Telecommunications, media, manufacturing, retail, utilities, hotels, television, transport, personal and household goods are experiencing a tidal wave of digital disruption. Soon we'll see similar disruption in education, the public sector, healthcare and financial institutions. The implication of digital business is that your company - regardless of industry - will grow increasingly dependent on information technologies to connect with customers, suppliers and employees.
Consider the impact the current digital revolution has had on Kodak, Blockbuster Video, Borders and others. Their failure to adapt to the new digital reality has resulted in their extinction.
As IT leaders, we find ourselves in the middle of these significant changes in history. Many of the assumptions about how technology is developed and deployed need to be relooked. However, the primary role of the CIO hasn't really changed much over the past few decades. Traditionally, CIOs have focused on the back-office processes, with the goal of improving efficiencies and driving down the cost of doing business. That's still the case today. Back-office IT is becoming more and more of a utility, driven by packaged applications and cloud computing. Enterprise IT is being relegated to a mere utility, a provider of commoditised IT services rather than a builder of strategic capability and enterprise differentiation.
Show me the money
There's an emerging group of CIOs breaking away from traditional IT approaches and practices. As the head of Executive Programs for Gartner Africa, I have the privilege of working closely with many CIOs across various industries in South Africa. I've come across a small, but growing number of these breakaway money-making CIOs.
These CIOs are intent on changing the traditional IT back-office focus. The front office is where enterprises differentiate themselves and it's in this area where organisations are challenged to innovate - constantly and with speed. It's in the front office that money-making CIOs look to leverage opportunities and use technology to drive differentiation and generate revenue. These CIOs proactively focus on the front office - the revenue-generating or value-creating activities of the enterprise, like sales, marketing, product development and solution delivery. Money-making CIOs have moved from pursuing 'problem-focused' initiatives towards 'opportunity-focused' initiatives, working 'in' the business rather than 'with' the business.
These CIOs are opportunity-focused, spending much of their time creating new products and services focused on generating revenue.
Many CIOs believe they're doing this already. Their argument is that they create new sources of revenue by supporting the implementation of various business-driven projects. While this is true, money-making CIOs are different. They don't see their role as that of a technology implementer, enabler or even business partner. Instead, they think of themselves as entrepreneurs.
Initiatives
They take responsibility for revenue. They identify new opportunities, create new products and lead revenue-generating projects. Their focus is on building new businesses. They take responsibility for generating revenue and for the returns on these initiatives. These CIOs work in the business and don't merely implement technology for the business. The bottom line: money-making CIOs lead revenue-generation efforts, build new businesses and in so doing disrupt industries.
This shift towards digital business means there can be no more vanilla IT. The more intertwined information and technology becomes in the customer experience, the less appropriate it is to have the same IT as everybody else - even in the same industry. Success in a digital environment requires an information technology capability that can deal with fast-paced, ambiguous, volatile and non-linear business demands.
As industries begin their journey into the digital future, various digital leaders are emerging to lead the charge. Sadly, many CIOs lack courage or are hampered by enterprise leadership and culture to embrace a digital leadership role. Other CIOs will remain too focused on implementing 'best practice' frameworks and fail to reinvent their role and the IT organisation.
CIOs have a huge opportunity to provide digital leadership and drive change. Yes, it takes courage, but who wants to be stuck shaving off another two percent of enterprise costs when you could lead the charge to redefine business? Moving towards this digital future requires that CIOs let go of today. They'll need to shift from investing in olds ways of working, shed past assumptions and begin to adopt more lean and agile practices and technologies. Are you up for the challenge?
First published in the March 2014 issue of ITWeb Brainstorm magazine.
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