EDMONTON – It’s 2016 and UK-based HomeCo is feeling the pressure from competitors in a way it never has before.
This fictional maker of home appliances, as described by Gartner Inc. research director Ian Cox in his keynote at the CIO Peer Forum, doesn’t see digital as a high priority. So the CIO starts the conversation, asking tough questions about what new digital channels mean for her company. She comes back to the board with a vision that sees the appliances firm transform its product line to integrate connected devices, producing data that can help forge a better relationship with the customer.
By 2018, HomeCo is using sensors embedded in their appliances to collect information on performance and usage. The firm has launched a mobile app and a customer web portal. They push out alerts and reminders about usage tips and maintenance to their customers, and the customers can request service calls over digital channels.
By 2020, HomeCo is using algorithms to predict when maintenance issues will arise based on data. Preventative maintenance is scheduled by a digital assistant and consumables (like dishwasher soap) are automatically replenished. “They’re beginning to create an eco-system and additional revenue streams,” he said.
In 2022, HomeCo has evolved to become a home management company offering appliances as a service. It operates a platform that’s open to connect with other devices and eco-systems.
It might be a fictional story, but Cox says that any CIO could stand to learn from the example. Just like HomeCo was feeling pressure from international competitors, other entrenched business operators could be disrupted at any time. Those new competitors don’t need to acquire all the legacy technology that a company started in the ’90s did – they just buy it as a service and scale it as needed.
So the digital journey has to start now and the CIO has to lead it, Cox says. “No one is better placed to lead that journey… it probably has to be you.”
To do so, Cox laid out three key steps to follow:
- Create a vision. You have to paint a picture of the future of your industry and your organization. If you don’t do this, Cox says, you’re just “doing random acts of digital.” That’s a path that leads to duplication, conflicts, gaps, and waste.
- Bring the vision to life. “The sooner you start bringing your vision to life, the sooner you start minimizing the risks of disruption,” he says.
- Build digital capabilities. “you need different capabilities to survive in the long term in these new markets.”
As you pursue digital transformation, don’t fall into the trap that it requires a big investment in new technology, Cox warns. It can involve taking the resources and capabilities you already have and applying it in different ways.
Many CIOs will have experience doing this in their own IT departments, thanks to the lean methodologies of agile and DevOps. Now that can be extended out to the other parts of the organization where it makes sense.
“The opportunities for CIOs is every prototype and experiment you’re running is to discover new capabilities,” Cox said. “You can create them using the stuff you have.”
Also avoid putting in place governance structures that slow things down. They have to help speed things along. This is where many startups succeed, in being open to collaboration and designing services that are interoperable with technology. Members of your board should also be comfortable talking about technology.
If done right, this will lead to more face time for the CIO with their CEO. As IT transforms from an internal supplier to a key revenue generator, the role of the CIO changes too.
“There’s a shift from a very internally focused IT leader to a very externally focused business leader,” Cox says.
In that world, 2022 sounds like a pretty good year.