CIO Priorities 2023: What CIOs need to Worry About in Early 2023

Recession flags are waving heading into 2023. And technology continues to wriggle and shift regardless of economic slowdown or hope for stability.

The following list outlines the key CIO Priorities for 2023. Any organization looking beyond six months without using scenarios to guide their visioning risks facing poor forecasts amid multi-vector volatility. Once you read the list, you’ll see these concerns will drive action far in the future and prove plenty to keep even the most adept CIO busy for the next six months.

CIO Priorities 2023: Keep nurturing talent

A few months ago, labor shortages and skills mismatches dominated many headlines. And now the headlines lean toward labor reductions. Don’t be fooled. Good IT talent is still hard to come by. Businesses that need capability should snag talent when they find it but should be careful in overbuilding capacity. Keep consulting relationships in play to grow and contract based on realities on the ground.

Consider how you design your IT talent experience effectively onboarding people, help them quickly find their place and their path to value, and work in a way that makes sense to them and to the organization’s need for structure and reporting.

Many organizations broke their social contracts with IT when they outsourced entire functions. The cost savings, if not actually direct, seemed to go to senior leadership salaries and bonuses as often as in other places. Trust eroded. Taking care of oneself in a hybrid organization is a normal reaction. The best organizations will try to rebuild trust, but CIOs can only represent the truth of their company’s actions; they probably can’t change them.

Recognize disruption and become data-driven

Recessions typically prime disruption. This recession is likely to do the same. One area to look for is the shift away from the “cognitive” aspects of AI toward the data used to train it. Over the last couple of years, I have been working with Singularity DE in Lisbon, Portugal, on how organizations prepare themselves to be more data-driven. See our book on becoming data-driven on Amazon.

While AI can add value to data, it isn’t the only path toward wringing value from data. Data monetization points in one direction, but more importantly, seeing, and therefore, being able to manage a business at a much more granular level also comes from an improved understanding of data.

Most organizations remain awash in data with little understanding of what it means and, accordingly, how to apply data to gain insights about employees, operations, engineering, logistics or any other function. They may experience some great point insights if, for instance, they concentrate on customer data, but other data often receives less focus and therefore returns less value.

Organizations should consider two efforts in early 2023. The first is to increase the data competency of their teams. Everybody. DBS Bank in Singapore recently trained over 16,000 employees on big data and analytics. 

DBS sought to enhance their employees’ ability to:

1. Use data to address business challenges in a highly-structured fashion,
2. Use data analytics to better identify business opportunities, and
3. Facilitate closer collaboration with the bank’s data scientists and technology teams to create more intuitive products and services for customers.

This suggests that organizations should think about data across multiple dimensions. Don’t just look, for instance, at cost savings or operational efficiencies; also look to employee engagement and environmental impact. Inexpensive solutions that get the job done at the cost of employee engagement or a negative effect on the environment are also accounting problems; they just use different metrics as proxies for future financial impacts.

The second effort extends that knowledge through empowerment. Let departments and functions explore their available data and see what they can glean from it. The results will not be great early on, and they will certainly point to holes in data strategy and management, but those are revelations that, if worked through, can prepare an organization to exit the recession as a disruptor, not just a survivor.

Prepare to defend your budget

Finance is coming for parts of your budget. If you can’t defend it, you will lose it. Now is the right time to shore up reporting on successes and value.

CIOs should employ both arrows in their budget defense quiver. First, get the accounting right. Focus initial data-driven efforts on understanding where IT spends money and its returns. Develop indisputable accounting practices that leave finance answering questions about why they are bothering you rather than you rushing off to answer their probing queries.

Second, tell better stories. IT notoriously thinks that technology’s impact is obvious and that data about that impact will save them from scrutiny. As too many recent political examples prove, data often fails to convince. Stories on the other hand that connect the people impacted to the value of the tools and processes provided can sway people to remain or become supportive, because the value no longer focuses on justifying investment but in seeing their own success reflected back.

I once implemented a lessons-learned system on some pretty primitive technology when much better technology was available. Using the most advanced chat and search technology wasn’t the clincher for further investment. Engineers shared stories about what they learned from each other and the impact of that learning. Those stories proved a powerful attractor of continued funding.

Support sustainability initiatives

One of the other disruptions coming out of the next recession might be a deeper call for sustainability. Like ESG or not, some or all aspects of it will likely influence business decision-making going forward, even if the acronym eventually falls apart.

Sustainability readiness should derive from budget and data-driven design. Those organizations will learn how to measure the environmental impact of their investments, and if they work diligently, perhaps the social aspects as well. Data governance policies well implemented and precisely managed will go a long way toward IT delivering on its governance commitments.

Adopt Agility, not Digital Transformation

Digital transformation seems like a thing that can be done, then done with. It isn’t. Digital Transformation is what all organizations are doing all of the time and will continue to do in the future unless we regress to running organizations with wooden carts and the abacus. 

