There is more pressure than ever on the CIO to capitalise on the escalating digital opportunities for their business. Traditional, well-established business models are increasingly being toppled by more nimble and agile businesses created through digital innovation. In response, European CIOs are spending significantly on the underpinnings of digital commerce, in terms of infrastructure and systems of record, while also leading the way on cutting edge technologies like corporate app stores and SaaS deployments to better engage with and fulfill customer expectations. But, successful provisioning to meet demand is only one element in the intricate evolution of the CIO role in the Age of the Customer.
Forrester believes that career and corporate success will hinge on a CIO’s ability to develop and master three disruptive competencies:
1. Agility in business operations.
Whether you are a B2B or B2C company, digital is poised to invade and disrupt how you do business and also how you win customers. The personal transportation industry is being disrupted by agile mobile technology applications like Uber and Hailo. Both applications use mobile technology to expedite the process of finding a cab and paying the fare. Delivering this service requires business agility processes that incorporate customer and market responsiveness, change management, and digital psychology. With a motto like Hailo's — "two taps and two minutes from tap to taxi" — you can be sure the technology is oriented to serve the customer's needs; instantly.
2. Seize the initiative in driving product and process innovation.
CIOs that develop new business models have started disrupting their industries and delivering significant competitive advantage to their organisations. L'Oréal has stayed on the offensive by employing free and nearly free digital tools to create enterprise social networks. Red Robin, a burger chain in the US, has transformed its internal and externally facing processes by employing digital tools. It has transformed in store experience by using tablets to take orders, serve waiting customers and understand customer patters and used collaboration tools internally for training staff and analysing data from customer interactions. In the process, their CIO also took on the additional role of head of business transformation.
3. Increased customer engagement.
Customers have come to expect that technology should practically be able to read their minds, delivering hyper-personal functionality and content when and where they need it. It's truly the age of the customer, and these customers want all of the brands they do business with to deliver tailored services. CIOs at companies like Xeneta are capitalising on this by using technology to provide detailed freight shipping and pricing quotes to customers. Xeneta's system has broken down the transparency barriers traditionally associated with freight pricing and helped customer get what they need, when they need it.
Effective management across these three competencies will be a complex undertaking for any CIO. It will require clarity in roles, ownership, and operations. The role of a European CIO will vary, depending on their organisation's context. At Forrester, we have boiled down the essential functions and responsibilities of a disruptive CIO into three roles: soldier, captain, and general.
These roles can change based on types of initiatives, culture of the company, and relationships among business and technology leaders. It is plausible that a CIO is a general in one initiative and a soldier in another, but most would default to one of the three roles described below.
- A “soldier” CIO must ensure reliable consistent experience by focusing on execution. Soldiers are primarily order takers focused on executing the order. They offer technology mastery and project management. Soldiers focus on delivering consistent, reliable technology to their organisations. CIOs find themselves fulfilling the soldier role when a technology is brought to the IT department's attention and requires implementation, upkeep, and monitoring.
- A “captain” CIO contributes directly to business outcomes by excelling at collaboration. Captains are essential stakeholders, responsible for contributing to business outcomes. The captain works closely with one or more business leaders to develop and deliver business outcomes. CIOs tend to play the captain role in situations where they are aligned with business units on a technology solution from start to finish.
- A “general” CIO is a change agent that leads the digital disruption. With some digital innovations, the CIO will be front and centre, running the show. Generals are change agents focused on initiating and leading their organisations to capitalise on digital disruption — changing the existing paradigms and perspectives and truly becoming a business leader instead of a technology leader. CIOs fit into the role of general when they are involved in the inception of ideas around innovation and disruption.
Based on information gathered through interviews for this research, hundreds of client inquiries on this topic, and many advisory sessions with CIOs, Forrester estimates that today, 60% of CIOs today are soldiers, 30% are captains, and 10% are generals. As digital innovations and disruptions continue to penetrate more industries, the percentage of captains and generals will increase as CIO expectations change over time. By 2018, demanding customers and new technologies will have significantly altered the CIO's current role. Expect the distribution of CIOs identifying as soldiers, captains, and generals to change as well. Forrester estimates that by 2018, 30% of CIOs will identify as soldiers, 50% as captains, and 20% as generals.
A disruptive CIO will be at the centre of business transformation
The soldier, captain, and general will all have one thing in common: comfort with innovation and disruption. They offer innovative solutions to a (frequently unrecognised) problem. They excel at identifying and implementing disruptive innovations no matter what role they find themselves playing.
The soldier combines technology in unique ways to solve business challenges. One CIO told us that he sees his IT department as serving a "hierarchy of propositions". At the base level, IT focuses on infrastructure and apps as tools to get work done efficiently. But to gain competitive advantage and disrupt the market, IT focuses on re-engineering business processes. The most effective soldiers will help re-evaluate existing technology management processes and come up with innovative combinations of technology that solve business problems better, faster, or cheaper.
The captain pulls together people, processes, and capabilities. Not only do captains pre-empt and identify customer needs, they figure out how to deliver solutions collaboratively to the market with speed and flexibility — and thereafter facilitate this collaboration. Captains stay current with the demands of both the customer and the business and orchestrate solutions that meet the needs of both parties.
The general builds something completely new and disrupts the status quo to the benefit of the business. A CIO who isn’t afraid to take a leap of faith and implement a new, innovative technology or advocate for an alternative way of doing things — not motivated purely by cost savings — will find herself playing the role of the general; at the very cutting edge of innovation and disruption.
Seizing the initiative and leading the organisations of today into a successful digital future will demonstrate just which CIO has the General’s baton tucked away in her knapsack.
Step up to the challenge or get ready to be disrupted.
Alastair Behenna is principal analyst at Forrester Research where he serves CIOs in Europe.