The CTO Revelation
Redefining responsibility, accelerating discovery

The CTO Revelation

Redefining responsibility, accelerating discovery



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From digital to virtual, overnight

More and more, today’s technology leaders are discovering their own heightened importance within the C-suite. Already at the center of modern society, technology’s influence has been further elevated by pandemic-accelerated innovations. Organization leaders rely on experts in tech strategy, architecture, and operations now more than ever, giving Chief Technology Officers (CTOs) amplified authority and responsibility that will only grow in the years ahead.

That the CTO has become one of the most strategic roles within an organization may come as a revelation for some, yet this positioning has been years in the making. CTOs are aligned to lead a new “Virtual Enterprise” model that is emerging, fueled by a fresh post-digital approach to business opportunity.

In Q2 and Q3 2021, the IBM Institute for Business Value (IBV) surveyed 5,000 C-suite technology leaders, including both Chief Technology Officers (CTOs) and Chief Information Officers (CIOs). A select group of executives was contacted for in-depth qualitative interviews, revealing insights about their on-the-ground experience leading organizations throughout a period of exceptional disruption. With respondents spanning 29 industries and 45 locations worldwide, this study marks our first significant look at the evolving influence and responsibilities of the CTO role.

The CTO Revelation
Redefining responsibility, accelerating discovery


Bookmark this report  

From digital to virtual, overnight

More and more, today’s technology leaders are discovering their own heightened importance within the C-suite. Already at the center of modern society, technology’s influence has been further elevated by pandemic-accelerated innovations. Organization leaders rely on experts in tech strategy, architecture, and operations now more than ever, giving Chief Technology Officers (CTOs) amplified authority and responsibility that will only grow in the years ahead.

That the CTO has become one of the most strategic roles within an organization may come as a revelation for some, yet this positioning has been years in the making. CTOs are aligned to lead a new “Virtual Enterprise” model that is emerging, fueled by a fresh post-digital approach to business opportunity.

In Q2 and Q3 2021, the IBM Institute for Business Value (IBV) surveyed 5,000 C-suite technology leaders, including both Chief Technology Officers (CTOs) and Chief Information Officers (CIOs). A select group of executives was contacted for in-depth qualitative interviews, revealing insights about their on-the-ground experience leading organizations throughout a period of exceptional disruption. With respondents spanning 29 industries and 45 locations worldwide, this study marks our first significant look at the evolving influence and responsibilities of the CTO role.

The CTO Revelation
Redefining responsibility, accelerating discovery

“When everything becomes digital, technology becomes the core business and the CTO becomes as key as the CEO.”

— Moises Nascimento, CTO, Banco Itaú

The expanding influence of CTOs

As enterprises redefine themselves for survival in a post-pandemic marketplace, the spotlight shifts to technology executives and the organizations they lead. “Technology strategy is intertwined with business strategy,” says Randeep Sekhon, CTO of India-based telecom conglomerate Airtel. Dr. Mark Maybury, CTO of US consumer-goods manufacturer Stanley Black & Decker, observes, “For the first time in our species, technology can help us with exponential growth enabled by advanced sensors, quantum computing, and artificial intelligence.”

In this inaugural IBM CTO study, we see the tech leadership role increasingly split between the Chief Information Officer (CIO) and the CTO, with the CTO role being relatively new in the C-suite. The ascent of the CTO is radically influencing a stronger sense of responsibility around technology decisions, the speed of innovation, and discovery of new solutions. CTOs are also increasingly promoting a philosophy of co-creation and partnerships driven by common values and open standards.

Explore key insights from global CTOs

01

A rapid
ascent

See how technology leaders are championing a more strategic vision of technology.

Read

02

The best of
both worlds

Learn how tech leaders are advancing business outcomes and working with CIO colleagues to deliver value.

Read

03

Finding
focus

Explore the 3 discrete CTO mandates and what defines success for each of them.

Read
01A rapid ascent

The responsibility for a better future

As technology has permeated virtually every business function within today’s organizations, the role of technology leaders has evolved dramatically in complexity, stature, and impact. CEOs agree. When we recently asked 3,000 CEOs to identify the C-suite executives most critical to their organizational success, CTOs and CIOs jointly ranked in the top 3 behind CFOs and COOs. Among CEOs at the top 20% of organizations based on financial performance, technology leaders were second only to CFOs.

40%

of CTOs indicated they now report directly to the CEO.

67%

of CTOs said they report directly into the C-suite versus a business unit or geography leader.

29%

of CTOs expect their next role to be a CEO.

