This is the post I never considered I’d be writing when back in 2006 Ron Tolido and I started the CTO blog. Now more than 300 posts later, and with the help of great support from those who have been kind enough to read and comment, I am writing my last post as the global CTO of Capgemini.
At 62 years of age, and with my family needing more of my time, sadly it’s come to a time to retire, and leave the way clear for my younger colleagues. Personally I think it’s a good time for a new generation of younger colleagues to bring fresh thinking and indeed new understanding, to the new generation of technology and business use. I will of course continue to follow their thoughts and blogs.
Traditionally a final report, speech, and I guess that includes a blog too, is to provide a look back and summary over the past. I am not so sure that’s the right direction to be looking: with the current time, we have such an exciting social, society, business, and economy emerging, with technology at its heart. Still, there are some, hard, learnt lessons from the business adoption of the last major disruptive wave (that of the PC, networks, client-server architecture with the resulting innovation in business models around Business Process Re-engineering delivered by ERP).
These are worth replaying into this latest disruptive wave.
Valuable Perspectives that Align Remarkably Well to Current, New Challenges
This point came up in a recent interview with InfoWorld illustrating the very recognizable concern of CIOs of being marginalized or, even bypassed by the necessary rush of the business management to adopt and deploy new technologies. Why do I say ‘necessary’? Because technology is back to being a competitive differentiator again with first movers able to take huge market advantages, while lagging too far behind could be potentially fatal.
3 interesting comments summarize this:
1) Over the past decade (1997-2007), 14 of the 19 entrants into the Fortune 500 owed their success to business model innovations (based on new technologies).
2) ‘In today’s competitive economy there are more suppliers than buyers and you better figure out how to delight your customers, quickly’. A quote from Mark Hurd’s when introducing Oracle’s strategy regarding front office activities with customers and new technologies.
3) ‘The business is competing in the 21st century, whilst IT is managing the technology of the 20th century, and many business processes are from the 19th century’. A quote from Capgemini colleague Rick Mans
The Basis of the ‘Belief’ that Technology is a Competitive Differentiator
It was the same back in the early 1990s winners applied the new technologies to transform their internal operating capabilities. They competed on grounds of their operational efficiency, costs, and the resulting effectiveness in the market to differentiate themselves. They held the ‘belief’ that technology was a differentiating factor.
Why do I say belief? Because midstream IT is core to any enterprise staying in business and must be done flawlessly. But in achieving this position IT has lost much, if not nearly all, of its true ability to differentiate externally in market competitiveness in winning customers. Internally, and in particular, with operational excellence and the impact on profitability, IT remains central and core, which is why IT tends to fall under the CFO at board level.
The technologies business managers use to change their competiveness in winning and maintaining customers are different. All based on the development of external capabilities. There are very different measurements for success around creating increased revenues, new products, gaining and retaining customers, but not for the IT metrics of cost.
So New Key Criteria is Needed but for whom?
The CEO, the marketing director, or the sales director, are likelier roles than the CFO. And there is the challenge. The whole role of the IT department, including the CIO, in the enterprise with the resulting policies and metrics are designed to support the internal operations. This is distinctly not the same objective as the new uses of technology and its application to new areas of the business.
Twenty years ago, theDataCentermanager faced a similar challenge. Mainframes and mini computers, and their associated business use, shifted into something new under the disruptive impact of PCs and their associated technologies. Innovation in business models demanded new capabilities and skills in order to achieve ‘flow process across enterprises’ based on one common data model. Some data center managers rose to the opportunity and became CIOs. Sadly many continued to be hostile to the change citing ‘good’ objections based on their experiences with the data center operating model. Data centers and the principles of good operations of mainframes, and indeed servers, haven’t gone away and remain a critical part of the IT department. But they are just that, a part, not the whole, and probably rarely the focus of business strategy for the enterprise.
What is the Role of Technology in the Enterprise?
The real question today, both for the enterprise at CEO and CIO level, is very simple: ‘What is the role of technology in the enterprise today?’ And not, as is frequently asked, ‘What is the role of the IT department?’
The difference lies in what the starting point of the definition is. Is it based on the internally-oriented operating model of IT that’s defined by the limitations, which are necessarily part of this model and its business role? Or will it be a clean sheet of paper to construct a wholly different, externally-oriented model around new business objectives, which are frankly most likely to be defined by the business managers?
Am I arguing against the CIO and the IT department? Not at all!
The lesson of twenty years ago is every bit as relevant today as it was before since both are needed. Above all, they must function in an aligned and contiguous manner to ensure that the fundamental business purpose of sales ends up with the correctly invoiced customers. My point is that CIOs and the IT department cannot stop disruptive technology changes any more than the business managers can. Business managers have to, and are, embracing the new technologies because if they don’t, they, and their business units, will become irrelevant and disappear under the competitive conditions of the market.
The same rules apply to CIOs and IT departments.
My Final Words of Advice…
So, my message is that your colleagues and the enterprise need you to step forward. Use your experience to enable the ‘safe’ adoption of ‘consumer IT’ and empower the business managers to new levels of competitive differentiation by the use of technology. It doesn’t help the enterprise to win against the competition if we believe obstructing change is the answer, even if your reasons are those of genuine concern.
It’s time for change – for all of us!