Digital transformation digs deep into an organization’s ecosystem. New technologies – from socially enabled organizations to the cloud to predictive analytics to embedded sensors – now answer business problems in this brave new world. Digital enterprises need to bridge the language gap between business (strategic goals) and technology (solutions and revenue drivers). CIOs straddle this fence and are thus best able to translate. CIOs also understand best what, where and how new technology can accelerate management innovation and should therefore lead the enterprise in this pursuit.
CIOs must transform, modernize and digitize the status quo. Until recently, a common business goal was to standardize and optimize transactions among units, suppliers, partners and customers to reduce cost and improve efficiency. These turn-of-the-century problems (e.g., EAI, B2Bi) have largely been solved. Today’s landscape looks much different and presents CIOs with unprecedented opportunity to drive revenue as part of their C-suite leadership. This is not an idle assertion. According to studies by Dell, The Economist and Harvard Business Review, economic performance for organizations whose CIOs were part of overall strategy development outpaces that of other organizations by 2-to-1. Within 3 to 5 years, 72% of CIOs will be fluent in the language of business – 200% growth from today.
These figures demand that CIOs align themselves properly in the C-suite to facilitate growth and to translate for C-level peers how emerging technologies, aligned with business goals, can result in new revenue streams. CIOs and their teams understand how digital transformation is changing the business world around them. Predictive analytics, for example, can have huge impacts on global supply chain. Embedded sensors are the new monitors on manufacturing floors; social enables intra-enterprise collaboration and communication with the world. Mobility is revolutionizing the flow of information and work in the field. The CIO has a rich opportunity to analyze these and other technologies to determine which fit best for the enterprise and its strategic goals.
What are a CIOs’ first steps?
First, CIOs and their teams should identify winnable projects and incubate them. These will yield not only success per se, but also the opportunity to explain what was done differently, e.g., the use of the state-of-the-art analytics. Winnable projects should be real-world, revenue-driving digital transformations. They should also allow the CIO to map how digital transformation will spur different future decisions in tandem with strategic business goals.
Second, CIOs must learn the language of business. Without it, they will have minimal influence in the C-suite. If they cannot bridge the gap between business and technology, they will remain stuck in the past. According to Eric Hutto, VP and GM, Dell Services, “the most successful CIOs of the future will be those with business backgrounds who are less likely to become mired in technology.”
Third, CIOs will benefit from including during the digitization process those stakeholders whose strategic goals are being realized. The manner in which digitization works should never be a mystery. On the contrary, transparency is paramount in order for those stakeholders to appreciate how the CIO’s role from strict IT to business strategist is occurring and how it can best be leveraged for future strategy.
There is no choice for career CIOs but to embrace a business leader’s lexicon. It is happening now for nearly one-third of CIOs, and it will soon rise to nearly 75% of us. With risk comes reward, and this shift positions CIOs to have unprecedented influence in the digital enterprise.