So stop talking about digital transformation. Every organization is already doing it. What they don’t do well is continuous reinvention, which requires agility. And I don’t want to call it Digital Agility because that is just a stupid phrase. Agility means being able to adapt quickly. Agility also includes a smattering of resilience because it’s hard to be agile when you’re dead.

Unlike Digital Transformation, Agility involves all of the concepts that push back against successful Digital Transformation, like culture and budget, silos and data access. Agile organizations seek to meet needs where they are and work through issues holistically rather than with a technology-first mindset. If the blocker for digital transformation is a cultural issue about who can see data, then digital transformation stalls. 

Agility-focused organizations can take up the power issue separately without tying it to any win or loss of a big project. Call out the problem and fix it, and once the dust settles, figure out automation, sharing, dashboards or whatever else will enhance the area now that it’s free from autocracy. Avoid pretending that technology is a lever to change behavior—find the right lever to change behavior and then talk about what technology can do.

The bottom line: keep figuring out what to do and what not to do, and do the things that make better sense, using the tools best fit to support those choices—not the most modern or the newest and coolest. Lead with improving the business incrementally on multiple fronts. The big project may bring focus, but it also runs the risk of making all things IT seem insurmountable, expensive, and massive when they don’t have to be.

Work from recognition of where you are and what you can do with things as they exist, rather than waiting for other investments to complete or payoff before taking action. By the time the big Data Lake project completes, you may find dozens of lost opportunities that could have returned tangible value had they not been put on hold waiting for the next big thing.

By the way, this also means that any thought of the current platform being the last and best should be put away next to Uarco printer rulers and removable hard drives. Tech company acquisitions will drive platform migration as organizations seek to consolidate data access and leverage business synergies—and platforms will not stop evolving. 

Today’s platform leaders will likely be yesterday’s platform leaders because all of the past platform leaders are, well, past platform leaders. IBM and HP, for instance, are still around, but they are not the same integrated enterprise companies they used to be, as they spun off large portions of their portfolios to the likes of Kyndryl and HPE. 

I used to run manufacturing systems on Burroughs B1800 and DEC Vax hardware with systems like Ask ManMan. I migrated from HP ManMan to DEC ManMan—which were very different systems on different platforms. We considered ourselves digital already—we were not transforming; we were transitioning. Gone, too, are Lotus Notes, Novell Netware, and other systems that large enterprises once relied upon. Something will eventually challenge SalesForce as it did Siebel and SAP. 

One aspect of managing with agility is not getting too attached to your tech. For innovative looks at mid-size solutions that might scale, look to companies like Sage, Monday.com, Hubspot and Apptivo.

Big tech regulation will likely also rekindle, forcing organizations to keep track not just of competitors but also remain agile amid global movements to regulate data, privacy, and technology reach.

Protect enterprise and customer data

Cyber-attacks will likely increase in 2023 rather than decrease, especially given the continued instability in Europe stemming from Russia’s war with Ukraine. Failures of cybersecurity threaten business continuity. They are also part of an overall data strategy. So while critically important, the data strategy mentioned above should include cybersecurity concerns as part of overall architecture and operations planning and execution.

It may not be this recession and its disruptive outcomes, but perhaps the next disruption, and at some point, people will demand ownership of their data. I want my patient health records to be mine. I want them portable and protected. I’m pretty sure healthcare organizations don’t share my zeal. There is a battle to be fought between healthcare and tech, with consumers likely on the side of Microsoft, Apple, and Google to start, but that may prove an ultimately unsatisfying alliance as the fine points of who owns what data come into play. Data ownership may eventually disrupt AI and advertising, which makes it a very turbulent space to monitor.

Hybrid Work: Strengthen the value proposition for distributed work

Many CEOs are getting distributed work wrong. They think the recession will force people back to the office, and they may be right. It doesn’t mean employees will be engaged, committed, loyal or happy when they reenter cubical land.

The COVID-19 pandemic proved several things, including distributed work works for many employees, and companies were not hurt by implementing it. Profits at large organizations continue to rise (tradingeconomic.com). CEOs receive exorbitant pay to shepherd their businesses and their workforces, distributed or not.

I talked with a technical recruiter recently who shared that most people she is talking to will not consider an in-office job. Period. They would rather wait for the next remote opportunity than return to an office.

CIOs need to recognize this reality even if their senior leadership teams don’t—yet, get it. There are just too many benefits to remote work, including no dreaded commute, reduced costs from gasoline, car wear-and-tear (if you even need a car), and the ability to be near family and pets, especially during times of need. Coming to the office to be more collaborative and innovative doesn’t rank on that list. At all. For most people. Rather than fight distributed work, make sure it works as much for the company as it does the individual.

