The Top 10 Strategic CIO Issues For 2014

CIOs have never had such a glorious—and challenging—opportunity to deliver significant, enduring, and transformational business impact and customer value as they do today.

But it’s not a job for the faint of heart. Any CIO pining for a return to the good old days of bonuses based on server-uptime and SLA enforcement should consider swapping out the CIO title for a new one: senior director of infrastructure.

Consider these new paradigm-busting business models that have CIOs’ fingerprints all over them:

• UPMC is a $10-billion health system whose traditional businesses include hospitals and insurance. But its future revenue growth will be largely dependent upon strategic exploitation of information technology, says senior vice president and CIO Dan Drawbaugh.
• As global retailing powerhouse Tesco evolves rapidly and dramatically beyond traditional retail, the priorities of CIO Mike McNamara have shifted “from operations to the customer, from efficiency to customer loyalty, and from cost control to increasing sales.”
• And as manufacturers of consumer goods are racing to find innovative ways to keep pace with relentlessly shifting tastes and desires, Ford Motor is deploying new types of computer-aided design that lets it make large-scale enhancements in days instead of months while costing thousands instead of millions, reports The Wall Street Journal.
• Sensors embedded in soil help agriculture companies deliver optimal blends of nutrients and moisture, cloud computing has morphed rapidly from marginal to mainstream, and the nascent field of in-memory computing will soon bring real-time analytics and decision-making to workers from the factory floor to the C-suite.

The CIO job itself continues to undergo a profound transformation that is pushing business-technology leaders inexorably closer to customer demands and customer experiences and customer engagements; to revenue generation, enhancement, and optimisation; and to sometimes-revolutionary new business models and operating models, and unheard-of new processes.

In that spirit, I’d like to share my list of the Top 10 Strategic CIO Issues for 2014, inspired by conversations with executives at hundreds of companies around the globe. And to ensure that these 10 new ideas are framed in the proper context, please let me first reprise my 2013 list as a means of offering both continuity and broader vision.

Here’s last year’s list: The Top 10 Strategic Issue for 2013

1) Simplify IT and Transform Your Spending: Kick the 80/20 Budget Habit.
2) Lead the Social Revolution: Drive the Social-Enabled Enterprise.
3) Unleash Your Company’s Intelligence: Create the Enterprise-Wide Opportunity Chain.
4) Embrace the Engagement Economy: Merge the Back Office and the Front Office into the Customer Office.
5) Future-Proof Your IT Architecture.
6) Upgrade “Cloud Strategy” to “Business Transformation Enabled by the Cloud.”
7) Transform Big Data into Big Insights, Big Vision, and Big Opportunities.
8) Preside over a Shotgun Wedding: Systems of Record Marry Systems of Engagement.
9) Lead with Speed: CIO as Chief Acceleration Officer.
10) Bend the Value Curve: More Innovation, Less Integration.

For more on each of these trends, here’s a link to the full article exploring them in depth.

The Top 10 Strategic CIO Issues for 2014

1. Your New Job: Drive Customer-Centric Innovation Throughout Your Business. In today’s global consumer-driven economy, the only survivors will be those companies that are able to put the customer at the centre of all their thinking and processes: product design, marketing, distribution, sales experience, user experience, post-sales support and service, and community engagement. The entire Customer Experience model can no longer be simply convenient or efficient for the seller; today, it has to be stimulating and simple and rewarding for the buyer. And while many elements will go into creating that customer-first experience, technology’s the indispensable toolset that holds everything together and delivers the seamless connections customers are demanding. Where does Customer Experience rank on your 2014 priority list? And if it’s not at or near the top of the list, then what is?

2. Why The Internet of Things Will Turn Your Business Upside-Down.  Today, about 8 billion or 9 billion devices are connected to the Internet, and the bulk of those are computers, phones, and tablets. What happens, though, when everything from the multimillion-dollar drills on oil wells to home appliances to pets and medical instruments and light bulbs are infused with intelligence and sensors that blast out vast streams of data? What happens in a few years when, instead of 9 billion interconnected devices all over the planet, we have 25 billion or 30 billion or 40 billion? How does that affect what people buy and how they buy, what companies make and how they make it, where people work and what they do, and how people communicate and what ideas they exchange? Look at how iTunes ripped the music industry apart by displacing a labor-intensive and molecule-intensive and shipping-intensive business model with one based on clicks, electrons, and massively expanded customer choice. Should any of us believe that similar upheavals won’t occur across every industry when we push intelligence and interconnectedness out to the fringes? What about your particular industry, your unique company, your specialised business model—are you and your team working to meet the future and become part of it, or are you hoping perhaps it will for some unknown reason pass you by?

