The Big Shift in IT Leadership. Muller Hunter

today's rapidly changing business environments.

      As business becomes more software based, the pace of change accelerates dramatically. “You are either disrupting or being disrupted. Everyone needs to continually reimagine their business and make sure they're delivering real value to their customers,” says Asheem. If they don't, they will be overtaken by more nimble competitors.

      Asheem makes an excellent point. Just look at the S&P 500. In the middle of the twentieth century, companies tended to stay on the S&P 500 for many decades. Today, the average stay on the index has decreased to less than 20 years.2

      The increasingly rapid turnover on major indices like the S&P 500 shows the absolutely incredible impact of technology on the modern economy. From my perspective, the emergence of technology as a key driver of markets, both large and small, plays directly to the strengths of the CIO.

      Asheem's advice is spot-on, and his timing is perfect. This is a great moment for CIOs, and I urged them to seize the opportunity while it lasts.

The Big Shift Embraces and Accepts the Realities of Customer-Centric IT

      I recently spoke with Bask Iyer, a respected IT thought leader and good friend. Bask is CIO and SVP at Juniper Networks, where he oversees technology and business operations for the $4.4 billion company.

      Bask has more than 25 years of experience in global business and IT management, and I value his perspective on the market. He said B2B (business-to-business) companies are coping with rising expectations from customers who have grown accustomed to the kind of user experiences provided by B2C (business-to-consumer) companies. “We believe that every company is a B2C business, even if it doesn't sell directly to the end user. Eventually, what you're selling is used by a consumer. So in that sense, we're all B2Cs.”

      B2B customers now expect the same level of service and reliability they would get from a B2C company. “For example, when you order something from Amazon, you point, click, and pay for it with a credit card. They give you a shipping date, a delivery date, and 99 percent of the time, it's shipped on the date that they promised,” says Bask. “Even if you're not a B2C, people expect you to provide a similar kind of customer experience. If they don't get it, they find another provider.”

      Progressive IT leaders understand the world has changed. Like Bask, they accept the fact that all customers now expect higher levels of service and seamless user experiences. They embrace the new reality of customer-centric IT. From my perspective, it's all part of the big shift – the transformation of IT from an inward-looking technology function to an outward-looking business process that drives and enables real value for the modern enterprise.

CIO Focus Shifts from Creating Internal Productivity to Driving External Value

      I had an excellent conversation with my friend Mike Fitz, vice president of business solutions at Sprint, about the business impact of the big shift in CIO leadership and how the changing focus of IT is helping more companies drive new revenue in competitive markets.

      “The role of the CIO is evolving from an internal focus on employee productivity to an external focus on growing the business,” Mike says. “It's not a total break with the past. CIOs are still interested in helping employees become more productive through better use of technology. That hasn't changed. But what has changed dramatically is that more CIOs are stepping up and using new technology to drive revenue for their companies. That's the big shift, from our perspective.”

      Social media, big data, cloud, and mobile have been game changers. But those newer technologies have also raised the bar, and expectations are now significantly higher than in the past. “Ten or 15 years ago, the CIO could say, ‘Wow, look at how many of our employees have e-mail,’ and it would have been a big deal. Today, it's not such a big deal. The modern CIO has ‘graduated’ from providing technology just for the sake of improved productivity,” Mike says.

      I think that Mike makes an excellent point. The idea of building a business on productivity by itself has become an old-fashioned idea. That's not to say that productivity isn't important – but the modern enterprise relies on more than productivity to achieve long-term business success in competitive markets.

      “That realization has created some great business opportunities for us here at Sprint,” Mike says. “We offer turnkey capabilities that enable CIOs to help employees become more productive. We also offer technologies and services that help companies grow their revenue.”

      From my perspective, the “bifurcated” approach developed by Mike and his team represents a highly logical response to the genuine needs of modern CIOs. It clearly reflects the progression of IT leadership as it evolves from focusing purely on productivity enhancements to focusing more broadly on achieving business results that are aligned with enterprise strategy.

      Mike has captured the essence of the shift in IT leadership. Today's CIO is much more than a technology person engaged in a series of either/or scenarios. The modern CIO operates in full partnership with the C-suite, and is perceived as a valuable source of expert knowledge that is applied primarily to growing the business. Productivity is still important, but generating revenue for the enterprise has become the CIO's preeminent focus.

Competitive Success Is Linked to Collaboration and Innovation

      GE Global Innovation Barometer 2014, issued in mid-2014, reveals a key shift in attitude among top executives. Unlike previous surveys, the new study shows that executives seem ready to take greater risks in the race for competitive advantage. The report is definitely worth reading, and it confirms my informal observations over the past 24 months.

      There's definitely a strong consensus emerging about the critical links between collaboration, innovation, and market success. The report also supports the idea of the big shift, in which companies focus the bulk of their energy and attention on creating excellent experiences for their customers, particularly in highly competitive and rapidly evolving markets.

      “Executives believe that efficient and successful innovation hinges on three factors: understanding customers and anticipating market evolutions (84 %); attracting and retaining the most talented and skilled employees (79 %); and quickly adopting emerging technologies (67 %),” the report states.3

      The report notes that “big data has evolved from a buzzword to an important tool in the innovation process, albeit one that executives recognize poses certain difficulties. While 70 % of businesses see big data as critical to optimize business efficiency, 61 % believe it will be a real challenge to implement. For those who utilize it, 69 % see added value for the innovation process.”4

      Frankly, most of the CIOs and IT leaders I speak with have already invested in some form of advanced analytics that feed on big data sources. Almost everyone I meet is interested in learning more about big data and the technologies around it.

      The report also touches on the potential impact of the Internet of Things (IoT), which GE often refers to as the Industrial Internet, or the concept that anything electronic can be connected to the Internet. Whatever you call it, the phenomenon is growing quickly and will soon become inescapable. Some experts predict that by the end of 2020, the IoT will connect 212 billion “things,” ranging from diesel locomotives and jet engines to thermostats and refrigerators.

      “The Industrial Internet is an emerging concept but positively received, with half agreeing that it will drive innovation success in the future. But only one in four feels prepared to use it,” according to the GE report.

2

For more information, read this short article from MIT Technology Review. Antonio Regalado, “Technology Is Wiping Out Companies Faster than Ever,” MIT Technology Review (September 10, 2013), http://www.technologyreview.com/view/519226/technology-is-wiping-out-companies-faster-than-ever/.

3

Ideas Lab, GE Global Innovation Barometer 2014, © General Electric Company 2014, http://www.ideaslaboratory.com/projects/innovation-barometer-2014/.

4

Ibid.