense of interfacing at different levels of the organization. Their success depends on their proficiency in doing so. On the other hand, there is a general consensus that CTOs focus on a more defined set of responsibilities—anchored by technology strategy, operations, and architecture. Yet it is this focus that enables CTOs to address the most strategic opportunities and the most pressing challenges influencing their organizations' use of technology.
It would be a mistake, however, to assume any given organization is structured precisely this way. In fact, our analysis finds that allocation of responsibilities varies greatly based on industry, organizational structure, and reporting relationships. And while the responsibilities of CTOs tend to be more consistent across organizations than those of CIOs, both roles show meaningful variability.
How responsibilities are allocated across the technology function
02The best of both worlds
Perspective: Sustainable opportunities
How the C-suite is addressing some of the biggest challenges of our time.
Sustainability is a rapidly growing C-suite priority, with new ecosystem-based business models helping to resolve some of the biggest challenges of our time. In fact, in recent IBV research, 9 in 10 companies say they'll be working on various sustainability initiatives across the enterprise by the end of 2021. 7 in 10 executives expect their sustainability development goals to improve operational effectiveness, agility, and drive business results. And many CIOs expect technology to significantly impact sustainability initiatives.
What's more, sustainability issues are increasingly important to consumers. When compared to 2 years ago, 22% more consumers say environmental responsibility is very or extremely important when deciding on a brand. A full 84% of consumers now indicate environmental sustainability is at least moderately important.
For technology leaders, the switch to sustainability raises new questions about sourcing and supply chain integrity. Steve McCrystal at Unilever describes the change this way: "We want to lead the world in enabling people to make more sustainable choices. I need to understand the footprint of different products so I can optimize for a better outcome right from the start, and then use the knowledge we gain to make a better product in the future."
Collaboration at the crossroads
Technology adoption in and of itself doesn't deliver optimal value. But when deployed strategically, effectively, and often in tandem, technologies such as hybrid cloud, AI, and automation can enable modern enterprises to transform massive change into substantial benefits. How to best lead the technology function and drive success? The executives we spoke with consistently returned to a specific theme—collaboration.
Curiously, despite this stated emphasis on teamwork, our research reveals that CIOs and CTOs are often working independently, and sometimes at cross-purposes. Only 45% of CTOs indicate frequent interaction with their CIO counterparts. And it works both ways: just 41% of CIOs highlight frequent interaction with CTO peers.
So, why aren't CIOs and CTOs sitting together at lunch? Bart Murphy, Chief Technology and Information Officer for global nonprofit OCLC, offers some insight. "The CTO role was born out of the idea that the CIOs can't innovate," he says. "I'm not in favor of separating the 'build' function from the 'run' function. These things inform each other."
Arun Aggarwal, SVP, Business Technology for Finland-based energy company Fortum, recognizes the need to align both intent and incentives, explaining: "In collaborating with other tech leaders, there needs to be absolute clarity of purpose. That means a clarity of mission and no duplication across functions. You have to be aligned on financial and operational incentives."
Driving business valueSynergy for successValue driver 1: TechnologyValue driver 2: PeopleValue driver 3: Process
We assessed the organizations in our study on 3 measures of their technology function:
Technology maturity—the stage of their cloud, AI, automation, and security journeys
Technology effectiveness—their agility, data management, governance, and resilience
Technology ROI—the return on their technology investments, normalized by industry
Our analysis indicates that organizations reporting higher technology maturity, effectiveness, and ROI achieved better business performance. In particular, we discovered financial gains accelerated during the pandemic—organizations with higher technology measures built a substantial advantage over their peers.
High performers pull away
The gap between organizations with high and low tech measures has increased over the past 2 years
Driving business value
Synergy for success
Success is based on an organization's ability to drive business value and capabilities throughout the enterprise in a strategic, structured, efficient manner. As business and technology operations converge, technology leaders need to think differently to align their business, operations, and technology strategies.
Our analysis suggests such value stems from the ability to bring assets, resources, insights, and opportunities together—dynamically and in response to real-time variables. The efficiency and effectiveness of these capabilities can make a huge difference in business outcomes. These capabilities are less centralized and more distributed. Realizing the associated benefits depends less on optimizing resources, and more on enhancing connections and accelerating insights.
Given the growing complexity and interdependence of technology strategy and operations, these responsibilities are increasingly shared. For CIOs, that may mean leveraging technology as a core business capability, and serving the day-to-day technology needs of diverse constituents and stakeholders. For CTOs, this may mean taking a leadership role in developing a more comprehensive, holistic approach to technology strategy, architecture, and operations.
Core convergence
In combination, the below 6 value drivers can create new value propositions that dramatically extend the reach and impact of technology. In this report we explore 3 value drivers in which CIOs are leading strategic efforts: technology, people, and process.
