The head of IT used to be an isolated person, speaking a language no one spoke, only interacting with people within the organization—never customers—and spending a lot of time cajoling leaders into buying hardware and software they didn’t understand or believe they needed.
But the role of the Chief Information Officer (CIO), as it’s now called, has transformed. Today the CIO is recognized as driving revenue, building agility into business models, and optimizing the customer experience. A presence in every department and in front of customers, the CIO weaves together software and applications that do everything from increase productivity to reduce costs to enhance customer interactions. And the job continues to evolve, which was the subject of a panel discussion led by Zendesk’s Tom Keiser last November at Zendesk Relate 2018.
Keiser, Zendesk’s first CIO, is now its Chief Operating Officer—a move that would not have happened 10 years ago, back before cloud technology became so integral to overall operations.
Formerly CIO of retailers Gap Inc. (Gap, Banana Republic, Old Navy, Athleta) and L. Brands, (Victoria Secret, and Bath and Body Works), Keiser said change is the constant for today’s CIO. “The role is different every year,” he said. “The role is certainly different from one company to another.”
The panel included Box CIO Paul Chapman, Slack’s Head of Information Technology Stephen Franchetti, Palo Alto Networks SVP and CIO Naveen Zutshi, and Zuora’s CIO Alvina Antar, each offering perspective on the ever-evolving role at their respective companies.
IT as a cost center or driver of the customer experience?
The Zendesk CIO, Keiser noted, has three major roles. The company employs just over 2,600 employees and is adding approximately 100 people a month. A large part of the IT organization’s responsibility is managing onboarding tools and enabling employee productivity. The company has also grown by 30-to-40 percent per quarter, so the CIO must ensure that the business applications and processes can support that growth. He also explained that the Zendesk CIO has to spend a lot of time talking to CIOs of companies that use Zendesk and that are undergoing digital transformation.
“So we're seeing, at Zendesk, the role of the CIO starting to step into the decision-making associated with customer and customer experience, and that wasn't true just a few years ago,” Keiser said. “There was space between what CIOs did—back office technology enabling technologies, but not really having the touch and the feel of the customer—to now really having to understand the customer, provide solutions for the customer, and be the leading face of the customer.”
Even so, CIOs still struggle to prove the business case for its contribution to the organization. Keiser called it “squishy.” It can be a challenge to quantify return on investment, a challenge that each CIO was in the process of tackling.
Making the business case for IT
“I think ‘squishy’ is a good way to describe it,” said Franchetti of Slack, an operating system connecting teams with real-time messaging, tools, and services that facilitate optimal workflows and searchable company archives. “We actually don't initiate bodies of work or projects that don't have a direct impact and line of sight to a business objective or a functional objective. We’re pretty religious about that now.”
He explained that an increasingly important part of the role is about figuring out how to extract the maximum value from data and get it to those in decision-making roles. “There’s a really big focus on big data, data engineering, and data science that falls into that,” he said.
Box’s Paul Chapman said his role includes scaling business processes, leveraging a best-of-breed ecosystem, and cybersecurity. Box, a cloud content management company that serves 92,000 customers in 70% of the Fortune 500 including the Department of Justice, Pfizer, and Coke-a-Cola.
An increasingly important part of the [CIO's] role is about figuring out how to extract the maximum value from data and get it to those in decision-making roles.
“One of the things I think is important on the measurement side that I've seen differently from more traditional organizations is that we emphasize workplace productivity and how we engage with our customers, partners, and suppliers in much more digital and frictionless ways that we have in the past,” he said. “It's all about making our employees as productive as possible and creating those digital experiences for our customers.”
Palo Alto Networks is a cybersecurity company that’s growing at 30 percent year-over-year. Zutshi revealed that his role has three “colors.” This includes heading IT, helping with mergers and acquisition integration in the highly fragmented industry of cybersecurity, and talking to customers about cybersecurity and threat landscapes in their industries—which he estimates accounts for about 20 percent of his time.
When it comes to measurement, you have to look at “the soft aspect” in addition to the hard numbers—this includes “the perception from the CEO, leadership, and the rest of the team.” Zutshi said. At Palo Alto Networks, key metrics include Net Promoter Score (NPS), speed and agility of delivery, product backlog, quality and sustainability of systems, and risk reduction.
To determine ROI, Zutshi said, the team measures productivity in the number of hours saved; operating cost savings in terms of cost reduction; and how much revenue is directly influenced as a result of product applications they’re developing.
At Zuora, there’s also an aspect of customer education or coaching that’s become part of the job. Alvina Antar said her role has evolved to include supporting and working with enterprise companies that are trying to pivot and transform perpetual business models to subscription recurring revenue business models.
“I'm enabling [my customers’] success,” she said. “I'm enabling priorities of the business and not reacting to the business needs, but almost understanding their business before the requirements come to me.”
[Read also: Forrester TEI Report Examines the ROI of Zendesk]
Traveling at the speed of SaaS
For all the companies, Keiser noted, the role of CIO is vastly different from what it used to be. “If I think back to how much time it used to take in previous CIO roles to actually even get the permission to move forward, as opposed to now, with SaaS, with this mindset shift, you can go try things quickly and really be done with the proof of concept before you've had to ask for permission and go and deploy.”
Slack’s Franchetti said one of the big differences was, as Antar pointed out, really partnering with a company to serve business strategy. “It translates into the people we hire as well,” he said. “First and foremost, we're looking for people with high business acumen that have a passion for technology.”
But a lot of that is managing the myriad services in an organization. Franchetti referred to this as “containerism” and “microservices.”
