Rising demand for digital experiences will force companies to accelerate the pace of initiatives intended to capture customers in 2016, according to a survey of 947 business and IT executives polled by Forrester Research. But as CIOs revamp their IT systems and processes to meet these expectations, they will have to overcome the lack of clear strategies articulated by the top brass.
"What we're seeing is that everyone is focused on digital strategy and transformation," Sharyn Leaver, Forrester's group practice director for CIOs, told CIO.com. "But the technology needs to be paired with a strong understanding of what customers want."
Forrester says that while CIOs are boosting investments in business technologies, including cloud, mobile and analytics tools to serve customers, only 27 percent said their CEOs had laid out a coherent digital playbook to meet consumer expectations. Leaver expects that percentage will increase in 2016, as CEOs create a clear vision that shows how the business will deliver revenue generating digital experiences, ostensibly to differentiate themselves.
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But it will take major alignment of technology and strategy, paired with crisp execution, to pull it off. That's far from assured, as CIOs struggle with obstacles, such as perfecting the user experience and winnowing technical debt as they upgrade to modern systems, such as virtualized cloud environments.
Disconnect between ‘shiny digital object’ and business strategy
Consumers' preferences for accessing information and conducting transactions from any device have companies scrambling to roll out new mobile software and websites, the digital equivalent of a flashing neon sign imploring them to come in and look around. But Leaver says there’s often a disconnect between the customer-facing technologies companies introduce and the objective the business is trying to accomplish. For example, she says that while many companies are rolling out mobile apps, they are often bolted on and not necessarily tied to a broader digital strategy designed to lure customers and, more importantly, keep them coming back. The app, which essentially serves as a shiny digital object, may not gain traction, as consumers move to apps that deliver better experiences.
Creating great customer experiences means CIOs will have to find ways to thread the customer-facing veneers of their digital business back through their IT infrastructure and processes. For example, Amazon's.com website provides a digital front door customers may enter to shop. But it's the back-end systems -- the supply chain and logistics, the consistent application of analytics to improve customer service -- that allows the company to ship goods from all over the country within 48 hours or less, Leaver says. Such cohesive sophistication is what companies must strive for in the digital age.
It often makes sense for CIOs to rebuild their existing architectures -- say, moving from a rigid on-premises environment to a more automated cloud system -- to better address the agility required of mobile applications and websites. CIOs who can empower their business technology stacks from bottom to top puts himself or herself in position to succeed.
Leaver says CIOs must build agile business systems capable of changing rapidly on the fly. Such systems require agile methodologies, including rapid iteration of software as well as the processes used to deliver that software. Companies should get comfortable producing a "minimum viable product" and then continuously improve upon it. "It can't be a three- to five-year strategy anymore, because it has to be fluid," Leaver says.
5 tips CIOs can follow to drive digital strategies
- Work on a holistic yet agile strategy in the event that CEOs decide to pivot. Build digital lighthouse projects, or a subset of products that illuminate for a CEO that you can deliver quick returns. It will also build confidence in your skills.
- Focus on the customer experience ecosystem. In 2016, CEOs will align their digital strategies across multiple functions, including marketing, technology, logistics, manufacturing, and human resources. CIOs must develop the back-end systems will to support this integrated pipeline.
- Speed up IT simplification and accelerate the BT agenda. In 2016, CIOs will have to rationalize their IT portfolios to accommodate new technologies, such as cloud, mobile and analytics. That includes significant application refactoring and reduced reliance on disparate custom systems to provide greater BT agility.
- Know thy customer. In 2016 CIOs need to have a better understanding of marketing and customer experience. Working with their CMOs, CIO must adopt an outside-in approach and make customer journey mapping and design thinking part of your standard toolkit. That includes meeting their customers to understand their attitudes and preferences.
- Cultivate collaboration and open innovation. CIOs must engage with the business and external constituents by running hackathons, setting up targeted incubators and publishing APIs.
Following these rules won’t guarantee success. CIOs must execute and deliver on their strategies. By doing so, CIOs can assume greater responsibility for driving business strategy and growth. The CIO who can get ahead of the curve of digital change can prove their worth to their CEO -- or the CEO of another company. Witness Gerri Martin-Flickinger, whom Starbucks poached from Adobe, where she migrated the company to the cloud, to serve as its global CTO driving business technology initiatives for CEO Howard Schultz.
Conversely, dark days lie ahead for companies that don't align their technology to meet the business strategy, leading to a potential "downward spiral," Leaver says. She noted that the best talent won't work for a company viewed as a digital laggard ceding precious ground to rivals as it fumbles its execution. And without the talent resources, the companies can't succeed.