3. Shatter the Legacy Model of IT Budgeting and Expectations. Are you happy with the percentage of your IT budget that’s spent on integration and legacy stuff and keeping the lights on? Are your C-level peers and your CEO happy with the amount of your IT budget you’re able to provide for their innovative and growth-oriented projects? If the answer to either one of those—or both—is no, then you’ve got very little time to find new ways to shatter that 80/20 budget trap, because your competitors will surely get the jump on you. The cloud, engineered systems, and vertical integration all offer great promise in helping you get control over your infrastructure sprawl, begin consolidating brittle and inefficient systems, replace archaic applications, and re-engineer your IT budget to be able to fund more innovation.

4. Dazzle Your Customers: Make Them Love Your Company!  While the number’s dwindling, I’m always surprised at the percentage of CIOs who say it’s not their job to work with customers and to understand their needs and desires as well as their frustrations and concerns.  Today, technology provides the primary means through which our customers experience our companies, our brand value, our culture, and our products and services. Here in 2014, it’s at best short-sighted and at worst madness for a CIO to try to remain detached from up-close and personal engagements with customers.

5. Who’s On First? It’s a Mobile-First, Cloud-First, Social-First World. Do you and your team permit and tolerate social, or do you evangelise it aggressively as a way to drive business value? Is it a necessary evil to be isolated, or is it a breakthrough means by which to understand what the outside world is saying about your company? Is it purely a risk to security and traditional governance, or does it hold the key to new sales opportunities, new engagement models, and greater levels of relevance? How you answer those questions will go a long way toward determining whether you’re still in your job by mid-year.

6. Blending Art and Science: Why Product Development and IT Must Collaborate. Think about item #2 above and the Internet of Things: Is that just a job for the R&D teams and product development, or can you and your IT organisation help infuse your company’s products and services with new software-centred capabilities that create great new experiences for customers and significant new value for your company? Here in the dynamic world of 2014, the IT team cannot allow itself to be pigeon-holed as some back-office support crew; rather, it has to engage with customers to understand what they want and need, engage with product development to share ideas and insights and possibilities, and engage with the entire company to bring alive the right types of information-sharing and processes that lead to more-relevant and more-successful products and experiences.

7. Don’t Fight Tomorrow’s War with Yesterday’s Technologies. We’ve all been hearing about the consumerisation of IT for a few years now—but has that awareness resulted in changes to the experiences your colleagues have with workplace technology? And on the high-end systems side, are you still expecting that those old workhorse servers will be able to handle real-time customer analytics, social-media analysis, growing volumes of video, and staggering volumes of Big Data assets? Or is it time to think of a better way to simplify IT and drive innovation to be able to meet and exceed those new performance needs while also devoting more of your precious IT dollars to growth and innovation?

8. Embrace Your Ultimate Metrics: Customer Loyalty Moves in Front. How are you paid? I don’t mean how much—I mean on what basis? Unless IT organisations  join the customer-first revolution, and do so not just with signs around the office but by putting significant portions of annual compensation on the line, they will continue to be regarded as cost centres primarily concerned with internal processes rather than as front-edge sources of product innovation and customer engagement.

9. Tie Employee Compensation to Knowledge-Worker Productivity. One other key factor that can help change the culture and mindset of traditional IT organisations is linking portions of compensation to knowledge-worker productivity. For the past 10 to 20 years, IT organisations have done a terrific job at raising corporate or departmental productivity, but Oracle CIO Mark Sunday says it’s now time for CIOs to lead and deliver the same types of productivity enhancements for the rapidly expanding knowledge workers within each company.

10) Design and Deliver The Transparent Enterprise. CIOs have the rare and privileged opportunity to see how the entire company’s end-to-end processes work: how materials are sourced, how products are priced, how logistics are managed, how employees are evaluated and rewarded, and how in fact the company works. Or, at times, fails to work: where it gets gummed up, where it misses opportunities, where it overspends, where it under-delivers, where it’s clearly falling behind the competition. And that all leads to a terrific chance for CIOs to work closely with the CEO and CFO to create the transparent enterprise, in which information and insight is democratised so that every employee who needs to know something can get that information without having to work through a week-long queue; where every employee who has a better idea can get it to the right people; where accountability and responsibility are clearly held; and where it’s plain for everyone to see whether the notion of being a customer-centric company is actually happening or whether it’s mostly just a slogan.

Which of the Top 10 CIO issues do you feel is most important?

Full credits and permission to reproduce this post to Bob Evans.