How CIOs can transform to create competitive advantage

As businesses emerge from the shadows of a paralysing pandemic – tasked with kick-starting recovery efforts without delay – the need for competitive differentiation is coming into sharp focus.

Following a year of resilience, CIOs are shifting gears to lead change efforts both internally and externally, accelerating at pace to execute boardroom growth agendas.

According to State of the CIO findings, 86% of technology executives across Asia Pacific are prioritising ‘transformational’ initiatives during the next 12 months, motivated by a desire to drive business innovation (40%) and increase competitive differentiation (31%).

Armed further by a CEO charter to digitise, CIOs are taking a lead role in turning enterprise-grade technologies into business advantage through the pursuit of new go-to-market strategies and long-term initiatives.

“Now is the time for CIOs to shine,” observed John King, Senior Vice President of Asia Pacific at SoftServe. “The relationship between technology and the business is changing as CIOs become more engaged by the boardroom to drive innovation projects.”

King made such observations during CIO Innovation Series – in association with SoftServe – which showcased the leading CIOs across Asia Pacific using technology to drive market differentiation, documenting examples of best practice and leading transformation priorities ahead. Discussions took place via a series of exclusive CIO virtual roundtable sessions spanning Singapore, Indonesia, Thailand, Vietnam, Australia and New Zealand.

“Organisations are now testing technology to drive new levels of business value, rather than defining the business objectives and aligning technology behind,” King added.

For King, CIOs are no longer seeking to simply deploy technology, rather differentiate through technology which represents a significant shift in approach across Asia Pacific.

“The old adage of ‘we want to innovate but can’t because our IT systems won’t allow us’ has moved leaps and bounds to; ‘we want to execute and with the right approach to technology we can make our business even better’,” he said. “The pandemic has accelerated this and as a technology partner, our role is to help CIOs leverage new solutions to create competitive advantage.”

Creating competitive differentiation

Speaking as CIO and Vice President of Business Technology, Singapore-based Jim Sarka outlined that technology advancement – combined with the agility to test new experiences – is profoundly improving how Johnson & Johnson Medical Devices supports customers, patients and employees.

“Digital is at the core of driving competitive differentiation – starting with a continuous learning mindset and digital proficiency in our business,” he noted. “With a shared understanding between business and technology we can drive digital solutions strategically and intelligently.”

For Sarka, such an approach takes shape via a platform-oriented framework, digital product management skills and scalable architecture, supported by healthy data, partner ecosystems and a strong cyber security foundation.

“We also recognise an important intersection of the traditional economy of scale and economy of speed when it comes to tech-enabled business models – this is an emerging centrepiece of our discussions to better drive improved digital agility and outcomes,” he added.

According to State of the CIO findings, 97% of IT executives across the region identified the CIO role as becoming more digital and innovation focused, with 92% increasingly likely to take the reins on transformation efforts compared to other leaders in line of business departments.

In addition to business strategy and transformation responsibilities, Asian CIOs also continue to assume ownership of new revenue responsibilities, taking on duties outside of traditional IT while embracing a more customer-centric mindset.

Such a shift in priorities is heightening demand for competitive differentiation, irrespective of company size, stature or sector.

“The future of real estate is no longer just delivering a physical space with walls to tenants or homebuyers,” observed Ivan Ng, CTO of City Developments Limited.

“Customers are looking to change how they work, live and play, with customer-centricity and strong experience becoming critical. The right investment in technology can enable us to create a differentiated and better experience and to take advantage of the opportunities provided by this disruption.”

In this post-pandemic world, CDL’s proprietary platforms such as CityNexus and CDL HomeBuyer platforms are helping the business reimagine customer experiences levels, empowering users to feel more engaged, productive, safe and connected in the process.

“Providing customers with an always-on engagement platform powered by intelligent automation and robust data infrastructure enables us to offer a frictionless experience and to proactively respond to their needs,” he said.

“The use of real-time analytics, the Internet of Things [IoT], and artificial intelligence [AI] technologies also allow us to augment our buildings to become smarter spaces for our customers.”

Unique IP

Delving deeper into the research – supported by CIO Innovation Series roundtable discussions – the onus for IT executives to create new revenue-generating streams now extends to the development of new products and services.

