Will the CIO role survive?

It takes a sad heart to write this, but I am getting the distinct feeling that the CIO role as we currently know it is at risk for some organisations. The trend is to place business executives with some IT knowledge in charge of the IT team and call it some merged business title.

To the left of me and to the right of me I am seeing businesses removing the role of CIO. 5 major Australian roles gone in the last couple of months and it made me contemplate.... why?

Technology today has become the focal point to the future success of every business/public service. That is an important statement which no one can deny. It is more important than ever, so why are the roles being removed?

Most CEO's are extremely savvy individuals and can see this social/digital change happening. They also have had their 'A' team in place for many years who are their 'go to' team to execute strategy.

My question to you is: 'Are you on that A team' or are you just the IT girl/guy?"

The CEO now needs their A team to be in control of the IT team, otherwise they can't get what they want executed in the time frame they want. Unfortunately now, every strategic initiative requires IT components.

You need to be on the 'A team'!

The second question is:
"Is this just a transitionary phase?"

My answer is YES. Putting business teams in charge of IT and lowering the highest level of IT knowledge down to a non strategic role can only be temporary. How can you properly define strategy over areas you have no knowledge. I expect this will be a temporary strategic mistake, but one easy to make.

So if you are a super technical CIO who lives for looking after servers, I would be concerned about your future reporting line and title. For those of you CIO's who have already started migrating into the business, that trend will continue!

Have a great week!


Ross.

Will traditional banks fail?

Are traditional banks going to fade away?

Being the first eldest son in 4 generations to defy the family tradition of banking for the last 120 years, I am beginning to feel that was a wise decision.

• When the company providing you your milk and bread is providing banking services and insurance.
• When the Telco's are providing mobile bank accounts through things like M-Pesa deposits and skipping the entire banking industry.
• When the local Australian banks are hampered by having to comply to all the ADI and APRA regulations.
• When the inflow of global payments technology threatens the bank's acquiring business through Paypal now, Bitcoin, Square, Google, Amazon, PromisePay, Apple and other global payment platforms that are entering the market.

Large non banking corporations are using the communities of loyalty customers to provide services and generate additional revenue to the detriment of our traditional banks. This is occurring initially in payments and insurance but loans is just starting to emerge.

This will continue! Those large corporates will continue to target slow moving highly profitable institutions and will continue to poach that business from banks. The first step is to poach the banking CIO's to get the fundamental platforms in place. Mmmmmh, has anyone been watching the CIO and high level IT exec movements in the last 12 months?

Although the traditional bank still earns the majority of its income through a margin on home loans, the fringe products do provide significant ebit. These traditional fringe products of insurance, transactional banking and financial services are being eaten away by smart large corporations leveraging their customer base to create digital revenue.

Now, you might be thinking that the bank's reported profit figures are actually ok. But the underlying problems are being hidden by the substantial (10% per year for the last two years - sourced from the ABS) growth in housing prices leading to a jump in lending and inflated revenue in their core business, but not an increase in customers. I challenge you to look behind the numbers.

Their response is to try to buy customers using traditional means such as low interest balance transfers, but they have missed the bigger problem. Lack of innovation within their customer base and sticking to their core products. They are failing to innovate.

The bank that is able to transform and engage with their customer and provide a wider range of services (currently the bank know more about you than you realise) will grow in the next 10 years. The others will stagnate or be consolidated.

It will be interesting to see how they rise to the challenge.