The Digital Enterprise: CIO perspectives

The Digital Enterprise: CIO perspectivesMay 2014

Neil Ward-Dutton

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Free report

Table of Contentspage page page page

Towards the Digital Enterprise

How CIOs see things

About the survey Your next steps

2© MWD Advisors 2014

3 8 23 25

Towards the Digital EnterpriseWhether we know it or not, Digital technologies are changing our customers’ and stakeholders’ expectations; changing the art of the possible in business; and changing every commercial organisation’s competitive landscape. A proactive and strategic embrace of Digital technologies throughout an organisation, in order to counter competitive headwinds and meet market expectations, is what the ‘Digital Enterprise shift’ is all about.

Hyper-connectivity drives customer expectations

We live in a world where information and communications technology is arguably the most potent force driving change.

At the core of what’s happening is the proliferation of connections between people, organisations and goods and services, and the spread of ideas and expectations. From a business perspective, unpredictability is the outcome we all need to get our heads around.

The accelerating global spread of ideas and expectations means that attempting to create a competitive position based purely on the price of goods or services that you offer, or on product features and functions, is increasingly difficult.

Delivering sustainable competitive differentiation has to be about more than products and price – it has to also be about aiming to deliver the best possible experience to each customer. 4© MWD Advisors 2014

Digital expectations, digital disruptors

Large organisations in particular are becoming orchestrators of many disparate third-party capabilities; but great customer experiences have to be integrated. Customers expect experiences that are joined up across multiple online channels, and that are personalised to their preferences.

Competing on customer experiences has never been more challenging, because new digital-native players are busy disrupting industries of all kinds – from hospitality and transport (Airbnb, Lyft, Uber) to financial services (Zopa, Kickstarter).

With no legacy infrastructure to hold them back, these digital natives are moving at speeds most large companies can scarcely dream of.

To compete more effectively, established organisations have to be prepared to make the shift to a Digital Enterprise operating model.


What is a Digital Enterprise?

The vast majority of organisations large and small are already ‘digital’ to some extent – they use digital technologies to help with administrative work, communicate internally and externally, present their businesses to customers through websites, and so on.

However, a Digital Enterprise takes a ‘digital-first’ approach – encouraging pervasive use of digital technologies to conduct, manage and govern business activities.

This shift is currently being accelerated by cloud, social, mobile and big data technology trends, as well as the deep adoption of these trends by new, disruptive online businesses.

A Digital Enterprise is a business in which digital technologies are strategically exploited to maximise global effectiveness, efficiency and responsiveness. Digital technologies power the co-ordination of work, the creation and use of operational and management insights, and the sharing of knowledge – at scale, across boundaries, and in a highly integrated way.

Connect to your markets

Deliver your products and

services

Manage your business

CLOUD – SOCIAL – MOBILE – BIG DATA / ANALYTICS


Ingredients and enablers

A Digital Enterprise shift can have many starting points and undoubtedly has many enablers and ingredients. We’re particularly interested in exploring this set of 12 ingredients and enablers.

Connected products and infrastructureTaking advantage of ‘Internet of Things’ possibilities

Multi-channel customer and multi-channel partner and supplier interactionsCustomer, partner and supplier experiences that work seamlessly across online channels, including mobile and social

Cloud-based services and resourcesEnabling you to fast-track development and change of capabilities and services

Open dataOffering your own business data, e.g. aggregated usage or customer data, online as a service to others

Real-time analyticsUsing predictive models and rules to make recommendations, e.g. in sales or customer service roles or to drive dynamic offers or pricing

Social collaboration platformsTo drive better knowledge sharing and task co-ordination, whether internally or externally

BPM and Case ManagementEnabling you to get critical work that spans individuals and teams done more effectively, and measure it better

IT Governance, Enterprise Architecture, Portfolio ManagementHelping to direct and shape technology investments within fast-changing environments

Design thinkingTaking an ‘outside-in’ approach to designing business services that starts with customer personas and journeys

Data literacyEducating employees about the value of data and tools that can be used to explore and manage it appropriately

CIOs as Digital leadersEmbracing Digital disruption as well as ‘keeping the lights on’


How CIOs see thingsIn a study carried out in the first quarter of 2014, we asked a group of IT leaders about their current Digital Enterprise capabilities, their investment priorities and drivers, and the factors holding them back.

