Welcome to the latest edition of the CIO In The Know newsletter. Insights that move CIOs forward.
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It’s been a couple of weeks and a doozy of insights for the CIO. Our CIO Think Tank held their monthly call along with several other CIO advisory board discussions. In this installment, I’ll provide a snapshot of the lengthier discussions. Let’s dig in.
In Discussion: What is on the minds of CIOs?
In the last newsletter I covered many different areas that are coming up my discussions with CIOs. Right now, several topics are top of mind including economic uncertainty/ budgeting, organizational impact of AI and strategic alignment. There is also a quelling of the AI froth. More on that later as it requires its own discussion to understand the nuances and impact.
Economic uncertainty and budgeting
As CIOs start to think about 2027 budget planning, along with balancing the existing 2026 budget, challenges are all around. To say it is messy would be an understatement.
CIOs continue to struggle with economic uncertainty, and it is having a direct impact on current and future budgets. It presents a specific challenge as we traverse Q3 when many orgs are starting their FY2027 budgeting process.
Current budgets are facing significant pressure from constantly moving pricing targets. This is coming from several directions. Fundamentally, pricing is going up and changing dynamically. I’m hearing about jaw-dropping 50%, 200% and even 300% increases.
From a timing perspective, price quotes that once may have lasted weeks to months are now only good for days. The problem is that the enterprise budgeting process along with the approval and procurement process takes time. Even the approval and procurement process takes more than just a few days. In the current environment, a price quote could expire and go up significantly in cost between the time it was submitted and the PO issued. This creates rework and rethinking.
Economic uncertainty is creating pressure from customers to suppliers. For those playing on a global level, there is complexity never seen before. All of these variables are creating a very challenging environment for businesses and their technology organizations to navigate and make decisions. To say that the current situation is dynamic would be understating the reality.
A secondary impact is flowing into IT strategic thinking around on-prem vs cloud utilization. CIOs are rethinking what aspects of their portfolio they bring on-prem. However, due to infrastructure availability challenges and dynamic pricing, it is throwing a monkey wrench into the thinking.
All of these factors are equally making it challenging for vendors who are looking to plan customer demand and when deals may close.
Strategic alignment
For some time, CIOs are getting closer in their relationships with fellow c-suite members. Today, that alignment is critical especially with the increasingly dynamic nature of the world we are operating in.
CIOs are more engaged with their CEO, CMO, CHRO, COO and CFO than ever before. At the root is a focus on the ‘big three’ (CX, EX, Business Operations). AI is largely pushing this focus on CX, EX and business operations.
I’ve talked about this before that the CIO, more than ever, needs to think like the CEO. That is very different from thinking like the ‘CEO of technology’. Thinking like the CEO helps align with a broader context that better aligns with the c-suite.
Organizational impact of AI
Speaking of relationships with CHROs, CIOs are getting closer than ever to their CHRO. AI is driving this engagement on three dimensions: 1) The technology that is used to build, manage and evolve organizations, 2) the use of AI within the organization to benefit and provide guidance for organizational dynamics, and 3) the CIOs use of AI alongside the CHRO.
There has been a talk track suggesting that AI is driving the IT and HR orgs under one leader. Moderna was the poster child for this where both orgs were moved under one leader.
As we get to know more about AI and more deeply understand its relationship within IT and HR, this talk track is largely subsiding. It’s becoming clearer that AI is not likely to force the two orgs to merge. However, it is likely that there are similarities that both the CHRO and CIO can benefit from in their respective use of AI and supporting their respective missions.
What’s News
Much of the conversations center around uncertainty and bringing stability to the conversations around AI. The OpenAI/ Hugging Face AI security incident was a bit of an eye opener this week, but not surprising either.
Here’s the latest from the blog and upcoming podcast episodes.
New blog posts
New podcast episodes
New CIO In The Know podcast episodes drop starting Monday 7/27. Monday’s episode is a conversation with Howard Miller, CIO at the UCLA Anderson School of Business.
Be sure to subscribe on Apple Podcasts, Spotify or wherever you get your podcasts so you don’t miss a conversation.
Upcoming Events
Today I’m joining a live discussion on LinkedIn with analysts Jon Reed and Brian Sommer for a discussion on what CIOs are getting right…and what they are getting wrong. Should be a lively discussion!
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