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Digital transformation is a buzzword that’s fun to say but hard to grasp. As more and more organizations embark on these technological journeys, are they really being led by the proper steward? Rich Penkoski, the CEO of Markets for Deloitte Consulting, believes that in order for companies to have a smooth transition, you have to think of it as a process that involves two key members of the C-Suite. On this episode of IT Visionaries Rich discusses why the CIO and CFO need to play an important role in any digital journey, and how the relationship between those roles continues to evolve. Plus, he digs into the acceleration of the digital agenda brought on by the COVID-19 pandemic.
- A Growing Bond: The relationship between the CIO and CFO continues to grow in importance, especially when it comes to finding creative solutions to manage ROI while finding agile solutions
- Roads? Where We’re Going We Don’t Need Roads: The pace at which companies are being forced to implement digital transformations has been expedited. Because the process has been sped up, there is a tremendous burden being put on access to capital.
- Apple Easy, Google Fast: IT professionals must now perform their work under the assumption that software must be easy and fast. Because of this new mindset, IT professionals must have a broader understanding of the profession, while being able to freely move across technologies.
For a more in-depth look at this episode, check out the article below.
Digital transformation is a buzzword that’s fun to say but hard to grasp. As more and more organizations embark on these technological journeys, are they really being led by the proper steward? CEO of Markets for Deloitte Consulting, Rich Penkoski, believes that in order for companies to have a smooth transition, you have to think of it as a process that involves two key members of the C-Suite. Penkoski joined IT Visionaries and discussed the acceleration of the digital agenda and the growing relationship between the CIO and the CFO.
As the CEO of Markets for Deloitte Consulting, Pekoski is responsible for providing his clients with very specific industry insights. One of the key focuses for Penkoski lately is analyzing common business issues across industries. One of those key issues centers around the intersection of tech and finance.
“If you look at the CFO and CIO relationship, it has been examined and explored and analyzed for as long as I’ve been in this arena,” Penkoski said. “The dynamics are incredibly important and there are times when the collaboration of those two executives is absolutely crucial for success. And there are also times where there is a natural tension between a CFO’s stewardship responsibilities for the enterprise and a CIO’s desire to drive innovation and accelerate strategy through technology naturally come at odds.”
Penkoski pinpointed two examples where this relationship currently resides at a crossroads. According to Penkoski, one of the pain points revolves around how organizations are currently struggling with their digital transformations, including some unique ways they are dealing with it.
“The traditional way the CFOs have tried to assess and manage ROI for [digital transformations] investments actually fly in the face of what the best and most innovative CIOs are doing around driving agile methodology into their organization for the purpose of system design and deployment,” Penkoski said.
Penkoski mentioned that one of the ways the CFO and CIO relationship continues to grow is through working on creative ways to measure ROI while at the same time finding ways to deploy new, agile methods throughout the organization.
Another way those two roles work together is with access to capital.
“The pace of digital transformation is having to accelerate,” Penkoski said. “[The pace] is putting a tremendous burden on access to capital, and how best to deploy limited and sometimes shrinking capital to very necessary investments.”
The COVID-19 pandemic forced more rapid technological advancements at many organizations, especially when it came to scaling remote workforces, providing security for those remote employees, and ensuring the employee experience remained the same or at least comparable. One of the challenges many of those companies faced was locating the funds for these expedited projects.
“A lot of CFOs and CEOs are talking about how to identify new sources of capital,” Penkoski said. “Some of the more interesting things we’re seeing is where CFOs are becoming more comfortable when CIO’s are introducing things like an ecosystem, where perhaps there can be a co-investment between hyper-scale or an in-the-cloud environment, and a systems integrator and maybe even academic institution to co-fund innovation.”
Having led many companies through digital transformations during his 25-year career, Penkoski shifted the conversation toward lending advice to CIOs who might be looking at elevating their employee experience.
“When everybody had to make a very abrupt shift to deal with a broader segment of their workforce, that drove a lot of IT-oriented investment, and it was in areas that you would expect,” he said. “What I find really interesting is that right now we are seeing many of our clients evaluating what they’re doing with their workforce and determining how they could take some of the lessons they’re learning and apply it to their interaction with their customer.”
While digital transformations continue to alter the technological landscape of corporate America, the role of the IT professional has evolved over the years as well. A theme that Penkoski noted is the acceleration of the digital agenda, something he said is both exciting and scary for organizations. But he also mentioned that the ubiquity of consumer technology has fundamentally altered the role of an IT professional.
“Their employee base, their customer base, everybody is used to Apple easy, Google fast,” he said when noting the ease of Apple’s interface and the speed at which Google’s software operates. “[IT professionals] are having to think about the way they perform work and the solutions they provide through that mindset. Watching the evolution of an IT professional — where today’s best IT staff tend to be broader and are able to move across technologies more seamlessly — puts a heavy responsibility on a CIO to think about the operating model that he or she needs to adopt in order to ensure that they are providing their team with the opportunity to grow and to be fungible across the enterprise.”
To hear more about the growing relationship between the CIO and the CFO, and how digital transformations are happening at an accelerated rate, check out the full episode of IT Visionaries.
To hear the entire discussion, tune into IT Visionaries here.