We are living in a historic era with accelerating market and technology disruptions that impact our lives and rapidly change how we do business. Cloud computing, advanced analytics, and digital technologies have the potential to transform how every company interacts with its customer. So, how do businesses keep up and (better yet) stay ahead? Enter the digital CIO.
A new breed of CIO is emerging to lead companies through technology changes happening at record pace. These leaders are transforming the IT department into a strategic leader and partner.
Meet the Digital CIO
- Digital CIOs are change leaders who accelerate innovation to drive transformational results. According to a recent Gartner Agenda Survey, Digital CIOs expect digital revenues to grow from 16 percent to 37 percent in the next five years.
- Digital CIOs take a customer-centric approach to build new revenue streams, products, services, and business models.
- Digital CIOs establish IT as the central nervous system of the organization through a “digital mindset.” This approach creates greater business alignment, agility, speed, flexibility, cost-effectiveness, customer satisfaction and business value.
- Digital CIOs assess their organization’s ability to lead and execute digital transformation efforts. Armed with this knowledge, Digital CIOs create an IT transformation agenda that bridges gaps required to build new revenue streams, products, services, and business models in their organization.
Is your company ready for digital transformation? These questions are top of mind for every digital CIO:
Is IT strategically aligned with the business vision and strategies?
Digital CIOs align IT with the business. There must be a clear, consistent, and standardized planning process with senior business leaders who jointly drive major technology decisions and insure alignment of key business strategies. Ultimately, the business vision and strategies are translated into a “single master plan” with multi-year IT investment and operating plans.
Do the IT operating model and capabilities enable digital transformation?
Digital CIOs establish an agile, flexible, and collaborative IT operating model with well-established capabilities for their organizations. These capabilities are critical to delivering results on a consistent and repeatable basis:
- Strategic IT alignment
- IT governance
- Architecture management
- Agile solution delivery
Does IT leverage modern application development for speed and agility?
Digital CIOs shift to a modern application development approach, including mobile, human-centered design, agile delivery, cloud computing, DevOps, and API’s with loosely coupled systems. Digital CIOs work closely with business partners to plan and deliver new applications to benefit the customer.
Has the application portfolio been significantly rationalized?
Digital CIOs plan, deliver and support an application portfolio to provide an inventory of the company’s software applications and metrics to show the business benefits of each application. With close to 80 percent of budgets trapped in legacy systems, digital CIOs simplify their application portfolio to fund new digital initiatives, such as cloud-based systems. A recent survey from Roubini ThoughtLab states over 59 percent of digital CIOs plan to use a cloud platform to replace their legacy systems.
How well does IT build strategic business partnerships?
Digital CIOs build credibility as a business leader and partner to support business value for their organizations. Unfortunately, many business stakeholders are skeptical of IT’s ability to deliver results. This misperception could be influenced by past experiences:
- Leading with technology instead of business solutions;
- Partnering with professionals who lack digital transformation experience; or
- Working with a lack of efficient, scalable, and secure infrastructure.
Does IT have the right people in the right seats to drive transformation?
In this digital era, the competition for top talent has never been greater. In order to secure the right talent, Digital CIOs foster a culture of innovation (85 percent), encourage the cross-pollination of digital ideas (79 percent), and reward intrapreneurship (77 percent), according to the recent survey from Roubini ThoughtLab.
Is IT spending inline with industry benchmarks (percent of revenue)?
Digital CIOs improve the cost-effectiveness of IT. Along with application rationalization, digital CIOs leverage global delivery models to capture savings from labor arbitrage. These cost savings are reinvested in digital transformation efforts.
Firms that have reached an advanced stage of digital transformation report an 8.6 percent increase in revenue, an 11.3 percent rise in productivity, and a 6.3 percent improvement in market share. Those that move slowly stand to lose $79 million per billion dollars of revenue a year—and risk falling out of the race altogether, according to the recent survey from Roubini ThoughtLab. With the stakes greater than ever, Digital Transformation is critical. Does your enterprise have the digital leader it needs to guide the way?
Chris Detloff is the executive solutions and strategy lead for business & IT transformation at DMI