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Digital Business And The Next-Generation CIO

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Ray Wang, Principal Analyst & CEO of Constellation Research Group and winner of several prestigious awards, including a Congressional Commendation on Science and Technology, may have just proven himself worthy of a new award "Most Mobile Analyst", as he conversed with us from behind the wheel on our most recent CXOTalk Google hangout! Talk about a true picture of mobility in action. Wang took us on a wild ride that included his innovative approach to transforming business models with disruptive technology. Hang on tight as the conversation takes many twists and turns to include the multiple personas of the CIO, digital business transformation, customer experience management and gamification.

Wang cuts through the clutter and zeros in on the fact that no matter what the jargon or technology of the day may be, it all comes down to moving the needle to a desired outcome and he explains how creating an authentic business can help make that happen.

Constellation Research is setting themselves apart from legacy analyst firms by pushing the technology envelope and asking, "What does the future look like?" Wang gives the example of how one firm just announced a "Nexus of Forces" which ended up being all the things they knew were hot three years ago - social, mobile, cloud and big data. "These are not the future, they are happening now", says Wang. I can relate as I recall being in attendance at a legacy analyst conference where it was announced that the 2017 mega trends would be social, mobile and cloud! Hmm, those sound all too familiar don't they?
Wang's firm segments companies into different categories based on their mind-set with regards to technology adoption: Market leaders (5%), Fast Followers (15%), Cautious Adopters (50%) and Laggards (30%). While Wang, who loves technology, is especially excited to work with the market leaders and fast followers, he notes that every firm serves a different market and he is quick to excuse those legacy firms who may appear to be behind the times by pointing out that some are dealing with the cautious adopters and laggard market.

The Multi-Faceted Role of the CIO in the Authentic Business

Wang is working with Harvard Business Publishing on a book about "Authentic Businesses". He tells us that an authentic business is defined by a level of trust and transparency and it is a place where the move to people-to-people (P2P) networks, shared economies and connected devices and individuals are all converging. He says that in order to win, especially in the digital world, businesses need to deliver this notion of an authentic business and the CIO will be critical to making that happen. How you may be wondering? By making sure that the four elements of Infrastructure, Integration, Intelligence and Innovation are happening. Wang refers to it as the "four personas of the next-generation CIO":

  1. Chief "Infrastructure" Officer: "Keeping the lights on" and managing existing systems
  2. Chief "Integration" Officer: Bringing together internal and external data and systems
  3. Chief "Intelligence" Officer: Fostering business intelligence and getting the right data to the right people
  4. Chief "Innovation" Officer: Looking for disruptive technologies to drive innovation

Wang states that some cases companies will have a super CIO that takes care of everything but in most cases, companies will put the more tech-savvy roles into IT and put the more business-savvy roles into Shadow IT. But no matter how you slice it and dice it, the future role of the CIO will include making systems transparent and thinking about the trust factor and the brand to ensure that the technology supports the brand mission.

A recent Harvard Business Review article addresses the question that is on our minds, "Are we asking too much of our CIOs"? The article, which highlights Wang's four personas, concludes by saying that "before we can ask our CIOs to do more for business, we need to evaluate how the organization can provide the support necessary for all four of the CIO personas to function."

The Changing Role of the CIO

As other roles become more tech-savvy some of the burdens on the CIO can be offloaded, but never at the risk of losing innovation. Wang highlights the fact that when CIOs report to the CFO, innovation gets cut out in favor of cost control, contributing to the view of the CIO not being effective. He tells us that market leaders and fast followers tend to view technology as being part of the business strategy, where the CIO is viewed as an advisor. This aligns to what I have been hearing from Intel CIO Kim Stevensen and a number of other CIOs who are saying that there are "no IT projects, just business projects". We are seeing the blurred lines of the CIO and CMO, the IT budget going outside of IT, and as every aspect of business becomes digitized, we see the new role of Chief Digital Officer (CDO) picking up momentum in the marketplace. What does all this mean for the role of the CIO? Wang tells us with certainty that the CIO won't go away, but the role is changing.

Digital Business Transformation is About Beginning with the End in Mind

Wang tells us that in every industry we are seeing a shift toward focusing on business outcomes rather than simply selling a product or service. He uses the example of Disney, who does not just sell a ticket to an amusement park, but rather they are selling a whole lifestyle - from clothing, to movies, to vacations, to even a retirement village. It is this move to business outcomes that has companies asking questions around data and they are using that data to see where they can digitalize processes to affect an outcome.

In the simplest terms, Wang tells us that digital business transformation means that we are automating our processes, the ability to capture results, and we are being able to do this at a different level of speed. "The new tools, new jargon and new technology are there to keep things exciting and to help companies break cycles, but the digital transformation we are facing is all about moving the needle to affect outcomes. It's all about beginning with the end in mind", says Wang.

"There is much proof out there that a level of digital business is happening and that digital business transformation is real," says Wang who points to the fact that a search on CDO titles on LinkedIn returned about 100 executives. I also shared my view on the emergence of chief digital officers in my recent interview with MIT Sloan Management Review.

Using Customer Experience Management and Gamification to Achieve Outcomes

Wang tells us that customer experience management focuses in on those processes that make up the lifecycle journey of a customer. And he says that nobody does it well as a whole, albeit small pieces are done really well. He says that as more and more marketers begin to capitalize on the "digital exhaust" of consumers they will begin to use context to drive the type of content they create which can help to deliver a better all around customer experience - one of the trends that Wang says we will see in 2013 as we shift from CMO to CDO.

Playing into the basic human desire to be rewarded, recognized and get something for nothing, comes "gamification", the use of gaming principles in business to achieve results. Wang says that gamification, a term he originally thought would go away but now thinks will stick, is part of the digital piece that will get more enterprise credit along the way. Gamification is all about influencing behavior and outcomes and it ties back into business processes. He says that the hardest part is getting the incentive model right, which comes with listening in and asking people what is important to them.

I have used principles of gamification in our services and support business for a number of years and I absolutely believe that with the right purpose, the right culture and the right inclusive nature of making sure that there is meaningful recognition, it works. In every key performance indicator and measure of performance in our service and support business we have had seen positive results. But for it to work, you have to have the right purpose because it is not a game. You are trying to incent the right behavior and you want to align it to your company's mission. There has to be some thought that goes into it, but I believe there is room for gaming principle in business in terms of achieving desired results.

Social Business is Just Business After All
As one of the most prolific analysts on Twitter we know what Wang's stance on social is, but what is his advice to his less than socially savvy clients? "Not everybody has to be social but their companies and brands hopefully are. Nothing replaces 'in real life', the word social business is going to go away, it is just business," says Wang.

To his personal use of social media he tells us, "We are living in an awesome age and things are happening so quickly and Twitter is my way of sharing it and passing it on. All these connections are coming to life with people you normally would not have met, creating all these opportunities to have conversations that you wouldn't have before."

Want more? Join Ray Wang and other innovation-minded leaders who are pushing the envelope with disruptive technologies at Constellation's 2013 Connected Enterprise conference happening October 30th-November 1st.

You can watch the full interview with Ray Wang here. Please join me and Michael Krigsman every Friday at 4PM as we host CXOTalk - connecting with thought leaders and innovative executives who are pushing the boundaries within their companies and their fields.

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