Investment priorities and maturity

Across the board, our group of IT leaders feel they have more work to do.

Four areas show a particularly significant gap between current capability and investment priority: multi-channel customer interactions; the CIO becoming responsible for Digital strategies; real-time analytics; and open data (though this last factor was cited as being the lowest priority overall by the group).

Open data

Data literacy

Design thinking

BPM and Case Management

Multi-channel partner interactions

Social collaboration platforms

Real-time analytics

Connected products and infrastructure

The CIO becoming responsible for Digital strategies

Cloud-based services and resources

IT Governance, EA and Portfolio Management

Multi-channel customer interactions

0.0 1.0 2.0 3.0 4.0 5.0

Maturity Priority


Retain employees

N/A

Improve risk mgt

Match competitors

Increase profit

Drive innovation

Improve flexibility

Increase efficiency

0% 10% 20% 30% 40% 50% 60%

0%

7%

10%

22%

22%

29%

34%

49%Connected products and infrastructure

Over the following pages we show how our group sees the value of each of the 12 Digital Enterprise enablers/ingredients.

Creating connected products and infrastructure is seen by our group principally as an opportunity to increase business efficiency (49%), with 34% citing flexibility as the driver and only 29% citing innovation.


Retain employees

Improve risk mgt

N/A

Improve flexibility

Increase efficiency

Match competitors

Drive innovation

Increase profit

0% 5% 10% 15% 20% 25% 30% 35% 40% 45% 50%

2%

7%

10%

22%

24%

24%

37%

44%Multi-channel customer interactions

Supporting multi-channel customer interactions is seen firmly as a profit driver (44% of our group made this association), with 37% linking it to innovation.


Retain employees

Match competitors

Drive innovation

N/A

Increase profit

Improve risk mgt

Improve flexibility

Increase efficiency

0% 5% 10% 15% 20% 25% 30% 35% 40% 45% 50%

2%

10%

15%

17%

27%

32%

32%

44%Multi-channel partner interactions

When it comes to multi-channel partner (as opposed to customer) interactions our group leans much more heavily towards efficiency as being the primary benefit (44%) with 32% citing increased flexibility as a key reason to invest in this area.


Retain employees

N/A

Match competitors

Improve risk mgt

Drive innovation

Increase profit

Improve flexibility

Increase efficiency

0% 10% 20% 30% 40% 50% 60% 70%

2%

5%

7%

17%

24%

32%

46%

66%Use of cloud-based services and resources

Our group strongly endorses use of cloud-based services and resources in order to drive efficiency (66%) and, to a lesser extent, flexibility (46%).


Retain employees

Match competitors

Improve risk mgt

Improve flexibility

Increase profit

Increase efficiency

N/A

Drive innovation

0% 5% 10% 15% 20% 25% 30% 35%

0%

10%

12%

17%

22%

27%

27%

29%Open data initiatives

Creating open data initiatives is something our group is pretty ambivalent about, at least as yet – with 29% seeing this as something that could drive innovation but 27% identifying open data as something that has no direct relevance to them.


Retain employees

N/A

Match competitors

Improve flexibility

Drive innovation

Increase efficiency

Improve risk mgt

Increase profit

0% 5% 10% 15% 20% 25% 30% 35% 40% 45%

0%

10%

12%

29%

34%

37%

37%

39%Real-time analytics

A real-time analytics investment is a Digital Enterprise enabler that our group has a wide and even spread of views about. 39% see the driver as being profit growth; 37% highlight risk management and efficiency; and 34% point to innovation as being a key driver behind investment.


Improve risk mgt

N/A

Increase profit

Match competitors

Retain employees

Increase efficiency

Improve flexibility

Drive innovation

0% 5% 10% 15% 20% 25% 30% 35% 40% 45% 50%

2%

12%

15%

22%

27%

34%

37%

44%Social collaboration platforms

Social collaboration platforms are seen by our group as being primarily about driving innovation (44%), though 37% cite improving flexibility and 34% cite efficiency gains as key reasons to invest.


Match competitors

Retain employees

Drive innovation

Increase profit

Improve flexibility

N/A

Improve risk mgt

Increase efficiency

0% 10% 20% 30% 40% 50% 60%

7%

7%

12%

15%

22%

22%

32%

56%BPM and Case Management

BPM and Case Management investments are clearly seen by our IT leader group as being primarily interesting in order to drive efficiency (56%); but overall, our group showed a fairly weak level of interest in this topic – 22% indicated it wasn’t a current consideration at all.


