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CIO Notes From The Field: The 2016 GDS CIO Summit

PremiseAs the role of information in business evolves, so must the role of the chief information officer. CIOs must take a digital leadership role, despite the business and career risks.

Markets are forcing, and technology is enabling, global digital business transformation. Customers, armed with simple, mobile access to powerful digital tools for engaging markets, are catalyzing the changes, demanding that brands extend engagement models to include digital mechanisms across channels and interactions. These demands are not limited to B2C relationships. Emerging capabilities, like IoT, are fundamentally altering the B2B engagement models, as well. Of course, these changes are not limited to digital engagement. Digital technologies are impacting all areas of the business.  In mid-April, 2016, nearly 50 CIOs and senior-level IT executives gathered at GDS CIO Summit in Denver, CO, to share insights on:

  • Why does business have to focus on digital innovation? Digital innovation still means many things to many people. At the Summit, CIOs highlighted everything from “paperless transactions” to “multi-channel engagement” as the basis for digital innovation. Perhaps because no consensus emerged regarding the impact of “digital” on enterprises, most didn’t understand how episodic innovation success translated into a cultural capability.
  • How will technology groups have to change to respond? Any company’s response to digital transformation is dependent on its starting position. Generally, CIOs at the Summit agreed that Agile is part of the IT response, but many continue to evaluate how deep to embed Agile into IT practices, given legacy, industry, and other considerations.
  • What will be the CIOs role during and after digital transformation? Enterprises lack digital leadership. Most of the attendees, however, expressed greater comfort in a technology role, focusing on adoption of new technologies and educating the business about technology possibilities. Despite the alignment of digital and information, CIOs remain skittish about taking on the digital mantle for their business.

Why Does Business Have To Focus On Digital Innovation?

Powerful digital tools are opening transformative business possibilities. Big data can provide real insight into customer behaviors, pulling back curtains that limited a business’s visibility into customer patterns across all industries, channels, and geographies. Internet of things (IoT) can exponentially extend an enterprise’s control scope into products, processes, and services, altering business models and the increasingly fluid line between human and machined decision. Evolving software tools are bringing greater speed and flexibility to the challenges of creating next-generation digital applications, making possible the alignment of internal and external development and operations groups into a unified institutional whole.

Despite universal acknowledgement of the possibility of new technology, few attendees have cracked the code on innovation in their organizations. The general concern heard was: we (1) don’t have a governance model for catalyzing, promoting, and guiding innovation; (2) therefore, cannot systematize best practices for surfacing new ideas and appropriately doling out investment; and (3) continue to encounter generational challenges that stem from older employees seeking to sustain control as younger employees seek to play and usurp traditional practices. In general, Wikibon recommends that CIO’s recognize the distinction between inventing and innovating. Invention should be encouraged; CIOs should facilitate the sandboxing of new ideas, especially using lower cost software technologies. However, innovation — the process of diffusing change throughout their organization and especially markets — can be expensive, and requires broad support throughout an organization. Ultimately, this is the basis for the new compact between IT and marketing: Innovating with technology in customer engagement is not a “change management” problem, it’s a marketing problem.

How Will Technology Groups Have To Change To Respond?

In 1968, Melvin Conway wrote that “Any organization that designs a system will inevitably produce a design whose structure is a copy of the organization’s communication structure.” At the CIO Summit, multiple attendees invoked “Conway’s Law” or a derivative during presentations and conversations about IT imperatives during this period of digital change, especially as it related to efforts to introduce and master Agile methods across development, architectural, and operational disciplines. At the heart of the concern rests the IT legacy, in terms of both systems and people, and especially people. Like concerns expressed about digital innovation, many attendees are experiencing significant pushback — much of it generational — regarding the adoption of Agile methods.

Agile has many offshoots, but all Agile-based methods share three features: they are (1) empirical, emphasizing data over gut feel; (2) iterative, focusing teams on well-defined problems that can be solved in specified time periods; and (3) opportunistic, encouraging pursuit of options that shows the most promise given outcomes, and not past investments. The challenge expressed by multiple attendees is that legacy systems are not easily parsed into pieces and successfully treated with Agile methods, especially if large groups of professionals resist the effort. However, multiple Summit presentations pointed a way out of the legacy miasma; multi-mode IT, most argued, is a choice, not a technological fact (see Video 1). IT architecture functions may play a special role in finding the way forward, if they can extend their role into business architecture and customer engagement architecture, and can emerge as lynchpins in the effort to translate business knowledge of customers, markets, and engagement operations into working digital systems.

Video 1. Wikibon’s Brian Gracely discusses Agile development.

What Will Be the CIOs Role During and After the Transformation?

The elephant in the room for much of the CIO Summit was the emerging role of the CIO. Most attendees have mastered their traditional, technology role. A few indicated that they’ve successfully assumed a new, digital role, but most indicated that they haven’t found a clear path to new digital responsibilities. The core problem is this: IT is hard, and as it gets more complex, it gets harder. Many of the CIOs who are making the transition indicated that the general solution, which has to be very carefully thought through, is to move more of IT into the cloud. Even public sector CIOs, who often face additional constraints of having to disclose every facet of every decision, indicated that the cloud — especially public cloud — features prominently in their plans.

Partly, the focus on the cloud stems from the fact that many CIOs still regard themselves as technologists, and the cloud represents new technology. However, most attendees indicated that they believed the cloud was not the ends, but the means, to evolving their organization’s technology capabilities. Once again, however, the people card featured prominently in CIO conversations and sessions: How do we get employees to adopt new approaches to IT that may severely disrupt the employment of those same employees? The only answer? Education and more education, both of business executives and functional professionals, but also IT groups. Indeed, from what we heard at the Summit, the CIO needs to become an educator, as much as anything.

Action Item. The CIO role must evolve with the emergence of digital business. Customers are laying new digital claims on all institutions, which is reshuffling competition and positions across all industries. The GDS CIO Summit calls to action for CIOs are clear: (1) lead digital change; (2) invest in new Agile capabilities; and (3) encourage — ideally, accelerate — business innovation using powerful digital technologies.

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