And the turbulent forces shaping businesses in today’s always-on global marketplace promise to accelerate that ongoing evolution. In that context, I’ve put together a list of what I believe will be the top priorities for strategic CIOs in the coming year.
As you’ll see, each of these 10 is rooted in change, and calls for the CIO to be a leader instead of a follower; a disrupter instead of a go-alonger; and a business-driven executive instead of a tech-focused manager.
Several themes reverberate throughout: analytics, breaking down silos, social, the cloud, and particularly customers, opportunities, growth, and innovation. I hope these prove helpful, and please share your feedback in the comments section below or on Twitter at @bobevansIT and @christianmcm.
1) Simplify IT and Transform Your Spending: Kick the 80/20 Budget Habit. While surely not as sexy as Social and Business Analytics and Cloud, this bold decision to take an entirely new approach to IT infrastructure is the one and only way CIOs can unlock the funding necessary to pursue those snazzier and unquestionably vital new initiatives. Far too many companies today find that they need to devote 70% or even 80% of their IT budget just to run and maintain what they’ve already got, leaving as little as 20% for innovation. And if you wonder sometimes why you’ve got precious little IT budget available to fund growth-oriented innovation, the answer becomes pretty clear by looking at the list of usual suspects that have brought us to this point: server sprawl, massively underutilized storage resources, unproductive data centers, labor-intensive integration requirements, and a near-endless list of “strategic” vendors. The IT policies of the past that resulted in the 80/20 trap are simply no longer able to meet the needs of today’s intensely demanding and always-on business world, and are indeed becoming liabilities not just because they’re inadequate but also because they suck up vast percentages of the IT budget and make it almost impossible for CIOs to fund essential new efforts in analytics or cloud or mobile or social. CIOs need to determine which vendors are only exacerbating this problem, and which ones offer modern alternatives that are cheaper, faster, and smarter. My POV: CEOs should tie most or all of the variable compensation for their CIOs to changing that deadly 80/20 budget ratio by 5 percentage points per year. The CIOs willing to tackle this huge issue will not only earn some nice bonus dollars but will unlock huge value for their companies as well as for their own careers.
2) Lead the Social Revolution: Drive the Social-Enabled Enterprise.When social media began to invade the corporate world some years back, the traditional border-collie behavior of many CIOs triggered immediate and unconditional opposition to social tools on the grounds of security challenges, lack of familiarity, and unproven value. As social’s ability to forge new and more-immediate relationships with customers became more clear, some CIOs grudgingly agreed to let down the drawbridge (but they drew the line at removing the alligators from the moat!). Today’s business-technology leaders must go well beyond that passive acceptance and become passionate and unconditional zealots for the social-driven revolution and its ability to help their companies grow by providing real-time customer insights, engagements, and processes. Beyond customers, the social revolution is also becoming indispensable internally for motivating existing employees and recruiting great new talent, and in forging deeper and more-valuable relationships with partners. My POV: CIOs who fight this trend will be pushed aside by CMOs and LOB heads who understand social’s potential and know they can’t compete unless that potential is harnessed by the company for competitive advantage. And what does “pushed aside” mean? At best, temporary embarrassment, and at worst, demotion or even unemployment.
3) Unleash Your Company’s Intelligence: Create the Enterprise-Wide Opportunity Chain. Building on but transcending existing notions of supply chain and demand chain and data warehouses and data marts, the Opportunity Chain transforms that internally oriented information into the customer-centric and growth-driven language of opportunity. New prospects, new market trends, new chances to engage, new insights for new products, new demographic patterns: information and insights about all of these probably exist somewhere within your corporate IT maze but are almost impossible to find because we cloak them in IT-specific terminology and then trap them in incompatible silos. But today’s new and always-on global marketplace requires new insights driven by the social revolution, and many of our old and trusty systems and approaches are simply not suited to the new realities demanded by our customers and by our times. In addition, the Opportunity Chain concept provides a market-facing framework and context for richly exploiting the potential of business analytics and Big Data. My POV: Whatever it’s called, this idea of the Opportunity Chain gives CIOs a fantastic, well, opportunity to drive high-value new information assets throughout the company and demonstrate again that when business technology is aggressively imagined and led, it drives growth and sparks new and deeper engagements with customers.
