The Harvey Nash/KPMG 2018 CIO Survey, Part 3

As discussed in the first Part 1 and Part 2 of this blog series, the twentieth annual Harvey Nash/KPMG CIO Survey, The Transformational CIO, makes it clear that the changing and evolving technology landscape is deeply transforming organizations and leadership, creating new challenges and opportunities for the CIO to grapple with.

One transformation priority has been fully brought into focus: Enterprise-wide customer centricity is a must that no company can ignore. Admittedly, many IT organizations are struggling to manage a wide variety of customer-focused capabilities, with only a quarter of CIO Survey respondents saying they are ‘very effective’ or ‘effective’ across five key capabilities, including creating engaging customer experiences; generating actionable insights from customer data; and measuring profitability by customer.

But the evidence proves it is well-worth continuing to work towards customer-centric success across the enterprise: This year’s results found that customer-centric organizations are 38 percent more likely to report greater profitability than those that are not. In addition, the survey showed that the most influential, successful organizations are fanatical about delivering value to and from their customers.

Being focused on a customer-centric agenda has become a requirement in today’s business landscape, emphasizes Barry Brunsman, principal, CIO Advisory at KPMG. Those that do it well, he explains, create a cycle of success.

“Organizations that are very good at meeting customer expectations generate buzz, and as they are successful in the marketplace they can do things like price more competitively and streamline operations, which creates a virtuous cycle,” he says.

IT must serve as customer experience enabler

The foundation of that virtuous cycle of customer experience comes from IT, adds Jason Galloway, Customer Solutions managing director of KPMG. “IT has to be an enabler of the customer experience, of what customers are looking for,” he says, pointing to companies such as Uber and AirBnB, where the product is technology and the service is built around customer experience. Consumers have come to expect that level of connection between the technology and the customer experience — no matter what product or service is being offered.

“IT has to transform and stop thinking about only running systems that manage the back office, such as financial systems and operations,” he adds. “Technology needs to be in the forefront of their minds as they start to build and manage the customer experience, both providing for customers and inspiring employees.”

This creates a broad, balanced agenda for IT leaders to think about: That is, developing a focus on high-priority ways to engage customers, while also addressing deficiencies in the ‘plumbing’ that underpins those solutions. That is what really starts to force a transformative, customer-centric approach to IT, say Brunsman and Galloway.

“Customers want adaptability from their providers, as well as excellence,” Galloway says. “What I need from you today might not what I need from you tomorrow — you need to be able to keep up, or maybe even stay ahead of me.” This leads to key ideas within IT, such as API development, that allow companies to push new and engaging functionality into their customer experience, he explains. Those efforts require important architectural decisions around data, the integration of different solutions, and the ability to create an approach to providing IT solutions that allows for adaptability.

“A lot of the art of transformation is looking for that balance,” he adds. “For example, you can’t really move forward with a strong data and analytics agenda to help you target customers if you don’t have the underlying data architecture to make that happen.”

Winner take all: Customers will go to the transformation leaders

Companies that lose the digital race to their competition will find themselves left behind, says Brunsman, who explains that with this sort of holistic transformation, the winner typically takes all — take the classic example of digital upstart Netflix beating brick-and-mortar Blockbuster. “Customers tend to go to the winner, and it’s awfully hard to recover from that,” he explains.

With that concern in mind, companies will continue to boost their investment in enterprise-wide customer-centricity, transforming into providing a digitally-powered customer and employee engagement experience that allows companies to be more successful in the marketplace.

The role of the CIO will continue to be increasingly important as companies reach towards these goals, adds Galloway, particularly around breaking down silos between different parts of the organization, as well as orchestrating and brokering the transformation efforts across the enterprise. “The CIO is uniquely positioned to know what’s going on throughout the organization, to be able to encourage different siloed areas to talk to one another,” he says.

An interesting consequence of that, adds Brunsman, will be a focus on fundamentals — around architecture, development processes and operational processes that support the rapid development and integration of solutions. “This is a potential win-win for the technology professionals in this space, both in terms of working on things that are really important to the business, as well as creating a more engaged environment for other employees,” he says. “In so doing, I think it will reinforce investments in engineering talent and technology skills development, which is pretty powerful.”

As CIOs and IT leaders look forward towards the end of the decade, they will be well-served to hone in on the results of the Harvey Nash/KPMG CIO Survey 2018, which definitively show that the customer is key and that a clear, enterprise-wide digital strategy is what will propel organizations to the next level of digital transformation success. Digital and customer-centric leaders have set of priorities that are different than the global average, focused around revenue growth and new products and services. An IT organization focused around customer-centric systems and processes that help create a holistic, single view of the customer is a key element of this essential, forward-thinking strategy.