Tech Officers Take the Lead: Driving Business Transformation in the AI Era

According to a recent article by McKinsey titled "A New Dawn for the Technology Officer," companies are increasingly looking to their chief information officers (CIOs), chief technology officers (CTOs), and chief digital and information officers (CDIOs) to turn technological potential into real value. As organizations aim to harness AI, generative AI, and other rapidly evolving technologies, these tech leaders are making fundamental shifts in how they operate.

This new era places technology officers at the forefront, with high expectations to deliver tangible results. To meet these demands, they are adjusting their strategies to ensure their organizations benefit from global business trends reshaped by technology. The moment serves as an opportunity for tech leaders to clarify where and how to focus their energies and build up their capabilities.

In-depth conversations with board members, CEOs, investors, and tech leaders, along with comprehensive research analysis, have revealed several shifts tech leaders can make to meet business demands. These shifts can be categorized into four roles:

Orchestrator: Tech officers are moving from merely supporting business leaders to actively shaping company strategies and generating value. They are directing both business and tech teams and taking real profit-and-loss accountability for business outcomes. This involves leading digital and AI initiatives across IT and business units with a focus on delivering value.

Builder: To generate revenue through tech-driven initiatives, tech officers are shifting from enabling business partners to building new products and businesses that create value. They are developing capabilities in areas like generative AI to shape new markets, create customer-facing products, and scale digital go-to-market strategies that leverage a company's unique strengths.

Protector: With the increasing scale and complexity of technology, cyber threats and resilience have become greater challenges. Tech officers are transitioning from securing software and reacting to regulatory requirements to proactively combating a wide array of risks to business continuity. They are taking ownership of revenue protection, encompassing everything from cybersecurity to business resiliency.

Operator: Tech leaders are expanding their mandate beyond IT to absorb and integrate technology into core business functions. They are moving into areas like customer experience, innovation, operations, procurement, and strategy. This expansion aims to eliminate silos and accelerate the transformation of various functions within the organization.

The extent to which tech leaders take on these expanded roles depends on factors like available talent, their experience, industry dynamics, tech maturity, and value potential. Regardless, developing a strategy for the future direction of tech leadership is crucial for scaling the impact of AI and technology to create real value.

As orchestrators, tech leaders recognize that delivering significant gains from AI and technology requires integrating multiple facets of the organization, such as adoption, business strategy, data management, operating models, scaling, and talent development. They are shifting from delivering technology to shaping business strategies, partnering with business leaders to understand the potential of technology and prioritize opportunities.

Tech officers are also evolving from managing only tech teams to overseeing both tech and business teams, moving from monitoring costs and schedules to jointly delivering profit-and-loss outcomes. Their incentives are increasingly linked to the value technology generates for the business.

David Pedreira, the CTO of Banco Santander Argentina, notes, "We’re moving into being IT strategists and setting the direction for the organization, such as how to use generative AI or how to evolve a product. We define how product teams should work and where they should focus, speaking directly on the ‘go to market’ of products, not as an order taker, but as an equal."

To capture the full potential of technology, orchestrators focus on scaling integrated business-tech operating models, upskilling talent, freeing data for enterprise use, and investing in scalable architecture with a midterm mindset. They emphasize the importance of product management as a key driver of business performance and the need for ongoing talent development to adapt to innovations like generative AI.

As builders, tech leaders are shifting from building software to building businesses. They are leveraging their understanding of technology to create products and services that meet market needs, turning data and technology into services, developing new channels, and building platforms based on expertise. This requires a significant mindset shift and a focus on strategy, product leadership, and go-to-market capabilities.

In their role as protectors, tech officers are moving from a compliance-driven approach to cybersecurity to proactively protecting the entire enterprise. They are addressing the increasing vulnerabilities that come with more complex and interconnected technology systems, ensuring digital trust, and safeguarding enterprise resiliency.

Finally, as operators, tech leaders are integrating technology into core business functions to drive the next wave of value. They are taking on additional leadership roles in areas like strategy and innovation, procurement, customer experience, and operations. By doing so, they help overcome silos, streamline investments, and accelerate the rewiring of functions to capture the full benefits of AI and technology.

The evolving role of the technology officer is a vital opportunity for organizations to link technological advancements with business value. By embracing these expanded roles, tech leaders can lead the way in transforming their companies and realizing the full potential of AI and other emerging technologies.

Source: McKinsey & Company, "A New Dawn for the Technology Officer"