Within this context – and in light of the socioeconomic challenges generated by COVID-19 – CIOs across the region continue to prioritise the introduction of new revenue streams (47%) while increasing top-line revenue (52%) and boosting profitability (61%).

“Creating unique IP and owning the core pieces of this technology is crucial for CIOs,” King stated. “Volume products which aren’t key differentiators can be purchased off the shelf because they are repeatable but that approach changes when the product sets the business apart.”

In short, organisations are now motivated by a desire to improve customer experience levels through the creation of unique IP, irrespective of B2B or B2C audience.

“To provide the best experience for customers, we must understand what outcomes matter to them,” outlined Ng of CDL.

Yet such answers are only found on the frontline – acknowledged Ng – where CDL’s technology and business teams work tirelessly to uncover customer issues and understand operational realities.

“We had to make changes in how we work,” he said. “To prioritise initiatives, business and technology leadership co-developed and jointly review the technology roadmaps.”

Instead of traditional siloed IT functions, CDL is increasingly organised around digital platforms, run by product teams of managers and architects accountable for business outcomes.

“We are now able to deploy our most experienced technologists where they are needed most – into teams that are designing and building complex technology for customers,” he explained. “Also, instead of handing over to a support team after delivery, these product teams continue to run the platform as a business and are equipped with the best methods and tools to continuously innovate.”

Speaking as General Manager and Director of Technology, Operations and Finance at Commonwealth Bank Indonesia (CommBank) – Tim Delahunty cited success as finding the balance point between a range of corporate outcomes.

On the one hand, Delahunty could be highly innovative yet let focus on daily hygiene lapse and expose the business to unacceptable risk. On the other hand, he could channel his CFO DNA to excel at costing-out and delivering cost efficiencies but at the detriment of customer service or creating legacy debt.

“Neither of these outcomes would be successful,” he acknowledged. “I’m always trying to navigate the balance point across system stability, risk, capacity, capability, innovation and of course, cost. When the balance point shifts, the team and I need to be adaptive to that shift.”

Enhanced partnerships

As businesses build innovation strategies and create unique IP, the notion of control has once again resurfaced between CIO ownership and partner ecosystem support.

For Sarka – in referencing conversations within the corridors of power at Johnson & Johnson Medical Devices – the approach is simple; “innovation is a team sport”.

“Our business partners are eager to delve deeper into the digital world to drive business outcomes and are looking to our technology function to lead the charge,” he said.

“This includes setting the stage of what the future opportunity looks like in digital healthcare and becoming a more digitally savvy business by asking the right questions at the right time. This is alongside driving new leadership directions with an aligned digital ambition as part of our overall business growth strategy.”

As a result, the organisation is now receiving enhanced levels of support to strengthen processes with digital capabilities at an accelerated pace, Sarka added.

“This is all to support hospital systems and surgeons through capabilities such as digital case coverage, remote case observation, digital professional education in effect to create better patient outcomes,” he outlined. “We are also leveraging AI, chatbots, knowledge graphs and data science capabilities to drive greater operational efficiency and insights for our teams that support hospitals and surgeons.”

In assessing the evolving sync up between CIOs and partners, Ng of CDL noted that traditionally, IT reduced costs by outsourcing most of the operational work and focusing on vendor management.

“This model is inherently flawed, as value innovation is critical in the digital world and no matter how attractively it’s positioned, innovation cannot be outsourced,” he clarified. “Yet, it’s often a false dichotomy to choose between build and buy.

“We need to be realistic to prioritise the development of our strategic IP and capabilities yet mindful to scale up with partners to obtain capabilities that are non-strategic or may be too specialised to recruit talents for. By doing so, we can remain in control of our unique IP and yet scale quickly and cost-effectively.”

Meanwhile, Delahunty referenced that market-leading technology teams understand their purpose and what’s at the ‘core of the core’ of what they do.

“Sometimes this means not doing everything yourself meaning we take a strategic partnership approach to our operating model, which seeks to clearly define ‘what we do’ and what ‘partners can do it better for us’,” he qualified.

Building on all CIOs observations, King emphasised that SoftServe continues to hold the position of first understanding what a company is trying to achieve before advising on the right technologies and approach to achieve that objective.

“Organisations are getting smarter and employing talented people,” he said. “CIOs are driving this so to become a valued partner, our role is to help accelerate the adoption and use of new technologies to deliver outcomes in alignment and partnership with the wider business.”