As emerging-market companies increasingly compete for international market share, they are relying more and more on their information technology (IT) functions for a competitive edge. This is elevating chief information officers (CIOs) into leading positions, which in turn is accelerating the introduction of sophisticated IT systems into a broad range of corporate functions.
This study is based on a survey of 366 senior executives in Central and Eastern Europe (CEE), the Middle East and Africa, as well as eight in-depth interviews with emerging-market CIOs and other experts. The research explores the ways in which the CIO’s role is evolving. The study looks not only at the rise of CIOs in their respective company hierarchies and their broadening remit—including their efforts to introduce sophisticated IT systems—but also at the factors that inhibit such developments, and at the ways in which the three regions differ from one another in this regard.
Here are the key findings of the research:
- During the past three years, CIOs in emerging markets have raised their profiles and broadened their remits within their companies. A majority of emerging-market CIOs are by now members of their companies’ boards and are specifically tasked with helping to formulate and meet strategic objectives.
- A growing number of CIOs have general management and financial backgrounds in addition to IT and technical skills, and are increasingly called upon to explain the uses of advanced IT to colleagues in other departments.
- As part of introducing complex IT systems company-wide, many emerging-market CIOs are becoming “chief process officers”—responsible for streamlining business processes, standardising procedures and improving efficiency. “The CIO is the single person with a clear picture of all the processes,” says one CIO interviewed for this report.
- The changing role of CIOs is helping companies to harness IT to broader company goals. Three years ago, only 36% of emerging-market executives thought IT was well aligned with their company strategy, compared with 62% today. But the added responsibility comes at a price: CIOs tend to find that their day-to-day IT skills decline.
- These changes have occurred most rapidly among smaller companies (those with an annual global revenue of below $100m), where CIOs can
more easily gain a company-wide purview, and in sectors that rely heavily on sophisticated IT, such as telecommunications, banking and other financial services, and professional services, such as outsourced IT and human resources (HR) services.
- Of the three regions under study, Africa seems the most advanced in terms of expanding the role of the CIO, followed by the Middle East. In general, CEE lags behind in terms of modernising internal processes and broadening the remit of the CIO.
- CIOs in emerging markets often have to wrestle with tougher issues than those faced by counterparts in Western countries. They generally have to operate in less stable environments, and experience frustration in having to educate fellow executives on basic IT issues, especially security. However, they are less encumbered by legacy systems and tight budget controls.
- CIOs’ budgetary control over major IT investments typically lags behind their broader responsibilities. In general, emerging-market CIOs struggle against regular financial setbacks, which cause companies to focus on immediate survival, the limitations of the CIOs themselves in terms of background, difficulties in recruiting sufficient IT talent, and a strong legacy of viewing IT as mainly an enabler of other corporate functions, rather than a profit contributor in its own right.
- Although CIOs’ control over IT expenditure is relatively weak, corporate budgets for IT expenditure are growing strongly. Of the various IT investments that companies make to gain an edge in volatile markets, respondents cite business intelligence as the most important, followed by customer relationship management systems.
