Another year is upon us, even as many of us still seek to complete our digital priorities from 2014. For most CEOs and COOs — and especially CIOs/CDOs — 2015 will be a particularly interesting one as it’s largely a transition year for enterprise tech, making it challenging to jump to the next wave of innovations, often without yet being able to declare success with the previous ones. However, technology change waits for no company, and the pace of evolution continues to pick up.
For many of us, this means realization of the last major round of must-have enterprise technology priorities is still underway, yet well beyond the starting point in our organizations. However, despite the next generation of technology advances being rather immature (examples: Internet of Things, the Collaborative Economy, next-gen AI, wearables, and other emerging enterprise tech) they have also become increasingly difficult to ignore, as the latest technologies are often even more filled with business potential, and yes, disruption too.
This means mobile, social (internal and external), BYOT, digital lines of business, and data-driven business processes ala big data now have strong presence as major initiatives in most organizations, but largely are still in the process of finding their way in terms of delivering their value and impact.
Seeking Better Strategies for Digital Adoption
In our discussions with senior business and technology leaders in the last year, it has become clear that digital change in most companies is simply happening too slowly. Many are actually falling behind. There is now a growing focus to find more effective models for adoption and transformation to digital and its numerous supporting business models. Even as the traditional model of IT has delivered great value to our organizations over the last decade, it’s also obvious to the casual observer that it’s now struggling under the strain of pervasive tech change. Other causes include changing demographics and market expectations of organizations who now broadly seek to a faster move to new technology than the typical IT department can presently support.
This mismatch of demand and supply in internal IT ecosystems has therefore become one of the top issues facing executive teams today. Even worse, despite demand, IT budgets are not growing nearly fast enough to support the pace that business units currently seek. Even were the budgets were made available, it’s fairly evident that IT organizations would apply the resources in the same manner that’s often failing to keep up with demand.
So what’s the core issue here? Specifically, it’s that the traditional model of IT imposes far too high a burden on acquiring and supporting new technology compared to newer models (the old model nearly doubles TCO according to data, while not taking into account longer times to market too) and it’s under active disruption by the cloud and consumer technology both. Fortunately, senior leaders are one of the few in an actual position to address this as a top-line imperative. The data also shows where they think the future is as they increasingly putting tech spending outside of the traditional IT purview.
The C-Suite Must Create Conditions for Successful Digital Transition
In 2015 we see that organizations, while continuing to sustain investment on the existing rounds of digital initiatives, will also be seeking new structures and processes for better adapting themselves to the digital future. In recent years, this has meant adopting agile methods in both business and software development, new collaborative technologies, and more recently with shifts to devops and the rise of the eponymous Center of Excellence model, tactically and strategically to improve collaboration, knowledge sharing, speed, and velocity within the very process of tech adoption itself.
So while the emerging technology maps for the large enterprise are fairly well-understood and straightforward, with typical examples from Gartner or our view, what’s increasingly sought out are the specific changes we must make to the way we assimilate and metabolize new technologies, supporting skills, and perhaps most importantly, their underlying mindsets. This latter point cannot be taken too lightly: Many of today’s most powerful technologies have relatively modest value if the organization doesn’t have the lens through which to understand them or the necessary inclinations of behavior to take advantage of them.
Recent “revolutionary” advances such as social business, which are equally tied to both technology and corporate culture, are particularly profound in terms of the results they produce, but only for a much smaller subset of organizations that are able to successfully address both the technology and human dimensions of change. Does this mean organizations are going to make another major reinvestment in change management in 2015? Not likely, as large strategic initiatives remain generally out of favor.
Instead of traditional change programs, we now see organizations actively experimenting with much closer and more integrated relationships with their technology stakeholders. Case example: Houghton-Mifflin-Harcourt’s CIO Brook Colangelo did exactly this to turn the IT department around and meet internal needs through better stakeholder-centric engagement.
