CIO Challenges in 2023: Drive Value from IT, Combat Economic Headwinds

The role of chief information officer (CIO) has evolved greatly over the past two years. While CIOs still need to focus on the technology infrastructure of their company, they've also taken on a larger role of aligning their efforts to the larger business initiatives.

CIOs are now more focused on digitization because digital innovation is directly tied to scaling operations, driving margin expansion, and maintaining high performing teams.

An October 2022 report from IT research firm Gartner, which surveyed more than 2,000 CIOs, revealed the need to accelerate time to value from digital investments — CIOs are expected to move fast, partner with the business, and bring innovation.

To achieve these feats, CIOs need to have the right ecosystem in place, leaning on the right partners and teams to better drive tech innovation, which is critical for growth this year.

Another CIO challenge is to understand what is important to business leaders internally, in terms of goals and priorities, and that can help shape how CIOs work with teams to move the innovation needle in the right direction.

Related:Innovation, Costs, Risks: Trifecta of CIO Challenges in 2023

"Communication and collaboration is where I'd say CIOs have doubled down — both internally and externally," said Angelic Gibson, CIO of AvidXchange. "That means connecting with customers to understand how your organization can help drive better efficiencies for their business, in turn creating better business value when many others are also looking to cut back on spending."

CIO Challenges Include Working Closely with C-Suite

In order to lead their organizations' digital transformation, it's necessary for CIOs to work with other C-suite executives to meet business goals and build out other key relationships across the C-suite — chief technology officers (CTOs) and chief revenue officers (CROs) in particular.

"While CTOs are typically focused on client-facing technologies, there should be an open line of communication for CIOs and CTOs to also discuss internal technologies," Gibson said.

Related: For CIOs to Stay Relevant, They Must Think Big

Faisal Alam, tech consulting solutions and markets leader at EY Americas, noted that the shift in focus from cost optimization and keeping the lights on to being a strategic C-suite adviser who delivers ROI in tandem with the business means most leading CIOs are increasingly focused on digital initiatives and innovation.

"As an example, one of our healthcare client CIOs has recently taken over digital responsibilities for their enterprise," he explained. "As another example, one of our CIOs in the utilities industry is also responsible for the innovation function in the company."

Prior to these recent trends, many companies were creating the chief digital officer (CDO) role to focus on digital transformation and innovation.

"Now, in many cases, we see a reconvergence happening between the CIO and CDO roles," Alam said. "Nonetheless, whichever way an enterprise chooses to organize, the highest performing CIOs are now squarely focused on digital initiatives and innovation — and the post-pandemic environment has only amplified this imperative."

Additionally, CROs will play a critical role in managing corporate risk as new technologies emerge internally, which could pose threats if not properly observed. 

Sustainability Also a CIO Challenge

As companies begin to apply an actual value to sustainability efforts and look to reduce their carbon emissions, the CIO will have more of a direct impact on the total company, Kelly Fleming, CIO of Cirrus Nexus, said.

"For instance, CIO decisions on data center buildouts now impact not just IT operations but a company's reputation in light of its sustainability position," he said. "The CIO will need to have stronger ties to the CFO and the CEO alike to determine the real costs associated with IT decisions."

Fleming added that economic headwinds are creating more CIO challenges, as they will need to make tough choices regarding what projects to invest in while simultaneously cutting costs.

Companies are making strategic decisions to focus 2023 growth by investing in innovations such as AI, machine learning, the internet of things (IoT), and automation technologies while cutting funding and staff in other departments.

"These emerging technologies hold the potential to provide the most promising areas of growth and return on investment," Fleming said.

Gibson agreed the current economic landscape is having a "massive" effect on organizations.

"For some, things like budget cuts or layoffs may be necessary," she said. "When looking at budget cuts specifically, CIOs must separate nice-to-haves from innovative tech that fuels digital transformation of their teams."

She explained that CIOs can't put themselves in a position where they are cutting tech that would hinder digitization, since it directly impacts the performance of the company.

"CIOs must be strategic about where they are investing their resources and how they are going to use their manpower and tech to fulfill more responsibilities as economic challenges persist," Gibson said.

In relation to ongoing headwinds related to monetary tightening and companies preparing for some level of a recessionary environment, CIOs are faced with the challenge of whether to hunker down, invest through the downturn, or do something in between, according to Alam.

"Most savvy CIOs are using this as an opportunity to find well-qualified talent at reasonable prices so that they can effectively partner with their business counterparts to capture market share when the business climate starts ramping up again," he explained.