7 Ways CIOs Should Prepare for the Digital Enterprise

The whole world's gone digital. As today's companies try to keep up, many CIOs feel like a hamster on a wheel, constantly moving but never getting anywhere. This advice from the recent MIT Sloan CIO Symposium could offer at least a bit of relief.

CAMBRIDGE, Mass. — The debate about technology in the enterprise used to focus on hope vs. fear. Now it's fear vs. fear — specifically, the fear of becoming the next Target vs. the fear that technology will eat your lunch, says Narinder Singh, president of [topcoder] and chief strategy officer at Appirio.

Just as we recognized that software is eating the world, Singh says CIOs must also recognize a broader phenomenon: As robotics, 3-D printing and wearable tech demonstrate, the world is becoming programmable.

Scary? Sure. However, Singh and others speaking at the recent MIT Sloan CIO Symposium also suggest that digitization drives innovation. As one example, Peter Weill, chairman of the MIT Center for Information Systems Research, points to Orange Money, which lets Orange mobile phone customers in rural, developing nations access previously off-limits financial services.

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Companies that deny the power of such mobile technology — along with its social, analytics and cloud brethren — face a foreboding future. Discussions at the MIT CIO Symposium offered the following seven bits of advice for firms that wish to avoid that fate.

When in Doubt, Buy, Don't Build …

With so many data systems and experts in a divergent market, many executives say it doesn't make much sense to roll your own analytics. This is especially true of "exploratory" work that requires little more than a database, a SQL store and a data visualization app, says Puneet Batra, co-founder of analytics startup LevelTrigger. As for where to focus that work, Batra suggests looking at marketing, operations or any parts of the business that happen to be "suffering," adding that analytics requires an agile approach.

This points to the larger trend of the CIO as a technology broker. CIOs increasingly serve as in-house service providers, as the intermediary for line of business managers and external service providers. This shows that the wall between IT and the business has fallen, Singh says — and it offers the opportunity to wield more influence over technology decisions.

… Unless You're Really on to Something

That said, the buy vs. build conversation shifts when you begin to differentiate, Barta says. He refers specifically to Tesla building its own ERP system, which the company did for both scalability and flexibility.

[ Related: Google Corporate IT Builds Before Buying ]

Yes, there are data experts, but there still aren't a lot of data scientists — and firms could fill that gap with "curious" employees who may lack a data science background but possess a high degree of business knowledge, says Don Taylor, CTO of Benefitfocus. As you build those data science skills, he adds, these employees "build ROI from the bottom up" and help CIOs demonstrate to executives and the board the value of data analytics.

Remember, It's All About the Outcomes

For all IT projects, not just analytics, the value lies in the outcome. These outcomes, in turn, must align with business objectives, says Douglas Menefee, cloud CIO advisor with Amazon Web Services. In an increasingly digital world, he says, this means looking at technology as a commodity that makes life easier for all employees and lets them focus on an ever-growing list of business challenges.

Outcomes don't matter only to employees, though. Stephen Neff, enterprise CIO at Fidelity Investments, says the mobility, collaboration, personalization and context built into customer-facing apps needs to reflect that customers care about outcomes, too — so much so that customer experience must be part of any organization's ecosystem.

Apply Agile Principles to All of IT, Not Just Development

How do you do that? Apply agile principles to all aspects of IT, not just development, says Brook Colangelo, senior vice president and CIO with Houghton Mifflin Harcourt. This helps everyone in the IT organization see through the eyes of the end user.

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The digital transformation of the world entrenches the notion of instant gratification. This actually promotes agility, Colangelo says — instead of having a long meeting to discuss project requirements, it's better to have an ongoing, iterative conversation.

Prove Your Business Value

Our world of instant gratification does present some downsides. If an IT projects take years to implement, how (and when) can you show executives that it's paying off? Conversely, how do you show that something's worth an investment in time, money and resources if it doesn't even exist yet?

Chip Gliedman, a principal analyst with Forrester, says this shows that today's IT projects must demonstrate time to value, not time to implementation. If a project will in fact take years, point out lessons to be learned along the way and applied to other business units. This represents a key consideration — since no one wants to be first, but everyone wants to be second, it can cushion the blow for the guinea pigs.

CIOs must explain this in business terms, not technical terms. To do this, Gliedman offers this suggestion: "We're working on (blank) to benefit (blank) by doing (blank)." Don't name specific technologies, either.

Stay in Front of the Organization

Of course, you could argue that it's 2014 and IT shouldn't have to prove its business value. "There is no business without IT anymore," Colangelo says. "You can't write, produce or deliver content to a customer without IT. We are the business now."

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But old habits die hard. That's why CIOs need to stay in front of their organizations. As it turns out, boards are hungry for information, so IT leaders should talk to boards regularly — and not just on the regular presentation cycle, given how quickly things can change. Boards want to know about the risks of IT investments, but it's also important to demonstrate the benefits. Again, put it in business terms.

Work With Your CMO — or Else

A CIO's engagement with the suits shouldn't stop with the board. It's no secret that CIOs and CMOs must work together — and not just because CMOs increasingly control more of an organization's IT budget and, therefore, influence.

There's another wrinkle to the CIO-CMO relationship: the chief digital officer. As consultant Dan Petlon sees it, the CDO role is on the rise because CIOs struggle to work with their CMOs (or with the rest of the business, for that matter). Put another way, the CDO comes in to break down silos separating departments, particularly at companies struggling to enter the digital age.

Whether the CDO will be the CIO's peer, boss or adversary remains to be seen — but the mere existence of the position should tell CIOs something about how their role will grow and change in an increasingly digital enterprise.

Brian Eastwood is a senior editor for CIO.com. He primarily covers healthcare IT. You can reach him on Twitter @Brian_Eastwood or via email. Follow everything from CIO.com on Twitter @CIOonline, Facebook, Google + and LinkedIn.

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