Today, no business can ignore technology's impact. The combination of cloud, mobile, data analytics and social media – what IDC has dubbed the 'third platform' – is driving the growth of many new enterprises.
For organisations founded before the digital age, they need to adapt and transform as they move to the cloud, use data analytics and manage social media. It is this ‘third platform’, as IDC has dubbed it, that is driving a growing need for IT leaders who understand both technology and their business, and can guide their organisations through the new digital landscape.
The CIO is at the vanguard of many of these changes, helping to convert their business from an ‘analogue’ structure to digital. According to research conducted by IDC, in partnership with Canon, 82 per cent of Australian mid-sized organisations have already started their digital transformation journey. Across Asia-Pacific, this sees an average of 58 per cent of the CIO office’s share of wallet currently spent on IT ops and governance, with 23 per cent spent on innovation, according to IDC’s 2015 C-suite Barometer.
William Confalonieri, CIO and chief digital officer at Deakin University, says it is crucial not to think of IT as merely a utility. “The IT function has become a part of the DNA of digital business strategies, [and it] has the potential of becoming the transformational force guiding organisations through unfamiliar digital landscapes.”
Confalonieri points to bleeding-edge technologies including virtual reality (VR), artificial intelligence (AI) and the Internet of Things as heralding an age of more intimate digital relationships, productive collaboration and highly responsive “event-oriented architectures” that can “prompt emotions and win the minds and hearts of audiences through delightful digital experiences”.
“I believe that ‘IT’ and ‘CIO’ are not properly representing the dimensions of the discipline,” Confalonieri says. “I don’t draw a line, and I try to holistically manage the dimensional aspects: from operational through tactical to strategic on one dimension, and then the experiential, business enablement, personal productivity and core infrastructure aspects of the discipline on the other.”
Selling the value of innovation
As line-of-business and the CIO compete for a bigger share of the IT budget – currently 40 and 60 per cent respectively in Australia/NZ, according to IDC – it’s the CIO’s job to convince other C-suite leaders that technology-driven changes are worth the investment.
Confalonieri believes that any organisation needing convincing of the value and power of digital transformation faces a problematic future. “In any mature futureproof organisation, the business calls on the IT function to be its innovation engine – agile, hyperaware, predictive and bold – to help it adapt to new market expectations.
“The challenge could become how to manage different priorities with always-limited resources, and that should be a collaborative exercise across all business areas.”
This also requires having a CIO who is involved in hiring and developing smart, adaptable and skilled people, fostering a culture of consultation and commitment, nurturing creativity through experimentation and implementing efficient, innovative and elegant technology ecosystems. Confalonieri also highlights the importance of having an inspiring vision and strategy, along with strong transparency and shared governance.
As organisations become more global, offshore their IT operations and adopt a ‘cloud first’ strategy, Confalonieri says today’s CIO must focus on the tectonic shifts that are happening right now – not just what the next five to 10 years might bring.
“Digital requires new thinking, and new thinking usually doesn’t come naturally. Our learning and instincts might deceive us as they have operated for so long under a different paradigm.”
This includes how we think about information, says Confalonieri. He says many organisations structure their information and digital content around the departments that manage them, rather than how their customers think. The result can be a siloed information architecture that focuses on functional rather than organisational performance.
Governance arrangements, key performance indicators, and many controls and incentives also usually follow vertical structures, says Confalonieri. Functional delivery is considered a high priority, but it comes at the expense of a holistic customer experience.
Successful digital transformation, says Confalonieri, comes from taking a philosophical approach – not merely a technological one. “In today’s market we see old-paradigm organisations and CIOs, and new paradigm ones. The ones that are not transitioning will have a complex future.”
To find out more about how digital transformation is set to impact your organisation or enterprise, download our free white paper, 2020: The future of ICT