Will GenAI Make the CIO Role Obsolete?

Nearly every technology evolution that has swept across the enterprise with increased excitement and applicability, has brought with it incredible pressure on the CIO to keep pace with the exponential changes. The annals of IT history are riddled with stories of CIOs who have failed to adapt to such significant shifts in technology, many being replaced or superseded by Chief Technology Officers, Chief Data Officers, Chief Digital Officers — and today, Chief AI Officers.

Generative AI also carries with it the risk of making CIOs irrelevant or obsolete — unless they learn to adapt and take the lead on the adoption of this exciting new technology. However, there are actions IT leaders can take to not only protect their position and value to the organization, but also help their organizations navigate this Gen AI era.

How GenAI Threatens CIOs

Let’s start with the bad news. There’s no denying that GenAI has accelerated several trends that could most certainly diminish the CIO role in the days ahead.

GenAI has the capability to radically transform businesses. But in many cases companies have appointed Chief Transformation Officers or Chief AI Officers to lead these efforts. That could leave some CIOs out in the cold.

Then there is the fact that both hyperscalers and SaaS vendors are taking advantage of GenAI to accelerate their climb up the tech stack. They’re building out broader capabilities — such as industry solutions and automated managed environments – that could replace core capabilities traditionally built, integrated, and deployed by CIOs. For example, Nuance in partnership with Microsoft has built a fully integrated healthcare workflow engine that automates the clinical documentation experience.

Meanwhile, the younger generation of business leaders — “digital natives” — feel quite confident working directly with vendor partners to implement their own AI-driven business initiatives, sidestepping the IT function altogether.

Global Systems Integrators (GSIs) likewise have been hard at work retraining their armies to own this GenAI space, integrating and deploying SaaS and PaaS vendor technologies.  Accenture, for example, recently reported more than $3 billion of new Gen AI project bookings for fiscal year 2024.

Even those CIOs who want to build their own GenAI capabilities in-house face steep talent shortages and intense competition from the tech giants and GSIs who may be able to offer pay and opportunity more than an in-house IT shop might. Then there is the fact that the application of GenAI to internal IT functions is reducing the effort, expense (and headcount) required to support the business. This, too, can make the CIO budget and role seemingly shrink in importance.

Where CIOs Still Matter

Of course, there is still some important work that typically needs to be managed by the CIO’s organization.

First, many organizations still maintain a significant legacy applications environment. Keeping those critical systems up and running remains essential and is often the purview of the internal IT organization. The same holds true for any on-premises legacy infrastructure.

The negotiation and management of any vendor contracts, including outsourcing, is another area where the CIO and IT leadership team shines. Traditionally, only the IT function has understood how best to negotiate these types of contracts – especially as they transition from on-premise, perpetual licenses to consumption-based agreements. The same is true for more complex, transformation-oriented GSI outsourcing deals with outcome-based milestones. There are clearly benefits to centralizing this procurement within the IT function to gain efficiencies while aggregating them at an enterprise level.

Then there is cybersecurity and data management across the organization. The IT function is uniquely positioned to identify, detect, defend against, respond to, and recover from cybersecurity threats. Furthermore, managing data enterprise-wide is clearly the purview of the IT function.  However, given the increased application of technology in automating business processes, the governance of both these functions is increasingly shifting to business owners and leaders. This will only increase further with the application of GenAI capabilities.

The only problem is that simply managing these remaining functions isn’t enough. Doing so will likely relegate the CIO to a backroom order-taker for business leaders. They will manage costs, have little room to innovate, and find themselves in the position of saying “no” to requests to stay within budget.

If this description sounds familiar, that’s because it represents a step back several decades to a time when IT leaders and their teams were more marginalized and yearning for that coveted seat at the business table. And who wants to go back to those bad old days?

How to Remain Relevant — and Lead — in the GenAI Era

So, what does a savvy CIO need to do to stay relevant today? The good news is that there are a number of actions IT leaders can take to not only retain, but gain, their power and influence. Based on my experience, I suggest a five-part action plan.

• Own the business value creation process: CIOs need to play a central role in driving business value by leveraging GenAI capabilities. It starts with establishing and leading an AI council with the participation of key business leaders. This council should identify and prioritize GenAI opportunities across the enterprise – especially now, as businesses seek to move from proofs of concept to tangible, enterprise-scale solutions.
  
  
• Lead the discussion on responsible AI and associated risks. Rather than sit back and wait while the business haphazardly adopts AI on its own, CIOs can add value by taking the reins on how to safely and ethically explore these opportunities. Oftentimes, the risk-oriented functions, such as audit and legal, will have a point of view on responsible AI. However, only the CIO can bring together all aspects of risk with an understanding on how the underlying technology actually works, making this another opportunity to lead the effort to build a balanced framework for managing these risks.
  
  
• Address awareness, training, and talent development for GenAI. There’s certainly no lack of enthusiasm in most organizations around GenAI, but CIOs should take care to ensure that the IT function doesn’t become the “department of no” when it comes to these opportunities. Rather, IT leaders can “light the way” on how best to move forward in building awareness, and developing talent well versed in considering business value, technical feasibility, and risk management. Forward-learning CIOs can also leverage GenAI within the IT function as “client zero” to build credibility and practical learnings.
  
  
• Architect the integration of data and various partner solutions. No one has the data and integration knowledge and experience that the IT organization does. There will be a need to orchestrate the workflows across multiple, disparate, agentic AI systems. Here is another area where the CIO and team can shine, by solving the data and system integration issues that will arise as the organization pursues diverse GenAI solutions.
  
  
• Lead the investment prioritization and expense management discussions. The total cost of ownership of AI is a critical, yet often overlooked, aspect of enterprise AI adoption. CIOs have the knowledge and experience to evaluate the various business priorities against realistic benefits and expense projections.

Ultimately, how GenAI impacts the CIO and IT function is up to CIOs themselves. It’s important to recognize the negative impact that GenAI and related trends could potentially have on the IT leader’s stance. But it’s just as critical to recognize the opportunities that they offer for CIOs to step up and not only secure their hard-won positions on the executive teams but increase their value to the organization.