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Is the CIO the Chief Commercial Officer of the future?

June 6, 2017

Technology lies at the heart of every modern business. Yet increasingly organisations don’t own their technology – they buy in services from a range of providers. The job of the CIO has shifted to that of a business enabler and innovator, knowing less about the technology, but much more about its business impact and needing to understand the requirements of the market.

With this steady shift comes a substantial change in success factors and dependencies. One priority is selecting suppliers that do not create major reputational risks (British Airways is a good recent example of that problem), regulatory exposures or uncontrolled costs, including switching costs. Another is ensuring reliability, ease of use, adaptability and supporting innovation.

These are hard factors to balance – and they depend on sound commercial judgments and effective selection, negotiation, contracting and relationship management. But in addition to these issues affecting the overall technology platform, it is important to recognise that core business capabilities increasingly depend on the underlying technology platform. Digitization, for example, is understood to be a key market differentiator, enabling linkage and dynamic information flows across entire supply networks, facilitating relationships, executing smart contracts, overseeing compliance and performance.

So has contract and commercial management at last found a natural home – an executive whose success and future depends on the quality of these functions? It certainly seems possible. Indeed, we are seeing a growing number of CIOs who appreciate that poor contracting undermines not only their personal position, but is a broader constraint on business agility. Hence they are starting to promote or lead ‘hackathons’ to reengineer contracting practices and processes.

And even if that shift of role does not happen, it is surely time that commercial teams build strong connections to the CIO, helping him or her to understand the extent of their reliance on strong contract and commercial support. Perhaps with that understanding will come a new level of prioritization for investment in contract management technology.

 

 

 

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