Value driver 1: Technology
CIOs are leading the transition to hybrid cloud technologies. Consider this: cloud, when implemented in conjunction with organizational and operational enablers and enhanced exponential technologies and data capabilities, has the potential to unlock significant revenue growth upwards of 13x.
Nearly three-quarters of workloads now reside in cloud, suggesting the relative efficiencies afforded by cloud. But this also hints that, as cloud-based technologies—especially those related to hybrid cloud—mature, cloud may consume additional workloads. The data, integration, and orchestration layer inherent in hybrid cloud designs are key to delivering value across functional areas.
A number of executives indicated their ability to provision cloud capacity, applications, and services on demand has become integral to how they do business. "The transition to digital has been swift and accelerated as a result of the pandemic," says Avinash Raghavendra of Axis Bank. "We need to constantly reinvent ourselves to stay relevant. What's most important is to learn as fast as possible."
Many CIOs are re-orienting IT operations around the ability to capture, analyze, and enrich proprietary data insights. 74% of CIOs reported they are proficient in integrating data from sources inside and outside the organization, while 87% of CIOs indicated they occupy a leadership role in their organization's data strategy. This sea change in thinking is recognizing that data value is not one-dimensional, but rather about serving a specific need to a specific user at a specific moment in time.
Building on cloud
Tech leaders expect cloud and other cloud-enabled technologies to impact their business results
Value driver 2: People
CIOs interface with virtually every part of the organization. And as a result, they are uniquely positioned to understand new value propositions and also existing operational constraints. This is the real benefit of working across the organization. Given CIOs' proximity to cloud partners, they are well-situated to advocate for new cloud services and understand how to better leverage relationships across the IT estate.
As hybrid workplaces evolve, CIOs expect to play an important role in establishing a productive, supportive, and enriching work environment. CIOs have become major proponents of progressive end-user experiences—a trend that has culminated over the past 18 months with an array of cloud-based productivity tools and the transition to more flexible work environments. In addition to the remote work environment, what's also evolving is how people approach their work: collaboration, community, co-creation, and co-innovation. CIOs understand that diversity and inclusivity have a critical role to play in how we design and deliver technology services.
Executives told us that part of what makes the CIO role so interesting is the combination of people and technology, of soft skills and hard skills. Indeed, talent is key to the success of transformation initiatives. CIOs are contending with an abundance of demand that is vying for a finite supply of resources. According to Avinash Raghavendra at Axis Bank, "Organizations are not competing with their industry peers but across industries for talent."
And the same is true across the IT organization—putting a premium on hard-to-find skills in areas such as AI, advanced analytics, and cybersecurity. In response, CIOs are finding new ways of expanding talent pools—for example, through shared services across the ecosystem or relying on partners for specialized talent. But making the most of talent is an ongoing challenge.
The engaged workplace
Important organizational attributes for engaging employees
Value driver 3: Process
CIOs have front-row seats to digital transformation, serving both people-centric requirements for emerging skills and adaptive solutions, as well as technology-centric requirements for scale and speed. In light of this, CIOs can play an instrumental role in enabling extended workflows based on emerging "threads of value."
Indeed, the most impactful opportunities for value realization come from connecting different layers. Complicating this, however, is a reality that many CIOs contend with: a combination of legacy infrastructure for critical applications and a diversification of workloads for new applications. Though legacy solutions may require disproportionate amounts of support, many CIOs are leery of trading paid-in-full solutions for recurring line items that may never go away. As Angus McCallum, formerly of London Metropolitan Police, describes it, "I'm reluctant to trade technical debt for supplier debt."
Amid these challenges, automation holds great promise for reducing the overhead associated with routine business processes. Among CIOs and CTOs in our study, 77% say their organizations are effective in terms of automating business processes. CIOs report that the greatest use of automation is in IT, finance, and manufacturing—at 40%, 35%, and 35% of workloads, respectively. And overall, 37% of CIOs cite process automation as the top opportunity for positive impact within their organizations.
Challenges of a changing world
Organizational complexity and regulatory constraints lead the concerns
03Finding your path
The 3 CIO Mandates
As the technology portfolio expands and diversifies, so too do the responsibilities of technology leaders. How the CIO or CTO role is defined often reflects factors that have little to do with the individual leader and more to do with organizational structure and the needs of the organization.
To determine how and where CIOs may make the greatest contribution—and have the greatest impact—it's essential to understand how the CIO role has been defined within their organizations.
Yet the CIO role varies dramatically among industries and among organizations—including the responsibilities, scale, and maturity of the technology function, the level of C-suite authority, and the strategic credibility. From our conversations with leaders, it's clear that there is no single right way to tackle the challenges and opportunities facing CIOs. Nippon India's Abhijit Shah sums it up, "There's not a discrete definition of what the CIO does."