We would note that today’s stakeholder engagement is different than just listening to customer. The specific approach emerging is one where digital possibilities are emphasized, and obstacles lined up to be overcome, through a process of co-creation. Leading organizations are moving from a stance of technology constraint (the proverbial “Dr. No”) to one of broad enablement. Leaders here are now designing new vehicles for identifying, piloting, and incorporating technology in the organization that are intended to a) result in fewer silos and shorter project backlogs, b) solutions that fit better to local business needs, and c) reduce support and other overhead from central IT resources while still staying secure and compliant. In other words going beyond ‘bolt-on’ digital transformation.
This then is the real digital mandate for 2015 for C-level executives: Reconcile the rate of tech change happening outside the organization to the rate of change inside.
This is becoming the largest impedance to success for a growing number of companies, and research increasingly shows addressing this gap has become a matter of corporate survival, not just the achievement of more optimal business results.
What’s more, an emphasis on the biggest obstacle to digital improvement and transformation gives senior leaders a powerful and broad enough perspective that sets free technology managers and lines of business to focus on the specific digital opportunities in the context of the business, while letting C-level leaders focus overall on creating a more effective and responsive environment for digital change enterprise-wide. From a leadership standpoint, spending precious executive time on fostering an enabling digital change environment — such as shifting some corporate hierarchies over to more network-based models — is likely to produce the most results by unblocking bottlenecks in scale and creating the conditions for deep, more sustained, and more impactful corporate evolution in the digital age.
Four Digital Priorities for the C-Suite in 2015
So, besides the relevant new technologies themselves, what then should the C-Suite digital priorities be for 2015?
Opportunity plan & customer needs map over technology roadmap. Traditional IT is still often led by a technology roadmap instead of focusing most on business needs and newly emerged opportunities. Leaders still need both views to make sense of the way forward, but the most important roadmap C-level executives should be requesting is what digital opportunities and internal/external unmet needs exist, along with a specific roadmap to achieve them. The enterprise technology roadmap should then be cross-checked and adjusted to support these.
Cultivate business-led & customer-led change. Build communities of internal and external customers, engage them, listen to them, co-prioritize, and then actively enlist them in helping realize the changes. Put what’s learned on the roadmap. Repeat.
Experimentation with and selection of improved digital org structures and processes. Since tomorrow’s IT doesn’t appear to look a whole lot like today’s IT, leaders must find the updated models that work best for their organization. Never mind that technology is diffusing across many more roles (the CMO, CFO, CDO, CCO, etc.), for now, technology is still largely centralized. This means actively exploring digital incubators, devops, centers of excellence, or a fast emerging new model that we are calling the Network of Excellence, and which we’ll explore more shortly. This is where the rubber meets the road when it comes to finding ways to more rapidly create technical and cultural change widely across an organization. Senior leadership cannot miss the opportunity to find the way forward to adapting to today’s digital changes and dynamic rhythms.
The proactive scaling of digital enablement and support. In our explorations of what is beyond the CIO and CMO when it comes to technology enablement, one thing is clear: Now is the time to be a digital revolutionary. But only with the appropriate safety net. Digital enablement means making other people’s IT secure and compliant as automatically and cost-effectively as possible. With the number and profile of today’s IT security incidents reaching all time highs, cybersecurity has become a top priority in most organizations as the impact goes all the way up to the boardroom and global markets. But the lens of cybersecurity is relatively myopic, leading to focusing on risk instead of opportunity. Thus perhaps the top digital priority for C-level leadership this year is to balance security and risk with opportunity and change. Too much of one or the other can lead the truly harmful outcomes either way. Your technology leadership can broadly provide enablement services and tools (everything from app stores and open APIs to digital ambassador programs and customer communities), while cybersecurity teams must be given the mandate to support them in a highly integral fashion.
A Shift to Today’s Digital Power Values
The lesson of 2014 is that many exciting emerging technologies are coming in 2015, in fact too many, and the rate of tech change in the enterprise is too slow. 2015 will be the year that we begin redesigning our technology functions to be more decentralized, established higher transformation capacity through networks and emergence, be more responsive to stakeholder needs through engagement, and in general seek out and embody the new digital power values below (even though the old ones also won’t totally disappear.)