Match competitors

N/A

Retain employees

Increase profit

Improve flexibility

Drive innovation

Increase efficiency

Improve risk mgt

0% 10% 20% 30% 40% 50% 60% 70% 80%

5%

5%

7%

10%

12%

22%

51%

68%IT Governance, Enterprise Architecture, Portfolio Management

Interest in IT Governance, Enterprise Architecture and Portfolio Management amongst our group quite closely matches interest in BPM and Case Management – with risk management and efficiency the most oft-cited drivers for investment. Here, risk management is highlighted by 68% of our group, and efficiency by 51%.


Retain employees

Match competitors

Improve risk mgt

Increase profit

N/A

Improve flexibility

Increase efficiency

Drive innovation

0% 5% 10% 15% 20% 25% 30% 35% 40% 45% 50%

2%

7%

10%

12%

17%

27%

32%

44%Design Thinking

Investments in Design Thinking initiatives are seen by our group as being primarily about driving innovation (44%), and secondarily about driving efficiency (32%) and improving flexibility (27%).


Match competitors

Retain employees

Improve flexibility

Increase profit

N/A

Drive innovation

Improve risk mgt

Increase efficiency

0% 5% 10% 15% 20% 25% 30% 35% 40% 45%

5%

7%

10%

15%

20%

27%

32%

39%Data literacy

Investing to improve ‘data literacy’ across an organisation is seen by our group as being primarily a way to boost efficiency (39%), improve risk management (32%) and drive innovation (27%). 20% of our group, however, indicate that data literacy is not currently of interest.


Retain employees

N/A

Match competitors

Improve flexibility

Improve risk mgt

Increase profit

Increase efficiency

Drive innovation

0% 10% 20% 30% 40% 50% 60%

15%

17%

20%

24%

29%

29%

44%

51%The CIO driving Digital strategies

When it comes to the CIO becoming responsible for Digital strategies, our IT leader group primarily sees this as being a way to boost innovation (51%), and increase efficiency (44%).


Understanding of what a business case looks like

Availability of funds for investment

Buy-in from budget holders

Co-ordination and availability of resources to work on projects

Understanding of how other businesses are moving ahead

Clarity of our business strategies

0% 20% 40% 60%

29%

34%

37%

51%

56%

56%Moving forward

We also asked our IT leader group what they need to improve in order to be able to move forward with investing in Digital Enterprise capabilities.

The two most common responses were: improving clarity of business strategies (56%) and improving understanding of how other businesses are moving ahead (also 56%). Improving availability of resources to work on projects was also commonly-cited (51%).


About the survey

A survey of IT leaders

In February 2014 we carried out an online survey with a group of 41 CIOs and other IT leaders. Only genuine IT leaders’ responses were counted.

We asked this group questions about their current maturity in different Digital Enterprise enabler/ingredient areas, and their investment priorities among those same areas. We also asked them to tell us where they thought the value from each area would come from.

7% of the group came from organisations with 0-50 employees; 24% from organisations with 50-1,000 employees; 41% from organisations with 1,000-10,000 employees; and 20% from organisations with greater than 10,000 employees. 8% did not provide this information.

32% of the group have a seat on the main board of their organisations; 44% report to someone on the main board; 17% are in neither position. 7% did not provide this information.

0-507%

50-1,00024%

1,000-10,00041%

10,000+20%

?8%

Main board32%

Reports to board44%

Neither17%

?7%


Your next steps

Explore the possibilities – develop a Digital Enterprise strategy framework

Deciding what to do about disruptive digital technology trends is hard – it’s really difficult to know where to start. It’s perhaps too easy to focus on one aspect of digital disruption – for example, mobile technology – and explore potential projects there.

But perhaps you should be prioritising investigations into Cloud computing, social platforms, Big Data, or something else? Maybe an Open Data product or service is something that could yield value for your business?

A Digital Enterprise strategy only really makes sense when you can make sense of your business mission and strategy, and tie these to digital technology opportunities and threats to create a strategy framework.

If you’d like to find out how we can help you build a framework for Digital Enterprise investment exploration and investment prioritisation, please contact us at [email protected].


mailto:[email protected]

mailto:[email protected]

The Digital Enterprise: CIO perspectives

Leadership & Management

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