As a CIO of a manufacturing company and a practicing analyst for the acceleration economy, I am in a unique position to see first-hand the challenges facing CIOs. Although in many ways the challenges don’t change much from year to year, in some years we see the rise of new technologies, such as generative artificial intelligence (AI) – which becomes a priority. Here are the top five challenges I see for myself and my CIO peers this year.
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- AI adoption and integration: Rapid advancements in AI technologies present both opportunities and challenges. CIOs must make decisions about investment levels, choosing the right ones AI frameworksand integrate AI into existing business processes. Additionally, upskilling the workforce to be proficient with AI tools and understanding the ethical implications of AI are significant challenges. I’m as excited as anyone about the new GenAI technologies that have come to market over the past year. I spend a lot of my time studying and experimenting with these tools to try to understand how to best use them to benefit my business. But it can be really overwhelming due to the large number of companies and products involved. I decided the best approach for my business was to start small with friendly, affordable offerings to test the waters and gradually move up to larger projects. Each CIO will have to propose the best strategy for their company, based on staff and skill level.
- Cloud migration and management: The transition to cloud computing remains a strategic priority. Moving existing systems moving to the cloud can be complex and expensive. CIOs must balance the benefits of cloud computing with these challenges, including managing higher-than-expected costs of cloud resources and ensuring data security in a cloud environment. When my company moved from on-premises enterprise resource planning (ERP) to the cloud, I was surprised by the increase in costs. There were so many services that no one ever mentioned during the sales process, including cloud storage, additional virtual machines, data transfer fees, and cloud data cybersecurity. Application licensing, implementation and consulting costs are just the beginning. Additionally, cloud infrastructure requires skills and personnel that can be very different from managing on-premises systems. It’s important to fully understand all of these changes before launching a major cloud migration initiative.
- Cultural transformation and remote work: Post-pandemic, the culture of IT work is undergoing significant changes. CIOs face the challenge of creating a flexible work environment that caters to both remote and on-site staff, especially in sectors like manufacturing. Balancing the expectations of a distributed workforce while maintaining productivity and collaboration is a major concern. In my company, we opted for a hybrid schedule where we are in the office three days and we work from home two days a week. This provides a good balance, but even that can be a tough sell when acquiring new talent. If a qualified candidate lives in another city, any office requirements may mean a move, with all the overhead that entails. So if another company offers them a remote position, it might be difficult to compete. Even people who live in the same city may prefer to work from home. Finally, we must face the possibility that our current employees will be offered positions that allow fully remote work and, if the salary increase is sufficient, they will be ready to leave. This is a difficult situation for employers, and we must address it to find a balance that we can afford, while still keeping our organizations adequately staffed.
- Align IT with business expectations: As businesses become more tech-savvy, they demand more complex and innovative IT projects. CIOs are challenged to meet these business demands within realistic time frames and budgets. This includes managing expectations about technology capabilities, resource allocation, and project prioritization. There was a time when information technology was considered a rather obscure subject by most business leaders, so they were content to leave it in the hands of the IT department. But they now understand the potential of this technology to gain a competitive advantage and engage with customers in ways never before possible. This is a good thing because the value of IT leaders and their teams is more evident, but the understanding of the budget needed to operate these new initiatives has not yet caught up with the desire to implement them. CIOs must find a way to demonstrate their value while helping business leaders see and understand these resource needs.
- Cyber security: CIOs face the complexity of protecting against sophisticated ransomware, phishing attacks and other forms of cybercrime. Staying ahead of these threats requires continued investment in advanced security technologies, employee training and the development of robust incident response plans. Recently, I heard about two incidents that hit close to home. One was a health care company victim of a ransomware attack. This affected thousands of hospitals and healthcare providers. I couldn’t make an appointment or access any of my medical records online for about a month. Another business in my area was hit by Ransomware who encrypted all their files. They paid a $1 million ransom, but still haven’t gotten any of their files back. The threat landscape is constantly evolving, so we never get to “good enough” security. I’m sure these companies thought they were doing everything they could to keep their data secure.
All of these challenges are interconnected and require a strategic approach from CIOs. They must not only be expert in technology, but also possess strong leadership and communication skills to successfully manage these complex issues. I will rely on guidance and advice from my peer groups, as well as valuable resources like Acceleration Economy, to help me set and manage my priorities for 2024.
