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New CTO role at Starbucks reflects rise of digital business

Clint Boulton | Oct. 12, 2015
Starbucks’ hiring of Adobe CIO Gerri Martin-Flickinger as its CTO underscores the importance digital innovation is playing in traditional businesses. But does it also mean the CIO role is under siege?

Burris says Starbucks may want to capitalize more on the "three or four hours a day" some knowledge workers spend working alone or meeting with colleagues in the company's 22,000 plus global stores, which provide free Wi-Fi and, in some locations, wireless charging. One possibility could include technical support services to improve consumers' experiences. "Technology can be applied to win, serve and retain customers, even inside one of those traditional businesses -- the coffee shop," Burris says. "Starbucks is doing it, and clearly [hiring Martin-Flickinger] signals that they're going to do more."

CIO role stronger than ever (outside of Starbucks)

The move means the CIO title is on hiatus, if not retired, at the Seattle coffee giant. Does this mean the CIO role is under siege? Hardly, says Gartner’s Waller. The CIO role is more crucial than ever, with 39 percent of CIOs Gartner surveyed reporting that they are essentially performing a chief digital officer role for their businesses. “That’s a very healthy amount and we’re seeing a lot of data points that suggest CIOs are stepping up and playing this role,” Waller says.

Despite Gartner’s reassuring words, the proliferation of digital has thrown titles and roles in flux. In many companies, CIOs command both back-office functions and facilitate digital innovation. In others, the duties are split, with CIOs retaining back-of-the-house tasks as chief digital officers, CTOs and even CMOs assume responsibility for technology innovation. Some CIOs are finding that the digital disruption is whittling down their responsibilities and, in some cases, their budget. As noted Tuesday, PwC found in a September survey that the number of CIOs leading internal and external digital efforts will drop from 40 percent today to 35 percent in three years. And 68 percent of digital spending comes from budgets outside of IT department’s budget, a significant increase from 47 percent the prior year.

Starbucks isn’t the only major brand where technology strategy is facilitating titular changes at the top. General Electric last month named Bill Ruh to the position of chief digital officer, leading the new GE Digital division. Ruh will bring to bear the 1,200 software experts at his disposal on the company's industrial Internet strategy, which includes predictive analytics and sensors to improve machine performance. CEO Jeffrey Immelt says the move will "grow our software and analytics enterprise from $6 billion in 2015 to a top 10 software company by 2020. Tesco in June appointed Edmond Mesrobian CTO, replacing CIO Mike McNamara, who left in February to become CIO of Target.

Regardless, CIOs – no stranger to change management – must weather the digital changes in the face of professional peril. "Every leader needs to become a digital leader, and every business needs to become a digital business,” Waller says.


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