Historically, the relationship between technology and business leader has tended to be transactional: a business leader has an objective they want to meet, and they’ll ask their technology leaders to figure out how to achieve their goals. Need to embed a tool on your website to collect emails for lead generation? Check. Seeing reports of a new technology? Time to ask the technology experts.
But this dynamic shortchanges the relationship on both sides. It creates silos between business and technology leaders and can become a barrier to success, particularly in the current, disruptive macroeconomic environment. Every member of the C-suite is expected to know about their business model, products, customers and markets — so why should their technology be any different?
A recent Accenture analysis of more than 1,600 companies across 18 industries set out to understand what percentage of companies were strategically using technology to shape their business strategy. It identified 21% being tech-forward. That’s to say, only 21% of companies actually use the possibilities presented by technology to develop better and bolder business strategies in a meaningful way. And those organizations treat technology as a source of inspiration to advance the development of competitive business strategies, as well as use technology to continuously spot, predict and inform continuous strategy adjustments in real-time. Looking at the characteristics shared by tech-forward companies, a key differentiator is a strengthened relationship between business and technology leaders, with a particular focus on tech-fluency across the C-suite.
Given the C-suite’s growing emphasis on tech-savviness, coupled with technology leaders increasingly putting the ownership of tools into the hands of the business, the CIO’s role is expanding. Today’s current inflection point, characterized both by a constantly shifting business landscape and the need for technology to play a hand in shaping business strategy, creates a unique opportunity for CIOs to uplevel their roles even further and carve out a new space for what they represent.
Why tech-fluency is critical to business strategy
Leaders are facing an increasing volume of hard choices, making it more difficult for them to separate relevance from noise. This makes it more essential to have a business-savvy and tech-fluent C-suite making data-backed decisions.
Tech-forward companies report a C-suite committed to using technology as inspiration to address business challenges twice as frequently as other companies. Of these companies, three quarters have both a CEO and C-suite that are both a tech-fluent (17% more than other organizations). And the boards of tech-forward companies are 1.7 times more strongly tech-minded, as well. Conversely, 67% of senior technology leaders report a lack of tech-fluency among their peers as a major barrier to integrating technology into strategy.
Leaders in tech-forward companies also use tech to grow and innovate. They understand how to tap into ongoing tech efforts to inform strategy development. Take, for instance, the rise of technologies such as generative AI, which has the potential to impact at least 40% of working hours. In order for the C-suite to determine what effects the technology can have on their businesses, they need to speak the same language.
We’ve heard from our clients that CIOs now spend more time with their CEOs than they did even 18 months ago. And a global leader in commercial and specialty vehicles revealed the benefit of combining these efforts when it created a digital services factory that, together with its product-based business model, helped differentiate and push forward design, development, and delivery of services to customers.
This changing relationship offers an opportunity and a call to action for CIOs to be bolder and move beyond simply the execution of technology to helping educate their peers on the business potential of that technology. Whereas previously tech has been a bit of a black box, CIOs must now consider how to be value-drivers while being only 10% better at tech than everyone else. That can include anything from becoming more integrated to the business to focusing attention on how new technologies can inform strategy, and everything in between.
Similarly, with CEOs and the rest of the C-suite becoming more knowledgeable in technology, they can better engage in the potential benefits and risks of using certain tech. To take one contemporary example, by collaborating with the CEO, tech leaders can establish clear guidelines for employees on how and when to use public generative AI tools. And they can put in place responsible AI programs and processes to address ethical concerns with the latest tech. This type of approach elevates CIOs beyond the focus on IT to become more strategic, which 52% have said they’d want.
Gen AI era ushers in distinct perception shifts
Now is the ideal moment for gen AI to change the perception of executives’ roles. In the IT sphere, a transformation in service delivery has already begun in that within just a few months, companies have moved from AI curiosity to putting it at the heart of their operations.
Our research shows that 73% of total working hours in technology roles can be transformed by generative AI. And in the US alone, it has the potential to create nearly $2 trillion in economic value. It’s a major opportunity for CIOs to position themselves as key agents of change in organizations, and use their IT organizations as use cases to illustrate the art of what’s possible.
As the wider C-suite gets closer to tech, it’s also up to the CIO to get closer to the business. Every CIO brings deep technological acumen, but the CIOs who stand out are those who can talk business as comfortably as IT. By taking a tech value approach, they can give business, technology, and finance teams a shared understanding of how to set, measure and deliver true value from technology. And by directly linking technology costs to the benefits they give the business, and effectively demonstrating that to the entire C-suite, CIOs can boost an organization’s transparency and strategic decision-making.
With disruption comes opportunity
Embodying a tech-forward mentality pays off, and companies that do are nearly two and a half times more likely to outperform their peers on revenue growth. And in a world where leaders are asked to make decisions about the future of their businesses in days, not months, it’s critical they break down silos across the C-suite to strengthen the relationship between the tech and business leaders that can help them move into a new era. After all, companies that embed tech in their strategy development are more likely to succeed in their reinvention, pursue more ambitious opportunities, and arrive quicker and better equipped at the next performance frontier.
For CEOs and other C-suite leaders, the onus is on them to play a heavier hand in understanding tech, sharpen their technological prowess, and apply the value lens of technology to business strategy.
For CIOs, it’s about shedding past perceptions as just the executor of business ideas, and embracing the opportunity before them to create a larger, more innovative culture where the CIO and technology are key drivers of value and agility across the enterprise.
