Like everything else in retail, the role of the Chief Information Officer has transformed over the years. What was once a focus on managing information technology and systems has evolved into an active cross-functional management and leadership role that touches all aspects of the retail organization. As technology continues to advance and the overall consumer experience becomes even more reliant on digital platforms, it has become imperative that the CIO role transitions to meet the demands of today’s unified commerce.
The CIO Role
The role of today’s CIO hasn’t changed from pre-pandemic periods. However, the CIO has become responsive to the increasing demands and reliance on technology. What used to be back of house systems support has become front-end operations from supply chain to consumer. The other major recent pivot in the position was the shift to leading the supply chain with automation. The last two years taught the industry that they need to have a more granular, real-time view of the entire supply chain. Knowing where things are and how to directly communicate with suppliers can allow for retailers to react more efficiently.
In the recent past, CIOs would be creating long-term solutions and planning investments in the business, but today they are also more short-term oriented, seeking to enhance existing systems and not totally replacing them.
Modern CIOs need to touch on nearly every aspect of the business. In addition to having a high-level role in managing cross-functional disciplines like supply chain, the CIO also needs to be involved in driving cost reduction and productivity improvement. Technology plays a critical role in optimizing both top and bottom-line improvements. Another area that the CIO should be playing in is in understanding and applying how technology is important to today’s consumer. Shoppers are totally digitized now and rely on systems to enhance the user experience, from ease of returns to inventory location at the store and fulfillment levels. Lastly, today’s CIO needs to be more educated on the competition. What used to be a build from within and scale mentality, has become a competitive landscape mindset, against which the CIO needs to benchmark her or his own businesses.
CIOs traditionally have been measured for their own and their team’s performances. But the modern CIO should be held accountable to four main performance metrics: profit, cost, margin contribution and driving more advantageous SLAs (service level agreements).
Enterprise Resource Planning
ERP is the integrated management of a business’ main processes, often in real time and mediated by software and technology. In its simplest form, ERPs pillar on efficiency, cost reduction, quality and decentralization. CIO’s have always had their finger on the pulse in these areas, but today it is more of a requirement that they prioritize and focus on things like sourcing and procurement, asset management, supply chain and sales performance over analytics, reporting, and service/project management. In the recent past, CIOs would be creating long-term solutions and planning investments in the business, but today they need to also be more short-term oriented, seeking to enhance existing systems and not totally replacing them. As with any other expense, it is becoming harder and harder to justify high ticket items with significant, scalable return on those investments. In addition to driving and not just supporting the business, CIOs today are much more central to helping the stores’ ability to directly fulfill transactions at the customer level. Leveraging technology to provide visibility to immediate inventory availability has become much more critical.
Security and the Metaverse
Although many things keep a CIO up at night, there are really three key things, and at the top of the list is security issues. Not just at the server level but at the network access level that allows entry to the consumer information, point of sale system, online transactions and even mobile and social data. With data comes data breach risk, so managing risk is imperative today. The other two concerns are the Metaverse, not really knowing what it will bring from a security standpoint as well as from a systems integration and consumer experience standpoint. And I’d be remiss not to mention the current economic pressures. How inflation and approaching recession impacts the business, prices, promotions and overall profit.
Note: Columbus Consulting is a Robin Report Collaborative Partner.