UNO May 2016




You are probably wondering what the acronyms CTI and CIO stand for.

In the current “gigabit society,” they are the most significant positions in companies, and are now among the most sought-after in innovative ecosystems such as Silicon Valley, Israel, China or the Nordic countries.

CIO (Chief Information Officer) now refers to the person in charge of systems in their organization, or the IT director, a position that is very important but not strategic and usually involves solving operational problems related to connectivity and computing services.

The CTO has a fundamental role; it is no longer about providing the company a technological service for its operational functioning, but about rethinking the business

CTO (Chief Technology Officer) is not only the director of Information Technologies in the company, but also in charge of innovation and research the company needs to transform its competitive advantage.

What is the main difference between these positions and why are they so important in the organizational structure of companies moving into the future?

Nowadays, companies are being questioned about their services, productivity and the way they connect with stakeholders, which are all key elements with regard to the sustainability of their business. This is why the emergence of CTOs is strategic for the development of organizations in the future.

013_1One example we have seen in recent days in Chile is the case of the transport company Uber versus traditional taxis, and how a new business model, which operates under the logic of apologizing rather than asking for permission, is threatening years of regulation in the transport market, but by providing a better service at better prices is valued more highly by society. But examples such as the previous one not only occur in the transportation industry; thanks to the new technologies available, they are also cropping up in all areas of human interaction. We have Amazon and Alibaba in Retail, or Airbnb in hotels, or Waze in traffic flow management, etc. That is to say, the new technological trends, such as cloud computing, mobility, the Internet of Things and Big Data analysis, are challenging the competitive advantages of companies and organizations and modifying the well-known strategic forces identified by Porter for analyzing a business.

Here, the CTO has a fundamental role; it is no longer a matter of providing the company a technological service for its operational functioning, but rather of rethinking the business given the new production paradigms in existence and thereby combating the threats to sustainability that are now present, such as imitation or customer retention and, at a more profound level, the replacement of your business model with a better cost alternative that is more efficient and easy to manage, as has been the case with digital machines and many others examples that we could name.

When we speak of digital transformation in Chile, we are talking then about evaluating our competitive strategies with these new technological capabilities and their adaptation in our company, by re-educating our collaborators and rethinking the company’s sustainability.

The challenge of working with a new organizational structure is urgent

The challenge of working with a new organizational structure is urgent; the leading companies in the world today are already doing so, and the CEOs that traditionally came from the field of finance or the commercial arena now come from the world of technology, because the new paradigms are changing so rapidly that if we do not adapt our models, we run the risk of being left by the wayside.

My concern is that if there are no good leaders (CTOs) in strategic positions within the company who have the necessary time to gain in-depth knowledge of the company’s business model, and who have earned the trust of work teams and board of directors, it may lead to strategic decision making being poorly evaluated, without having considered the true extent of the new technological trends, thus wasting many years of work and effort of our companies in Chile.

Pelayo Covarrubias
President at Fundación País Digital and Director of Institutional Relations at the University for Development / Chile
He graduated as a commercial engineer from the University Finis Terrae. In addition, he holds an MBA from the Catholic University of Chile Currently, his roles include president at Fundación País Digital and director of Institutional Relations at the University for Development. [Chile]


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