Today’s CTOs are charged with transforming technology into a strategic asset and articulating a focused vision for its role—whether through enabling platforms, propelling innovation, or defining responsible and sustainable design patterns and architectural principles. They are well positioned to steer initiatives in a world where the technology function is core to every interaction and every business process.

Perspective: Sustainable opportunities

How the C-suite is addressing some of the biggest challenges of our time.

Learn more
CTOs are increasingly examining how they design and consume technology services, with a focus on creating a culture of responsibility and sustainability. This encompasses a range of concerns, such as:
  • Inspiring innovations that positively impact society
  • Promoting secure, transparent, and fair use of data
  • Using technologies efficiently
  • Addressing bias and fostering equality with inclusive systems
  • Reducing environmental and economic impact with conscious code choices
  • Designing and operating data centers with an emphasis on energy awareness and environmental impacts
  • Today’s CTOs are charged with transforming technology into a strategic asset and articulating a focused vision for its role—whether through enabling platforms, propelling innovation, or defining responsible and sustainable design patterns and architectural principles. They are well positioned to steer initiatives in a world where the technology function is core to every interaction and every business process.

    CTOs are increasingly examining how they design and consume technology services, with a focus on creating a culture of responsibility and sustainability. This encompasses a range of concerns, such as:
    • Inspiring innovations that positively impact society
    • Promoting secure, transparent, and fair use of data
    • Using technologies efficiently
    • Addressing bias and fostering equality with inclusive systems
    • Reducing environmental and economic impact with conscious code choices
    • Designing and operating data centers with an emphasis on energy awareness and environmental impacts
  • Technology leaders stepped up during the pandemic to address their organizations’ most pressing needs. This includes accelerating the rate of digital transformation, adjusting the approach to change management, and shifting to more cloud-based business activities.

    CTOs have aligned their financial decisions with the expectation of continued adoption of emerging technologies to move their businesses forward. In fact, organizations that integrate core technologies most effectively can experience massive benefits. Recent IBV research revealed that those strategically integrating cloud with open organizations, operational enablers, exponential technologies, and advanced data capabilities positioned themselves to unlock a 13-fold increase in revenue. Such gains illustrate the transformative power of a hybrid cloud strategy.

    The percentage of CTOs reporting advanced capabilities has risen dramatically since 2019:
    600%
    Digital process automation and intelligent workflows
    530%
    Hybrid cloud operations
    353%
    Cloud-native development
    347%
    Cloud-native deployment
    282%
    Data insights and AI
  • The role of CTOs has evolved to encompass some of the organization’s most far-reaching capabilities—running the gamut from defining a tech strategy to implementing it responsibly. The strategic nature of their job has placed them in a position of heightened interaction with senior leadership, with 55% of those surveyed noting their primary C-suite engagement is with the CEO and an equal percentage engaging with the Chief Operating Officer (COO).

    With an increased level of input, tech leaders must refine their communication skills. Ericsson’s Vice President and Head of Global Competence Center, Lotta Karlsson-Boman, notes, “Many started on a very technical level and then moved into higher management positions. It has been easy to hide behind deep technical discussions. You now need to have totally different discussions with the business. And you need to have the confidence to question the business.”

    The breadth of responsibilities also requires a balancing act. On the one hand, CTOs must understand how technology contributes to—and can remediate—operational challenges, while on the other hand, they need to see how technology innovation can seed new opportunities.

    55%
    of CTOs report engaging with their CEOs and COOs more than with any other C-suite leader.
    “In order to leverage the power of data, I work together with the CIO and the Chief Data Officer to guide the organization towards a more consistent use of platforms and data models.”— David Wood, CTO, KPMG in the UK
  • As the CTO role has ascended to the senior-most ranks of the organization, CTOs are turning to their CIO counterparts as crucial allies within the technology function. At a high level, the technology function has a common set of responsibilities that are typically distributed between CTOs and CIOs. Regardless of industry or organization, CTOs are focused on a core set of responsibilities, namely technology strategy, operations, and architecture; in contrast, CIO responsibilities vary greatly by industry and organization.

    CIOs tend to own a broad set of responsibilities that bridge from the C-suite to the business units. More than 70% of surveyed technology leaders report that CIOs own back-office applications, including supply chain, workforce engagement, end-user experience, and workplace enablement.

    One might generally characterize CIOs as operating across the organization, often in a “diagonal” sense of interfacing at different levels of the organization. Their success depends on their proficiency in doing so. On the other hand, CTOs are inclined to focus on a more defined set of responsibilities, which enables them to address the most strategic opportunities and the most pressing challenges influencing their organization’s use of technology.

