The Digital Imperative Facing Today’s CIOs

Companies across every industry are under mounting pressure to revamp business operations in order to better serve customers in a digital-first world. In response, CIOs are making sweeping organizational changes: adding new strategic roles, standing up innovation labs, and deploying modern technologies to fulfill mandates handed down by their CEOs and boards.

Social, mobile, analytics, and cloud — collectively abbreviated as SMAC — form the primary digital foundation for most IT organizations. Beyond SMAC, forward-looking CIOs are also evaluating and piloting technologies in artificial intelligence (AI), machine learning (ML), the Internet of Things (IoT), and blockchain. Used strategically, these technologies carry real potential to fundamentally reshape business processes.

The challenge, however, is avoiding technology for technology’s sake. Deloitte has described the goal as a new “unbounded IT” operating model — one in which IT departments align tightly with business strategy rather than operating as a back-office function. According to McKinsey & Co. research cited at the time, industries remained less than 40% digitized on average, underscoring how much transformation work remained ahead.

“The leading CIOs are finding the right spots in their organization to make strategic hires to drive transformation. And they’re creating an environment where it’s OK to innovate and use that to see how it shapes the agenda. They’re doing all of that in a space that’s wrapped around the customer experience you want to deliver.”

— Victor Fetter, CIO, LPL Financial

Victor Fetter, CIO of LPL Financial: Customer Experience at the Center

LPL Financial supports 700 banks and credit unions and more than 14,000 financial advisors. CIO Victor Fetter has organized the IT function around improving how LPL serves those clients at every touchpoint.

Customer Experience Center

Fetter established a dedicated customer experience center where team members interact directly with financial advisor clients to understand workflow pain points. Findings are reported to LPL’s business groups, which then adjust customer-facing tools, optimize workflows, and enhance data insights based on real feedback.

Strategic Hires: DevOps Lead and Data Lead

Recognizing that transformation requires the right people in the right roles, Fetter made two targeted hires:

• DevOps point person: Responsible for compressing time-to-market for software delivery by introducing DevOps practices across engineering teams.
• Data lead: Tasked with normalizing, extracting, and surfacing data in formats usable by business units and clients — turning raw data assets into actionable intelligence.

“It’s about finding those key roles that you want to have in your organization to really drive change,” Fetter said.

Innovation Lab and Emerging Technology Experiments

When LPL relocated to a new facility in Fort Mill, S.C., Fetter created an innovation lab where engineers can prototype and test emerging technologies in a low-risk environment. One experiment involved integrating Amazon Alexa and other voice assistants to support balance inquiries, trade lookups, and transaction queries — exercises that forced engineers to think carefully about how to rewire service layers so that voice interfaces could connect to LPL’s back-end systems.

LPL was also prototyping a digital dashboard for customer service representatives. When a call arrives, the dashboard surfaces the caller’s identity, applies sentiment analysis to gauge the caller’s tone, and pulls up relevant transaction history — giving the representative context before the conversation even begins. “I think that has the potential to be a game-changer in freeing up time by using information in different ways to provide better service,” Fetter said.

Cultural initiatives — including hackathons and guest speakers such as Constellation Research’s Ray Wang — rounded out an environment that rewards experimentation rather than punishing failure.

Yousuf Khan, CIO of Pure Storage: Running Lean with Cloud and Automation

Pure Storage CIO Yousuf Khan faced a different constraint: a competitive Silicon Valley talent market that made hiring traditional software engineers difficult and expensive. His response was to build a deliberately lean IT function and compensate through cloud software and automation.

A Small Team, a Large Cloud Stack

At the time of reporting, approximately 30 IT staff supported 1,700 employees — a ratio most enterprise IT leaders would consider extremely lean. Khan achieved this by running the business almost entirely on SaaS platforms, including Salesforce.com, Workday, NetSuite, and Marketo, supplemented by a data warehouse built on Pure’s own flash storage technology.

Automation Over Headcount

Rather than compete for scarce software development talent, Khan worked with venture capitalists to identify early-stage software startups building IT automation tools. One example was exploring chatbot-driven help desk ticketing within Slack — allowing employees to create and resolve tickets conversationally, reducing manual overhead for the IT team.

The resulting bandwidth freed his team to focus on data analytics that directly supported business outcomes. “CIOs are business enablers more than ever before,” Khan said.

Cybersecurity as a Talent and Strategy Problem

Khan identified cybersecurity — particularly social engineering attacks such as phishing — as a rapidly growing risk vector. His challenge was twofold: selecting effective tools from a crowded and often confusing security vendor landscape, and finding qualified staff capable of operating those tools.

His approach to the talent gap was internal upskilling: offering existing IT staff the opportunity to train for more specialized cybersecurity roles, including new industry certifications. “Security is one of those areas where every CIO wants to build up their skill set,” Khan said.

Kevin Murray, CIO of Cincinnati Bell: Replacing Legacy Systems with SaaS

Modernizing IT at a telecommunications carrier carrying decades of legacy ordering, billing, and provisioning systems is one of the most difficult transformation challenges in enterprise IT. Cincinnati Bell CIO Kevin Murray was in the middle of exactly that effort.

SaaS as the Default Path

As part of a broader software modernization strategy, Cincinnati Bell was replacing or augmenting homegrown custom software with commercial SaaS applications from vendors including Salesforce.com, TOA, Callidus, Microsoft, and Xactly. The guiding principle was straightforward: “We’ve essentially said SaaS is our preferred path,” Murray said.

FinancialForce Migration: Speed Compared to On-Premises ERP

A concrete example of the SaaS-first strategy: Cincinnati Bell migrated roughly 1,100 employees in its professional services organization to FinancialForce, an ERP product hosted on Salesforce.com. The migration from custom software to FinancialForce took approximately four months — a timeline Murray contrasted with the 12-to-24-month cycles typically required for on-premises ERP deployments.

Additional benefits included automatic periodic upgrades and improved mobile usability, both difficult to achieve quickly with on-premises systems. “It’s a lot faster to implement,” Murray said.

Common Themes: What Digital Transformation Looks Like in Practice

Across all three CIOs, several consistent patterns emerge for IT leaders navigating digital transformation:

• Hire strategically, not just broadly. Targeted roles — DevOps leads, data leads, security specialists — drive more focused change than general headcount growth.
• Align technology choices with business outcomes. Whether it’s a customer experience center, a voice-enabled virtual assistant, or a chatbot-driven help desk, the technology serves a defined business need.
• Prefer SaaS and cloud for speed and flexibility. On-premises custom systems are giving way to commercial cloud platforms that reduce implementation time and maintenance burden.
• Build a culture of experimentation. Innovation labs, hackathons, and internal prototyping programs give teams permission to test ideas before committing to full-scale deployments.
• Treat security as a strategic priority, not an afterthought. Cybersecurity skill-building must be proactive, particularly as social engineering attacks grow more sophisticated.
• Use automation to extend lean teams. Cloud-native automation tools allow smaller IT organizations to support larger employee bases without proportional headcount growth.

Digital transformation is not a single project with an end date — it is an ongoing realignment of people, processes, and technology around the needs of customers and the business. The CIOs described here illustrate that the most effective approaches combine cultural change with deliberate technology choices and purpose-built organizational structures.

Original reporting by CIO.com / ITworld.com, 2017.