4) Embrace the Engagement Economy: Merge the Back Office and the Front Office into the Customer Office. One of the most-valuable perks of being a CIO is the ability to be involved with and understand not just some but all of a company’s end-to-end processes. From manufacturing to marketing, from procurement to product development, from finance to Facebook, the CIO and the business-technology team have tremendous insights into how a company’s operations, its priorities, its vulnerabilities, and its opportunities. So today, as our systems of record become systems of engagement, and as the social revolution opens up all facets of our enterprise to customer interactions as well as customer scrutiny, isn’t it time to bulldoze the internally constructed silos separating the folks that have traditionally touched the customer (the “front office”) with those that were never allowed to—or at least supposed to (the “back office”)? Shouldn’t we try to engage our customers in product development? Engineering? Service plans and operations? Marketing? Pricing options? My POV: While traditional systems reinforce the notion that only the privileged few get to interact with customers—and while that might be convenient for us internally—today’s socially powered consumers want access beyond the sales team. The question is, are you able—and willing—to grant that essential access?
5) Future-Proof Your IT Architecture. Think back just three years to the state of your business and the state of your IT strategy: the cloud was still mostly conceptual or isolated out on the fringes, social was a minor but persistent irritation, Big Data was mostly an egghead conversation and not likely to get beyond that, “engagement” was something you hoped your daughter would not get into with her goofy boyfriend, business analytics was all taken care of by a big team of specialists serving a small team of executives, and the iPad was still blessedly nothing but a rumor. The CFO badgered you every month about your endless demands for more real estate in which to put endlessly growing racks of servers requiring endlessly growing volumes of electricity and air conditioning, but what else could you do? The data explosion required a parallel explosion infrastructure growth, right? But the physics and the finances of such an approach no longer work, and the new business demands of today must surely be met with more-innovative tools tomorrow.My POV: Businesses need fresh thinking about the architecture of tomorrow because merely rehabbing or adding on to the existing plan will simply not meet the wildly different and more-demanding requirements of tomorrow. Cloud, social, mobile, engagement, Big Vision (formerly Big Data), and a greatly accelerated pace and scale of global business require modern apps, optimized systems, fault-tolerance, full support across cloud and on-premise and a mix of both, and built-in BI and social capabilities.
6) Upgrade “Cloud Strategy” to “Business Transformation Enabled by the Cloud.” Without question, CIOs must have detailed strategies and plans for cloud computing and many already have those in place (to those of you who don’t, well, did you ever get that high-school teaching certificate?). But the strategic CIO will use the next several months to collaborate with the CEO in upgrading that tech-centric plan into a broader vision for a sweeping business transformation of the entire enterprise. If you’re still viewing your cloud strategy based on a tech-driven plan written a year or two ago—before the ascendancy of social, customer engagement, Big Data, and business analytics—you’re going to miss the boat. My POV: Cloud projects will not be judged on their technical merits or on hitting their go-live dates, but rather by how deeply they impact essential business-transformation initiatives, and by how much business value and opportunity they unlocked. In the process, CIOs will segment themselves into two groups: IT leaders who focus solely on the tech aspects of cloud deployments, and business leaders who ensure that cloud projects are conceived and executed in the service of customers, business execution, and engagement.
7) Transform Big Data into Big Insights, Big Vision, and Big Opportunities. In the past year or so, much of the talk about Big Data has obscured the fact that the real issue is enabling intelligent and instantaneous analysis to provide optimal insights for business decisions. CIOs need to ensure they’re looking at these high-volume, high-velocity challenges in the right way: as business enablers, not tech projects. For example: What if you could enable dynamic pricing of your company’s products around the globe? What if you could perform fraud-detection analytics across all of your transactions in real time, instead of across just a random sampling of only a few percent of all those transactions? What if you could analyze three years’ worth of customer data in minutes, rather than only the past three months in hours? In the meantime, we can be certain that the scale and speed of this current challenge will only increase as CIOs must rapidly and seamlessly enhance their traditional corporate data with vast new streams of social and mobile data to realize the full potential of these strategic Big Opportunities.My POV: Some forecasts say the CMO will soon be calling the shots for IT; while I don’t buy into that, I do agree that CIOs who choose to sit back and wait for “the business” to tell them what to do will end up reporting to the CMO within a year or two. But companies will fare much better if their CIOs eagerly and rapidly begin framing Big Data challenges and opportunities in terms of customers, opportunities, revenue, and business value.