    Finding common ground

    How responsibilities are allocated
    across the technology function

02The best of both worlds

Collaboration at the crossroads

Technology adoption in and of itself doesn’t deliver optimal value. But when deployed strategically, effectively, and often in tandem, technologies such as hybrid cloud, AI, and automation can enable modern enterprises to transform massive change into substantial benefits. How to best lead the technology function and drive success? The executives we spoke with consistently returned to a specific theme: collaboration.

Curiously, despite what appears to be widely recognized as the ideal situation, our research reveals that CTOs and CIOs are often working independently. Only 45% of CTOs indicate frequent interaction with their CIO counterparts. Similarly, just 41% of CIOs highlight frequent interaction with their CTO peers.

So, why aren’t CTOs and CIOs sitting together at lunch? As KPMG CTO David Wood puts it, “The CIO is more focused on technology infrastructure and operations, whereas I am more focused on setting technology strategy. We are both grateful for each other, although I’m not sure I’d want to do his role!”

Ultimately, however, it is collaboration that fuels the most impactful business results, as we will quantify below. “There is a constant tradeoff between the CTO and the CIO,” says Cristina Alvarez, Chief Technology Officer of Spain’s Banco Santander. “But if we disagree on strategy, transformation is not going to happen.”

We assessed the organizations in our study on 3 measures of performance:
  • Technology maturity—the stage of their cloud, AI, automation, and security journeys
  • Technology effectiveness—their agility, data management, governance, and resilience
  • Technology ROI—the return on their technology investments, normalized by industry

Our analysis indicates that organizations reporting higher technology maturity, technology effectiveness, and technology ROI achieved better business performance. In particular, we discovered financial gains accelerated during the pandemic—organizations with higher technology measures built a substantial advantage over their peers.

High performers pull away

Organizations with stronger tech measures report a financial performance premium relative to peers with lower tech measures

  • Our analysis indicates that organizations reporting higher technology maturity, technology effectiveness, and technology ROI achieved better business performance. In particular, we discovered financial gains accelerated during the pandemic—organizations with higher technology measures built a substantial advantage over their peers.

    We assessed the organizations in our study on 3 measures of performance:
    • Technology maturity—the stage of their cloud, AI, automation, and security journeys
    • Technology effectiveness—their agility, data management, governance, and resilience
    • Technology ROI—the return on their technology investments, normalized by industry
    High performers pull away

    Organizations with stronger tech measures report a financial performance premium relative to peers with lower tech measures

  • Success is based on an organization’s ability to drive business value and capabilities throughout the enterprise in a strategic, structured, efficient manner. As business and technology operations converge, technology leaders need to think differently to align their business, operations, and technology strategies.

    Our analysis suggests such value stems from the ability to bring assets, resources, insights, and opportunities together—dynamically and in response to real-time variables. The efficiency and effectiveness of these capabilities can make a huge difference in business outcomes. These capabilities are less centralized and more distributed. Realizing the associated benefits depends less on optimizing resources, and more on enhancing connections and accelerating insights.

    Given the growing complexity and interdependence of technology strategy and operations, these responsibilities are increasingly shared. For CIOs, that may mean leveraging technology as a core business capability, and serving the day-to-day technology needs of diverse constituents and stakeholders. For CTOs, this may mean taking a leadership role in developing a more comprehensive, holistic approach to technology strategy, architecture, and operations.

    Core convergence

    In combination, the below 6 value drivers can create new value propositions that dramatically extend the reach and impact of technology. In this report we explore 3 value drivers in which CTOs are leading strategic efforts: innovation, purpose, and partnerships.

  • “Innovation is a competitive battleground,” says NatWest’s Kevin Hanley. “We need to drive the culture inside the organization, shine the light on technology direction and big broad trends, and think about what it all means to the business.”

    But how can organizations pick up the pace of innovation? One answer lies in the scientific community’s response when faced with the urgency of the COVID-19 crisis. Technologies such as AI and hybrid cloud empowered scientists to speed up the scientific method and remove long-standing bottlenecks. With the pandemic as a proving ground, employing modern technologies forms the basis for a new era of accelerated discovery. This approach can extend advances beyond the realm of science, leading not only to new business opportunities but entirely new asset classes, services, and markets. The difference: those willing to adopt the rigor of the scientific method of discovery and experimentation to make evidence-based business decisions.

