The boundaries between IT and other parts of a business are shifting rapidly. In the past, IT and the CIO focused almost exclusively on infrastructure, computing, and other aspects of the basic technology environment. Today, the increasing growth of technology expertise outside IT in areas like marketing and finance, for example, call into question the CIO role and relationship these groups have with IT.
Recently, I had the honor of moderating a panel at the MIT Sloan CIO Symposium, an annual gathering that discusses strategic issues related to Chief Information Officers. The panel explored the concept of digital business transformation, emphasizing the CIO's role and describing implications for both IT and the business.
The panel included an extraordinary group of leaders, each with his or her own perspective on digital transformation:
- F. Thaddeus Arroyo, Chief Information Officer, AT&T Services, Inc.
- George Westerman, Research Scientist, MIT Center for Digital Business (@gwesterman)
- Robert Tas, Chief Marketing Officer, Pegasystems (@TasRobert)
- Tanya Cordrey, Chief Digital Officer, Guardian News and Media (@tcordrey)
You can listen to the entire panel by clicking the play arrow below:
The panel started with MIT's George Westerman explaining the importance of leadership in digital transformation. He identified a group called "digital masters," which are 26 percent more profitable than similar companies. Although these digital masters are active in areas such as improving customer experience, operations, and business models, George's research points to differences in how this group leads. Despite popular rhetoric about grassroots initiatives, George says they "lead from the top down," using technology to rethink how their business operates.
The Guardian's Tanya Cordrey sees herself as an agent for driving digital change through the entire organization, so that "everyone who can be digital," embraces that transformation. Particularly in media, business models are under attack, so the role of digital has become a means for the Guardian to adapt and thrive despite the changing expectations of readers.
She talks about the need to "hire great people who can work in teams," spread the digital message, and embrace change.
Robert Tas, Chief Marketing Officer for enterprise software vendor Pegasystems, explains that organizations, "need to embrace digital not just in marketing, but through the entire customer journey." He cautions that creating "digital silos" is a risk of many current transformation efforts, as each part of the organization may develop its own plan and set of digital activities.
Like Tanya at The Guardian, Robert emphasizes the importance using a collaborative team to unify systems and make decisions on infrastructure and platforms that will affect people across the company.
Thaddeus Arroyo is the Chief Information for AT&T. In that role, he is responsible for all the company's IT and infrastructure, including the compute and storage fabric used by employees and external partners.
In an interesting move, AT&T aggregated digital functions, embedded previously in sales and marketing, under the CIO. Although the corporate-wide Chief Digital Officer reports to the CIO, the role includes matrixed reporting lines into functional teams across the company.
By 2020, the company wants 80 percent of customer interactions to be digital, and their strategic plan, therefore, takes a holistic approach centered on these interactions. By consolidating digital functions, AT&T hopes to provide a consistent experience across all channels and customers, including business, consumer, mobile, online, and face-to-face in stores.
Thoughts on digital business transformation
This panel brought together four leaders who understand the scope of activities needed to drive digital business transformation. In my weekly CxOTalk conversations with top business executives, three lessons emerge in relation to business transformation.
It's not about technology. Forget the idea that technology saves the day. Although software and platforms enable organizations to collect data, perform analytics, collaborate, and share information, these activities alone will not necessarily induce changes to business models and operations.
Change happens when a business strategy dictates that a company act differently than in the past. Most often, as in the case with The Guardian, external pressure serves as a forcing function that pushes the business to respond, adapt, and change.
You need the right people. Changing a business model or disrupting existing processes is never easy. To succeed, you need people who are ready, willing, and able to embrace change. As George discusses on the panel, leadership at the top must also support the change efforts. The best people understand the existing business, the proposed new model, and the steps needed to get there; they will also evangelize the change, to help peers and colleagues adapt during the transition.
Transformation is not a hobby. Digital transformation requires a strategy and, often, business model shift that rethinks processes to place customers in the center. To avoid the silo problem that Robert Tas raises, recognize that disruption will have tentacles and impacts across the organization. AT&T is thinking years into the future, planning the steps needed to change the company. Your business is probably smaller than AT&T so the transformation effort will take less time. Nonetheless, business change requires sustained effort, energy, and focus for an ongoing period. Half-hearted efforts do not work.