Index Insider: The Changing Role of the CIO

Hello. This is Alex Bakker and Michael Dornan with this week’s ISG Index Insider.
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Throughout the last year, ISG has been studying how different roles in organizations participate in the process of setting technology strategies, evaluating solutions and making final purchasing decisions. The most interesting results come from the trend we see in the role of the CIO. (See Data Watch)
Across four different technology domains, we see the same trend in varying degrees: the CIO is responsible for executing strategies that they have little influence on and is making buying decisions for solutions and services that are evaluated by others in the business. In fact, in a recent study about consumer services digital transformation, the CIO sets the strategy only 21% of the time.
In this research, ISG has studied topics where technology is having the biggest impact on business transformation, addressing new markets and interfacing with customers. In these areas, IT has been an enabler or partner more often than a leader. This reflects a critical change in the market: while the CIO and IT department may still control the operations of the technology, business buyers are setting the technology strategy. The consensus is that technology transformation is too important to leave to IT.
This leaves IT in a reactive mode, monitoring growth in technology spending happening elsewhere in the organization without the influence it once had. Smart manufacturing programs, for example, grew their headcount by an average of five times between 2022 and 2023 – and they report almost exclusively outside of IT. The CIO’s role is to provide a framework in which the smart manufacturing program’s IT environment can grow.
As power shifts away from the CIO, service providers have an opportunity to engage more broadly with the business – both to focus on growth areas of the market and to ensure they are delivering important business outcomes. Service providers must also become adept at balancing the needs of business transformation with the needs of IT operations and be able to support both IT and the business with a point of view backed up by their capabilities.


Chart showing the extent to which CIOs are involved in setting strategy, evaluating services and solutions and final decision-making in four different organizational domains.


About the authors

Alex Bakker

Alex Bakker

Alex leads the Primary Research Team where he focuses on study design, panel research, and interview based research for ISG. In addition to leading the Primary Research practice at ISG, Alex also serves as the lead analyst on provider pursuit effectiveness, and helps IT service providers understand how they can improve performance in the competitive process. 
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Michael Dornan

Michael Dornan

Michael Dornan is a Principal Analyst in Provider Services based in the UK. He is responsible for ISG’s Buyer Behavior research program, helping providers navigate changing market dynamics, identify unmet enterprise demand, and position services and solutions that align to client needs.