    Developments in the materials science field demonstrate the potential of scaling the scientific method to accelerate discovery. Deep search, AI- and quantum-enriched simulation, generative models, and cloud-based, AI-driven laboratory environments are delivering faster innovation in a domain known for intensive, highly complex workloads. Hybrid cloud has provided a bridge across a mix of data and compute resources—facilitating the integration of additional technologies, such as quantum computing and intelligent simulation—that enable scientific discovery at speed and scale.

    80%
    of CTOs surveyed indicate that accelerating the discovery process is central to future growth for their organizations.
    “The technologist enables the organization in a digital world. CTOs are at the center of the business model, impacting decisions downstream and upstream.”— Kevin Hanley, Director of Innovation, NatWest Group
  • In our conversations with executives, they voiced a recurring theme: the unique sense of ownership from CTOs around connecting the values and purpose of an organization with broader considerations. They also discussed technology’s influence and its impact on the environment and society at large.

    “We can save lives with technology,” notes NHS Digital’s Mark Reynolds. “CTOs bring the right tools to bear at the right places. The national booking service for COVID-19 vaccines didn’t exist. Now we make a million bookings a day. With the data we had available, we were able to identify patients at risk of death from COVID-19 with 30,000 conditions and so provide guidance and support.”

    Adds Direct Line’s Sarah Greasley, “We have a purpose for good with technology. COVID-19 raised awareness of what tech can do. It’s much more explicit now. How can we use technology to prevent things from happening rather than react?”

    Tech leaders are looking both inward and outward with their responsibilities. Ethics, along with diversity and inclusion, are rated as the most important attributes for engaging employees, according to CTOs. The same is true when selecting technology partners; CTOs state their highest priority is identifying those whose values align with theirs.

    In a time when responsible computing is at the forefront, CTOs are wrestling with important, yet hard-to-answer, questions such as:
    • Are they minimizing the impact of infrastructure on the environment?
    • Are they being thoughtful in having efficient code?
    • Do they use citizen data in ethical ways?
    • Are their systems inclusive?
    • Do they cater to the diversity of humanity that they serve?
  • Ecosystems and partnerships are essential to unlocking the potential of a Virtual Enterprise. To create value propositions that transcend traditional boundaries, organizations require sophisticated and robust data sharing practices; policies that support changing compliance requirements; intelligent workflows that extend beyond functional siloes; a common approach to cybersecurity threats; and open innovation procedures that facilitate cross-functional collaboration. These responsibilities are calls-to-action for technology leaders.

    CTOs have front-row seats to digital transformation and can play an instrumental role in enabling extended workflows based on emerging “threads of value.” Prominent among their responsibilities, CTOs are tasked with translating the promise of modern technologies to the C-suite and, increasingly, to the Board. Additionally, CTOs are finding new opportunities in strategic partnerships. By sharing insights, services, and customers across the ecosystem, partnerships can unlock entirely new business models.

    In reflecting on the goals of partnerships, CTOs in this study stated that sharing data insights effectively was the top objective. Among the other highly cited purposes: enhancing transparency and visibility, improving trust, and advancing collaboration.

    3 out of 4
    CTOs cite ecosystem partners as a significant conduit in furthering innovation and discovery.
    “We need to discover what themes the market is pursuing, identify technologies to bring these themes to reality, and partner with companies that specialize in these technologies.”— Shigeki Takayama, Representative Director and Vice-Presidential Executive Officer, Asahi Kasei Corporation
03Finding focus

The 3 CTO Mandates

As the technology portfolio expands and diversifies, so too do the responsibilities of technology leaders. How the CTO or CIO role is defined often reflects factors that have little to do with the individual leader and more to do with organizational structure and allocation of responsibilities.

To gain insight into how and where CTOs may gain the greatest value from working with their CIO counterparts, it is important to understand how the CTO role has been defined in specific organizations.

CTO roles are, in general, remarkably homogeneous in their responsibilities. Of those surveyed for this report, more than 90% cite technology strategy, technology operations, and technology architecture among their key areas of ownership, and these areas are where they primarily spend their time. Interestingly, CIOs were rarely so consistent in their responses. CTOs also predominantly identify themselves as technology visionaries and transformational business leaders. Their main measure of success is the launch of technology-enabled platforms.

To help CTOs better contextualize their experiences within that of their peers, we have identified 3 distinct CTO mandates.

These CTOs represent about 40% of our global survey sample and are distinguished by the outward-focused nature of this directive. When it comes to identifying and building strategy, this group is encouraged to identify and incorporate insights and inspiration from outside the organization. In addition, these CTOs most commonly describe themselves as organizational and ecosystem integrators.

