CIOs — seduced by the breadth of emerging alternatives and energised by the ever-present drumbeat urging IT to be more innovative — are actively seeking opportunities to apply new technologies. However, the pursuit of these technologies is often only opportunistic, looking for innovative one-off applications of technologies like asset identity, video analysis, or pattern recognition. By implementing these point-solution tech investments, CIOs not only miss strategic business opportunities, they also hinder their companies' business performance by introducing inconsistent customer experiences, increased risk, and vendor lock-in.

Three business trends set the CIOs technology context

But CIOs shouldn't get mired-down in point solutions. Today's emerging technologies can provide a coherent set of building blocks with which CIOs pursue their firms' business strategies. Forrester calls this Smart Computing (read Forrester analysis on Smart Computing): the convergence of tech-driven opportunities resulting in better business execution. When CIOs work with the other business leaders in their firms to strategically apply Smart Computing technologies, their companies are able to succeed at three key business initiatives:

1. Balancing enterprisewide/global synergies against local differentiation

Companies are increasingly looking for enterprise-wide synergies — driven by global competition, customer's demand for consistency, and the ever-present need to control costs. CIOs are helping to define technologies and methodologies to identify common processes, develop common approaches, and monitor and tune them for optimum results.

2. Sourcing business services from everywhere

Pervasive technology use increasingly results in business organisations taking action to source new tech-based business services, frequently without IT's direct control or even involvement — what Forrester calls business technology (BT). CIOs are broadening IT's ability to enable users enterprisewide to source business services from other companies — like sales force automation, rate optimisation, and direct marketing campaigns.

3. Competing in Digital Business Networks (DBNs)

Not only are firms sourcing business services from everywhere, but they are themselves competing as part of DBNs — value chains of functions and firms linked digitally. The ability to apply a business capability like manufacturing for both internal use and external revenues relies on flexible integration technologies.

To develop this strategic business context for IT's emerging-technology strategy, CIOs will need to work with the other business organisations to determine the firm's commitment to enterprisewide synergies, sourcing from everywhere, and DBNs. The difficult work comes in applying the strategy — in using the tech strategy to focus specific investment efforts. To help businesses successfully pursue their emerging tech-strategy, Forrester recommends that CIOs:

Enable BT – help business users succeed when taking action on their own

CIOs moving from IT to BT expand on IT's traditional role of delivering operational excellence, adding capabilities that enable BT success. This includes platforms that support agile sourcing options — like software-as-a-service (SaaS) and business process outsourcing (BPO) — as well as support for Web 2.0 technologies. And underneath it all is a shift in IT's self-concept, from being the company's sole technology supplier to being a business services orchestrator.

Operate IT as a collection of business services — sourced from internal and external clouds

Flexible services sourcing and competing as part of a DBN require that firms be able to manage a changing blend of business services. And to manage this mix — including the flexible interchange of these services — CIOs have to shift IT from serving as a technology supplier to orchestrating business services. This involves IT working with the services chosen by the other business organisations, no matter where the services are sourced. Beyond ongoing development, delivery, and operations, this includes embedding key roles — like business analysts, project managers, and risk managers — in the business organisations, whether these roles continue to report to the CIO or to the business execs.

Manage change with a business architecture — and a business services point of view

Planning for BT and for service orchestration is much more a business activity than a technical one. As a consequence, CIOs have to mature their firms' ability to understand and plan for changes from the business' point of view — whether involving business services sourced internally or externally. But this doesn't mean ceasing IT's traditional infrastructure and development work. These will have to continue to support the business services that IT delivers.

About the author:

Bobby Cameron is a Vice President and Principal Analyst at Forrester Research, where he serves CIOs. He is a leading expert on best practices for IT, including: organisation, governance, IT processes, metrics, strategy, the marketing of IT, and IT/business alignment.