Note: one of the fallouts of hybrid work will be excess office capacity. CIOs need to be aware and prepared to contend with physical infrastructure divestment, seeking ways to minimize cost and to leverage the reduction by, for instance, migrating newly deployed equipment that won’t be used to remaining offices that would benefit from an upgrade.

Become a better relationship manager

IT has always relied on relationships—it is, after all, primarily a service function, helping other functions fulfill their goals without having its own direct business objectives. That changes with the rise of e-commerce and other world-facing technology features that saw IT-like activities become first-class business drivers and the CIO either complementing a CTO or becoming one.

Regardless of how embedded IT is in the business, CIOs need to help their teams effectively manage relationships across the organization. IT fails for many non-technical reasons, and most of those non-technical failures derive from poor relationships between IT and its customers.

I have implemented customer relationship management for IT. IT CRM changed all the relationships with other organizations significantly for the better. If your organization isn’t yet investing in internal customer relationship management, doing so in early 2023 could make the difference between being agile in a hybrid work environment or struggling to be heard over the din of shouts about business challenges. Find ways to partner that quell volatility related to the economic storm rather than being seen as peripheral and irrelevant to navigating it.

Embrace uncertainty

I am a scenario planner by trade. So, of course, I’m going to suggest that IT embrace uncertainty and use scenario planning to navigate it better (as I did in this HBR post). 

But scenarios aren’t just about navigation; they also offer pathways toward opportunities that might not be imaginable in a status quo planning process which more often than not results in doing less of some things and more of others. Scenarios suggest doing different things should the circumstances change. And recessions typically change circumstances.

Creating effective scenarios also means IT might well get ahead of the next disruption, whatever that may be.

Organizations that build out scenarios early will be better positioned to leverage their insights than if they wait until the recession’s end when the runway to build value becomes much shorter.

CIO Priorities 2023: Things to keep an eye on but not to worry too much about during early 2023

The list above focuses on core issues that will definitely influence IT thinking and decision-making in early 2023. The following list covers areas of contingency or ongoing concern that might complement, complicate, or augment the core issues.

The Metaverse

The metaverse isn’t going anywhere and I don’t mean that in a positive way. Develop scenarios, and if virtual interactions of some sort offer value, pay more attention; if they don’t, early 2023 isn’t likely the make or break point of the metaverse—it’s just another part of a year-long slog toward realizing how hard it is to create immersive virtual environments that do more than entertain or train.

The Cloud

The Cloud is part of a technology arsenal. It is not the only part. Move when it makes sense, even migrate away if the costs outweigh the benefit of increased capacity and security. There is some movement toward a return to on-premises storage that the Cloud providers will go after with a vengeance. Hopefully, that vengeance includes reasonable costs for actual services used and relief from paying ahead for capacity that may never be used.

AI

AI will be in the conversation, but it’s going to become clear soon that the machine learning and pattern recognition approach to AI has its limits. It will do some things very well, including making recommendations and understanding individual data sets (even combined data sets), but it isn’t going to be any type of universal solution, and the current approach will not wake up and threaten humankind, or even have the capacity to recognize humankind as a concept. Humankind will remain the biggest threat to humankind, so AI and ethics work—and data ethics—need to focus on the ethics of people choosing what to use the technology for and what data is used for training it.

Open Source Software

I remain an open-source skeptic. I openly share that bias. I have seen open source work effectively for some aspects of infrastructure and utilities (Firefox, Audacity, Apache, VLC, Ruby on Rails, PHP, WordPress, and Linux), but I usually find in the enterprise application space, open source software requires significant investments to make it work, and keep it working—investments I would rather pay to a company with a reputation on the line and a need to keep me as a happy customer—with millions of users influencing features rather than developers negotiating their way forward. If they use open source, that’s fine, but it’s up to them to reconcile versions, not me.

A final sprint

Although this advisory seeks to document a shared set of issues across organizations and industries, it may not be equally executable. The most likely differentiation comes from organizations facing significant issues, such as Amazon’s retail business, and organizations that bet on the continuity of COVID-19 pandemic behaviors such as collaboration vendors that no longer see a rapid rise in adoption.

Those organizations should focus first on redesigning for balance and agility. Scenarios can help smooth organizations designs that too often swing rapidly from optimistic exuberance to overwhelming despair. In the near term, designing for a new balance may involve painful job cuts and the shedding of underperforming business units—but it also offers an opportunity for traditional IT staff to migrate to more profitable parts of the business, such as Amazon e-commerce team members finding roles at AWS.

CIOs and CTOs must work closely with senior leadership to deliver the skills, capabilities, and capacity required to support business continuity. Poor strategic choices in the past do not negate any of the practical advice stated above. Doing the work on this list and paying attention to emerging issues will prove the best preparation where there is time to prepare and act as a solid foundation for a rational reaction under pressure. If at all possible, avoid making under-analyzed decisions that may come back to create new problems in the future.