However, Technology Stewards are not lone wolves or disconnected from their organizations. In fact, they report a high rate of collaboration within the technology function. While looking outward, they also prioritize applying any new insights internally. This group reports the highest technology effectiveness as well. While the technology maturity of these CTOs’ organizations is only middle-of-the-road, their progress is fueled by new perspectives.

Top responsibilities
  • C-suite and Board advisory: 88%
  • SDLC: 72%
  • Cybersecurity: 69%
  • Data privacy: 66%
  • Ecosystem strategy: 60%
Top time investments
  • Data privacy: 50%
  • C-suite and Board advisory: 39%
  • SDLC: 34%
  • Ecosystem strategy: 29%
  • These CTOs represent about 40% of our global survey sample and are distinguished by the outward-focused nature of this directive. When it comes to identifying and building strategy, this group is encouraged to identify and incorporate insights and inspiration from outside the organization. In addition, these CTOs most commonly describe themselves as organizational and ecosystem integrators.

    However, Technology Stewards are not lone wolves or disconnected from their organizations. In fact, they report a high rate of collaboration within the technology function. While looking outward, they also prioritize applying any new insights internally. This group reports the highest technology effectiveness as well. While the technology maturity of these CTOs’ organizations is only middle-of-the-road, their progress is fueled by new perspectives.

    Top responsibilities
    • C-suite and Board advisory: 88%
    • SDLC: 72%
    • Cybersecurity: 69%
    • Data privacy: 66%
    • Ecosystem strategy: 60%
    Top time investments
    • Data privacy: 50%
    • C-suite and Board advisory: 39%
    • SDLC: 34%
    • Ecosystem strategy: 29%
  • These CTOs, representing about a third of our global survey sample, are distinguished by the internally focused nature of their mandate. They are tasked with building a forward-looking strategy from the inside out, influenced and informed by business unit needs. When identifying tech priorities, this group uses what’s available and working, and looks for ways new technology can enhance the value of their existing investments.

    Interestingly, this group reports the lowest collaboration with CIOs among the 3 CTO mandates. And, as would be expected given their inward focus, their organizations also have the lowest technology maturity among the 3 mandates. However, that focus seems to pay off in terms of ROI, as Operational Experts report the highest technology ROI on investments.

    Top responsibilities
    • C-suite and Board advisory: 78%
    • Innovation strategy: 61%
    • Business continuity: 59%
    • Cybersecurity: 56%
    Top time investments
    • Cybersecurity: 39%
    • Innovation strategy: 38%
    • Data privacy: 30%
  • This group of CTOs represents just over a quarter of our survey respondents. They might well be described as “CIOs in disguise” as they seem to straddle both CTO and CIO responsibilities. However, their role is focused more on driving business revenue, suggesting the utility-focused nature of this group’s mandate.

    Perhaps unsurprisingly, this group reports the lowest technology effectiveness among the 3 cohorts. But these Hybrid Heroes deliver dramatically when it comes to collaboration and tech maturity. With a broader mandate covering more areas of ownership and partnership opportunities, these CTOs report high collaboration and the highest tech maturity.

    Top responsibilities
    • SDLC: 65%
    • Cybersecurity: 60%
    • Innovation strategy: 58%
    • Workplace enablement: 55%
    • C-suite and Board advisory: 51%
    Top time investments
    • SDLC: 34%
    • Workplace enablement: 33%
    • Innovation strategy: 31%
“The technologist enables the organization in a digital world. CTOs are at the center of the business model, impacting decisions downstream and upstream.”
— Kevin Hanley, Director of Innovation, NatWest Group
Planning for the road ahead
“I play a complementary role with the CIO. I would characterize us as bridging the technology business as we move to a much more agile organization.”
— Sarah Greasley, CTO, Direct Line Group

The CTO’s world is profoundly different than it was a couple of years ago. Organizations where CTOs embrace the challenge and changes as strategic opportunities can build on strong technology leadership and aim for a decisive advantage moving forward. Successful CTOs understand the businesses they support, the evolving technology and risk landscape, and how to connect the pieces.

“I play a complementary role with the CIO. I would characterize us as bridging the technology business as we move to a much more agile organization.”
— Sarah Greasley, CTO, Direct Line Group

The stakes are high, but so are the prospects for success. Technology investments are driving greater collaboration, increased effectiveness, and modern ways of working beyond organizational boundaries.

To seize this new reality with energy and openness, all CTOs should start with these guiding principles:
Model responsible leadership
Envision and invest in a bold future
Pursue new possibilities with unexpected partners
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