The Cross-functional FacilitatorThe Critical OperatorThe Visionary Builder
These CIOs represent about half of our global survey sample. They operate as innovators across functions, with the most diverse set of responsibilities and broadest range of success factors.
While their responsibilities are broadly defined, Cross-functional Facilitators rate their organizations' technology maturity as significantly higher when compared to those of the other CIO mandates. Perhaps because of their broad scope, they have achieved the highest level of collaboration with CTOs in their organizations. With an extensive range of constituencies, these CIOs may realize they can benefit from the vision and expertise of a peer focused on many of the same objectives.
The broad scope of responsibilities for these CIOs means they may struggle for resources, contend with conflicting priorities and difficult trade-offs, and may not always be fully recognized for the breadth and reach of their accomplishment. Yet many CIOs tell us that this expanse of responsibility and the inherent challenges of serving many constituencies are significant aspects of why the role is appealing to them.
Top 5 responsibilities
Data governance and compliance: 73%
Supply chain management: 73%
End-user experience: 72%
Data privacy: 71%
Business continuity: 68%
Top 3 time investments
Innovation strategy: 42%
Cybersecurity: 36%
Operational uptime: 46%
Launch of tech-enabled platforms: 43%
Attributed revenue from products and services: 42%
Budget performance: 40%
Impact on business outcomes: 40%
The Cross-functional Facilitator
The Critical Operator
These CIOs represent just over a quarter of our global survey sample. They have a clear and consistent core set of responsibilities. Among the 3 mandates, Critical Operators rate their organizations' technology maturity the lowest and report the lowest return on their technology investments. But according to a technology effectiveness index we developed for this research, this particular mandate group leaves its peers in the dust. They report an average index score of 81%, compared to Visionary Builders (41%) and Cross-functional Facilitators (36%).
For Critical Operators, a deeper commitment to fewer responsibilities can mean coalescing around a common sense of mission. Indeed, in keeping with their priorities, this group has the highest consistency of self-identification: 41% describe themselves as "transformational business leaders." In the other mandates, no more than a third of respondents agree on any single description of their roles.
Curiously, the success metrics cited by Critical Operators are much more dispersed than their top responsibilities and appear somewhat disconnected from the CIOs' activity. That may be because new priorities are being pushed onto these CIOs, or because these CIOs are proactively embracing what, from their perspective, are key tasks.
Workplace enablement: 99%
Workforce engagement/productivity: 99%
Ecosystem strategy: 58%
Sustainability agenda: 42%
Product-quality measures: 50%
The Visionary Builder
This group of CIOs, representing just under a quarter of our survey respondents, has a focused set of responsibilities very different from the other 2 mandates. The top responsibility, cited by 96% of them, is advising the C-suite and the Board. In effect, Visionary Builders combine traditional CIO duties with CTO-type duties. They have relatively low levels of collaboration (perhaps because they can function as both CIO and CTO) and operate more independently from business counterparts. However, they reported significantly better returns on their technology investments than the other groups.
These CIOs have a great deal of vested authority over technology strategy and operations, and exercise comprehensive authority over the technology function. They have a broad sphere of influence over technology strategy and decision making at the senior leadership level.
C-suite and Board advisory: 96%
Technology strategy: 85%
Technology operations: 76%
Technology architecture: 75%
Subjective assessment of their impact: 75%
"Today the CIO is part of the group that defines and determines the transformation of companies."
— Fernando Treviño Elizondo, CIO, Banorte
Planning for the road ahead
"The CIO role is no longer just delivering technology for IT projects but delivering business and customer outcomes through joint collaboration."
— Rong Xian, General Manager, Technology & Information Department, China Tourism Group
Today, the technology function is even more vital to ongoing business success and business relevance. We find ourselves in an escalating cycle: as technology becomes distributed throughout the enterprise, the organization's identity centers more on technology. The Virtual Enterprise of tomorrow needs a mature and collaborative technology function to thrive.
Whatever form the future takes, CIOs and CTOs will play a vital role in how technology shapes it. Braver and bolder, but also more vulnerable and uncertain, more artificially intelligent yet also more humanistic, this world will unavoidably reflect not only our aspirations, needs, and talents but also our biases, oversights, and neglect.
The stakes are intense, but so are the opportunities for collaboration, increased effectiveness, and technology investments that advance technology maturity. The steps we take now determine the future.
To embrace this new reality with energy and openness, all CIOs should start with these guiding principles:
Seize your seat at the table
Address complexity head on
Become a force-multiplier
Read the full report for more insights from global CIOs—and explore the specific actions you should take in your role.
Kathryn Guarini
Varun Bijlani
GM and Managing Partner, Hybrid Cloud Transformation
Gerald Parham
Global Research Leader, Security & CIO
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