8) Preside over a Shotgun Wedding: Systems of Record Marry Systems of Engagement. Your traditional back-end systems might be sturdy and proven workhorses but they’re simply not equipped to handle the vast new streams of data and information from social, video, Customer Experience, and more. Conversely, while those new engagement tools and solutions are fabulous gateways into the real-time wants and needs of customers and employees, they lack the historical and institutional breadth and knowledge of your trusty ERP systems. The strategic CIO will find new approaches and/or solutions to rapidly and seamlessly tie these separate worlds together. This strategic integration will become the cornerstone of the Opportunity Chain described above in #3, and also of the consolidation of the archaic front office and back office into the modern Customer Office as described in #4. My POV: This union of social/mobile with transactional capabilities will give companies a new way to move at the speed of their customers, new methods for engaging with customers to build multifaceted relationships rather than linear transactions, and the ability to avoid getting stuck in the tar pit of siloed systems designed to meet internal requirements rather than enable the co-creation of value with customers.
9) Lead with Speed: CIO as Chief Acceleration Officer. I first suggested this aspirational model about 18 months ago when I wrote the following http://www.informationweek.com/global-cio/interviews/global-cio-my-farewell-column-10-big-thi/229300888?pgno=2 , and the rationale for the CIO to function as chief corporate accelerant is even more true today: “If you could promise your CEO that you could shorten product-development times, reduce days-of-inventory turns, accelerate deliveries to customers, cut or eliminate the wait-times customers endure on your support lines, and shorten your order-to-cash cycle, is there a CEO on planet Earth who wouldn’t idolize you? So why not embrace that as a new mission for your IT organization and think of what you do as being the Chief Acceleration Officer, the exec who leads the company’s efforts to do everything it does not just better but faster? Give the gift of speed, and see if anyone in your company or among your customers wants to return it.” My POV: While I’m surely not proposing that title as an official thing, businesses in every industry will find in 2013 that, more than ever before, speed kills—the only question will be whether your company’s going to be the victim or the perp.
10) Bend the Value Curve: More Innovation, Less Integration. For the past 30 or so years, tech vendors have generally introduced streams of new products that were not only increasingly more powerful and capable, but also increasingly more complex, requiring ever-greater volumes of integration, testing, tuning, modifying, patching, upgrading, monitoring, etc., etc. Back when viable alternatives weren’t available, that was an okay model—IT teams specialized in stringing together piece-parts from hundreds of vendors and somehow managed to figure out ways to make it all work together. But today, that model is ready to begin making the transition over to the Computer Museum. Customer-side CEOs in particular are growing increasingly fed up with the apparent black arts of IT operations that require larger and larger budgets without predictably delivering more and more business value. For CIOs, the answer is simple—not easy, but simple: they need to begin rapidly withdrawing themselves and their business-technology teams from the integration business and begin devoting more and more of their time to growth-oriented and customer-centric innovation. In the past few years, a handful of IT vendors have begun offering a new breed of engineered systems or optimized systems designed to offer pre-bundled and pre-tested purpose-built machines that free customers from the drudgery of endless integration busywork. Oracle led the way at the high end with Exadata, Exalytics, and Exalogic, and Apple’s iPhone is on its way to becoming a $100-billion example of the core concept: more innovation and less innovation. IBM followed Oracle’s lead a few months back with its Pure Systems, and even Microsoft CEO Steve Ballmer, in introducing the new Surface tablet, said it was time for Microsoft to try to optimize the hardware/software interactions.My POV: While not the answer (yet) for every question, engineered systems give strategic CIOs considerable latitude to devote more people and energy toward innovative customer-facing initiatives, and simultaneously alleviate the need for CIOs to pour so many budget dollars into low-value integration work that generates little or no competitive advantage.
So there’s my list of priorities for the strategic CIO—how about sharing yours, along with your feedback on the list above?
Authored by and reproduced with full permission of Bob Evans, Senior Vice President, Communications at Oracle