CIOs are under more pressure than ever to deal with the business disruption created by a new global digital economy. Workers are using many different connected devices to interact and transact across the Web, mobile and social media channels.
The challenge for IT departments is to understand how to harness information created through these channels – beyond marketing analytics – for business advantage.
IT leaders gathered recently to discuss what digital leadership means to them and how they are helping lead digital transformation across their organisations. The roundtable was sponsored by UXC Connect and CA Technologies. Several attendees were just starting down the road towards digital transformation.
Ian Brightwell, CIO at the NSW Electoral Commission (NSWEC), says his organisation knows digital will greatly impact its environment. At present, each division is undertaking projects with its own resources.
“The overarching vision and strategy is lacking but that will come as management realises that siloed development has its limitations,” he says. “The use and management is an evolution which can only go as fast as the management matures. We are still a way down the maturity curve.”
Not surprisingly, fast food giant, McDonalds, has put digital transformation programs in place. Its A/NZ and Pacific CIO, Henry Shiner, says the company is broadly embracing digital engagement with customers through new ordering, digital menu, social media and customer relationship management processes.
“Our mobile ordering platform is a significant part of that strategy that is coming to life in our restaurant as we speak and will bring new convenience and intimacy in the way our customers engage and purchase,” he says.
Dan Collins, CTO and head of digital and media at the Powerhouse Museum, says it has not made a concerted effort to enact a digital transformation strategy in recent years.
“We are on the case now though. New management, a new strategic direction, and a significant restructure has set the stage for major transformation – a large part of that will be delivered in the digital realm,” he says.
The Powerhouse Museum has a mobility strategy focused on customer engagement, providing information to visitors on their chosen mobile devices. “In the near future, we will be looking to integrate disparate digital services – ticketing, membership and in-gallery information – into a single tool,” he says.
Andrew Paton, group manager of IT services at Rondo Building Services, doesn’t use the words ‘digital strategy’ at this stage.
“We have an IT strategy aligned to the business strategy and core components of that focus on using the latest hardware and software tools to maintain our competitive advantage,” he explains.
“For example, our mobility strategy primarily targeting our sales team embodies this. We have rolled out the latest touch-based hybrid tablets and have streamlined our remote access to network resources, and [completed] significant projects like rolling out Microsoft Dynamics CRM 2013.”
Still, the organisation’s marketing department engaged a third party to create an app that completes calculations for its product range.
“It has been very well received, but the marketing [department] would say the provision of such an app at this stage is more about building brand as opposed to generating sales,” Paton says.
“Certainly, it may lead the person using the calculator to ultimately purchase from us, but I’m not sure we could draw that direct correlation at this point in time from the use of the app itself. There is a facility to obtain technical assistance through the app, but not order product.”
Rise of the CDO
Gartner has predicted 25 per cent of all companies worldwide will have created a new chief digital officer role by 2015 as organisations look to digitise operations.
McDonalds has appointed a head of digital in its Australian and New Zealand business to focus on aspects of marketing that are digitally enabled, says Shiner.
“From a global perspective, we have appointed a chief digital officer who is driving and aligning the digital strategy across all McDonalds areas of the world,” he says.
The CIO’s role in this scenario is to execute and enable the digital strategy, through front-end technology and middle tier development, Shiner says. The head of digital is responsible for front-end design and user research.
Read more: Tech spending outside IT rising
Others, however, are not so keen on the idea of a CDO. “I’m not sure they would be welcomed,” says Brightwell.
“We would only be about half way up any of the maturity models and this means we would not have well enough defined processes to recognise areas where collaboration would yield benefits. If someone came in and tried to do that, they would be facing a real challenge.
“The role, if it did exist, would have to be in the first instance an educative role, which would make managers aware of the missed opportunities and help them define processes and current shortfalls in the process,” he said.
According to Paul Timmins, chief operating officer at UXC, the appointment of a CDO sends a very strong signal to the organisation that the CEO and leadership team are serious about the importance of a digital strategy for the future success of the organisation.
“Another circumstance where a CDO might be appointed is if an organisation is setting up a new business unit to drive the new digital side of the business, thus having no impact on the traditional business model,” he says.
Digital strategy is the CEO’s responsibility at NSWEC, says Brightwell.
“As it stands now, he is the only one with the breadth of control to direct these types of initiatives,” he says. “Obviously, he only has limited knowledge and time and as such, this is an area which is going wanting.”
Collins says the CIO/CTO role is a key stakeholder in delivery of the Powerhouse Museum’s digital strategy. “It’s new territory with all roles through the museum having a new focus on digital, whether these roles are public facing or back-office functions,” he says.
Digital transformation strategies will only bear fruit if IT teams work with the business on execution.
This means the IT group needs to provide an environment where the rest of the organisation can accelerate the processes required to be agile, deliver services fast in the digital world, says UXC’s Timmins.
“The IT team must deliver increasingly sophisticated technology and greater IT delivery performance will be required across the board. This will be essential in the successful execution of a digital transformation,” he says.
As part of CA Technologies’ Digital Enterprise: The role of the CDO research, senior executives reported customer engagement and increasing market share were key reasons for digital being so strategically important.
“The fact is, the owner of ‘digital’ is still up for grabs, so if IT can demonstrate to the business that it has control, is driving revenue and engagement, is responsive and can increase speed-to-market, it becomes the hero,” says Darren Reid, senior VP of partner sales for Asia-Pacific and Japan.
“With digital becoming an increasingly strategic element of business, those CIOs that take control and have the ability to communicate the value of new technologies will become even more important.”
Timmins agrees CIOs play a vital role in executing digital strategy in a support and leadership function. The CIO must also be involved in strategic decision making and innovation.
“For a digital strategy to be successful, it needs the support of the CEO and all senior leaders to maximise the benefits of digital, and the potential risks of failure make it essential that they shape and oversee the program,” he adds.
Join the CIO Australia group on LinkedIn. The group is open to CIOs, IT Directors, COOs, CTOs and senior IT managers.