CIOs will need to look beyond just technology if they hope to turn their technology management departments into the digital transformation office.
A new report from Forrester, “CIOs Make the Chief Digital Officer Obsolete”, points out that CEOs will be putting pressure on their CIOs to deliver on platform-based business models and new partnership ecosystems.
“Experimentation, minimum viable products, and labs are so 2017. In 2018, digital business transformation will be played out at scale, sparking shifts in organisational structure, operating models, and technology platforms,” writes Pascal Matzke, Forrester vice-president: research director serving CIOs, in the report. “In 2018, CEOs will expect their CIOs to lead digital efforts by orchestrating the enabling technologies, closing the digital skills gap, and linking arms with CMOs and other executive peers better positioned to address the transformational issues across business silos.”
According to Forrester, by the end of 2018, around 40% of the revenues of global industrial firms will be based on asset usage or other software-enabled service schemes. In addition, more aggressive companies will shift their traditional business models into business platforms, reaching customers directly or through intermediaries and partners.
Matzke points out that while some companies may build their own platforms, most will have to learn to deliver over one, regardless of the ownership. He also says CIOs will need to gear up their underlying technologies and supplier relationships in order to meet the new business model.
In 2018, CEOs will find ways to replicate the agility of smaller, non-listed companies, going so far as to spin off or divest parts of their business to allow unencumbered focus on their digital ambitions. According to the report, change will be the constant companion for the CIO in 2018 and they will need to make use of concepts like Agile, DevOps, and design thinking to enable faster delivery of capabilities across the enterprise.
Forrester’s report notes that key to effective change in 2018 will be CIOs being able to find and retain the necessary talent as well as upgrading both culture and structure of their organisation to meet customer expectations. This, suggests Matzke, will present CIOs with the unique opportunity to position themselves as leaders of transformation and even the enterprise.
Co-developing skills with partners; cross training tech staff in business skills; tapping into the gig economy; and automating where appropriate will allow CIOs to address their skills issues.
On the plus side, Forrester points out that the growth in cloud will result in a shift in operations to third-parties. At the same time, Agile, DevOps, automation, and low/no code will become the norm in more mature technology shops and quality technology will be delivered faster, and at a more cost effective price point.
The report also advises CIOs to collaborate throughout the organisation, starting with marketing to help bring a more agile and flexible approach to serving the customer.
Technology forms a cornerstone of digital transformation and the report points out that turning to new technologies and developing predictive analysis capabilities will allow organisations to continuously stay ahead of changing customer desires.
Artificial intelligence (AI) and the Internet of Things (IoT) will remain a focus for CIOs into 2018, although Forrester has cautioned that those expecting major upheavals from blockchain-based networks will be disappointed. The company does, however, believe that quantum computing will continue to attract both interest and investment throughout 2018.
The report outlines how CIOs should think like venture capitalists to ensure success. By adopting a portfolio management approach to tracking, testing, and implementing new technologies, CIOs can back the best performing products and solutions, ensuring success.
In fact, Matzke goes so far as to say that the evolved positioning of the CIO will ultimately make the role of the chief digital officer (CDO) obsolete.