“Every portion of your business operation, every part of the value chain, you can actually go out and purchase a service for that,” Franchetti said. “Whether it's a sub-component of HR or finance or sales and marketing, you name it, you can purchase that service. This emergence of this API economy where IT rules then becomes, ‘How do we actually bring all of those services together in this kind of multi-cloud environment that we live in? And always play this role of a general contractor, a master architect, to make sure that we're stitching together a machine that makes sense to run our business and set of business processes... not only does it change IT's role, but it actually allows us to provide a different experience to the user.”
Franchetti said Slack conducted research with University of Irvine about how knowledge workers interact with systems and computing. It turns out that when workers switch context from one task to another, it takes about 27 minutes to really refocus on the original task.
When workers switch context from one task to another, it takes about 27 minutes to really refocus on the original task.
“Now you think about that, and you think about how many times during the day you're doing context switching, that's dead time,” he said. Making the connections that make it easier to switch tasks is key to IT’s role.
IT also has to drive the company’s strategic future, Chapman noted. “It's not just about picking up an on-premise service and moving it to a cloud-based service. It's really thinking through what that future state architecture looks like and how do you start bringing all these services together that are built in a modern way, that are built to inter-operate, that are built on a platform economy, that are built with the Internet of APIs in mind?”
The architecture that CIOs work with today, with its speed and agility, Chapman said, give CIOs time back to focus on tasks of higher value. “You’re not spending so much time on those things that are keeping the lights on, generally, and managing tech debt…. It’s less about managing and hugging hardware and much more about adding value.”
Technology at the center of every business function
The app economy and the data economy are fundamentally changing enterprises, the role of IT, and the role of business, in general, Zutshi said. Now every function thinks of technology as part of its business strategy. “In fact,” he said, “IT is the only function that is pervasive in the entire company. You don’t have accounting heads in IT…. At the same time, you will see SaaS software being bought by business heads in all these functions, and it's actually a reflection of the importance technology is now playing in the role of each function.”
Traditional enterprises used to have a competitive differentiator in their ability to make huge capital investments in hardware and software, Zutshi said. But many of these investments have become a kind of boat anchor, slowing growth and innovation.
Now the challenge is to stitch together all the various stacks and systems. For example, Zutshi explained that seventy percent of Palo Alto Networks’ revenue is software and services based, and they manage more than 125 SaaS applications. But they also have a data center and sell appliances for firewalls in data centers. Trying to be effective and transition most of the company’s on-premise software into cloud-based software is “not without bumps.”
“The other bump I see,” he said, “is the data layer and the messaging layer between SaaS companies often is missing.” He explained that many SaaS companies “want to land lock you in their own SaaS platform and provide a system of intelligence in their SaaS platform.” But CIOs are working to create a system of intelligence across SaaS platforms to ensure a “more curated and holistic experience to your customers and to our employees.”
Antar added that businesses look to their technology partners to drive their transformation, but they shouldn’t make siloed decisions. “[Business leaders] can't make decisions that just impact sales or marketing…. because the way that you book an order, your upstream systems and the way that you process upstream processes have a direct impact on your backend systems and on how you actually recognize revenue.”
Just maintaining, or getting someone to maintain, existing systems isn’t going to cut it anymore, Antar said. “You need technology leaders that are willing to take risks, willing to make the wrong decision and back off that decision. Willing to explain and give the business the confidence that this transformation is possible. Give them a roadmap on what the phased implementation looks like, [to show ] that it's not going to completely derail the business, but that you've got a real plan, a phased plan that gets you to an end state solution that will transform the business.”
Iterating on the customer experience
IT’s customers used to be internal. Now IT is needed to create a great experience for the external customer. That’s a new role and one the CIOs are growing into.
“We're actually going through a customer journey mapping of SaaS right now,” Slack’s Franchetti said. “And the interesting thing is, it's being IT-led, mainly because we provide all of the technologies that touch the customer and enable our customer groups like sales and marketing and go-to-market teams, customer success, customer experience, and customer support.”
“We have this unique point of view from being at the epicenter of the business, we get to see all aspects of the business good, bad or indifferent,” he said. This gives his team insight into the areas of the business where there is opportunity—both from a process experience and technology standpoint, placing the CIO role “really upfront and central to that customer experience.”
Chapman said it’s all about the ease of doing business. Modern platforms allow businesses to capture of massive amounts of data connected with customer touch points, so it’s about generating and using this intelligence to make informed decisions.
Modern platforms allow businesses to capture of massive amounts of data connected with customer touch points, so it's about generating and using this intelligence to make informed decisions.
“There's no sort of big lever you pull and no silver bullet…. These are very purposeful incremental changes [we make] to take friction out of the experience. The nice thing about that is that you're incrementally getting better and better and better with your customer interactions, leveraging data and modern architecture to get you there.”
Zutshi added that Palo Alto Networks’ customers wanted to understand their current security footprint and what that security footprint would look like with their firewall during the presale cycle. So the company developed a solution on top of their application framework that customers can download as a self-service tool to generate a security scorecard, providing insight into gaps and how Palo Alto Networks can help.
“So that's just one example of how, since you have a lot telemetry from products, you have a lot of customer data...You can build really interesting solutions, or you can partner with SaaS companies to build really interesting solutions, to actually help your customers be more successful.”
Antar said a key for IT as it relates to customer service is to build in-depth understanding of customer utilization, with triggers to allow for customer success to use logic and intelligence to understand at what thresholds they should reach out to a customer. This way, success teams can track a customer's experience in terms of what they've purchased, what they've actually utilized, and not wait until the point of renewal to have a conversation about utilization. That creates a frustrated customer, she said. It also provides an opportunity to upsell or cross-sell new lines of business when it’s more timely for the customer.
Looking ahead, the CIOs were thinking about how to mine and use data, leverage machine learning and to build and drive automation. But as Keiser said, by next year, it’s possible, were they to reconvene, that they’d each have a completely new story to tell.