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Technological change and uncertainty demand a more flexible enterprise based on cloud technologies and putting both customer and employee experience at its core. What is the Living Enterprise, and how can CIOs help build it?
Change is inevitable, both in business and in life. Between technological developments and new, disruptive business models, the pace of change is only getting faster. This year has demonstrated how a global pandemic and social upheaval can transform market conditions in the blink of an eye. Change can unsettle the largest and most successful enterprises, especially when they attempt to meet it with long-established practices and old ways of thinking. Instead, it demands a new approach – to become a “Living Enterprise,” capable of not just handling change, but proactively embracing it.
The Living Enterprise is best thought of as a visionary, agile, forward-looking organization that adopts new working practices, processes, and technology in order to improve both employee and customer experiences. Such organizations use open and creative technology platforms to understand, in real-time, what its customers want and need, and to optimize and personalize the customer journey, based on insights from customer data. For the Living Enterprise, data is the key nutrient, and AI and machine learning the functions that transform it into actionable information and enhanced, live customer experiences. The Living Enterprise never stops learning and growing, both anticipating and reacting to market conditions, while developing new capabilities that empower it to compete.
The focus on the customer experience is crucial. Speaking in March last year, Adobe CEO Shantanu Narayen said: “We think the imperative for every company in this digital era is to start with the customer and build in.” This means putting a laser focus on the customer experience and using that as the starting point to transform the way the business operates through integrated apps and services, coupled with the right talent and processes. Delivering this, according to Narayen, “requires a broad ecosystem, creativity, and a customer-obsessed culture across the whole organization.”
But while the Living Enterprise puts the customer front and center, it doesn’t neglect the experience of its employees; something Microsoft has addressed internally through its Productive Enterprise initiatives, which have sought to rethink both the physical and digital experience to engage and empower its employees.
The Living Enterprise understands that by modernizing the workplace and working practices – and delivering appropriate skills, resources, and tools – it supports employee efforts to drive future growth. This means no silos, no fragmentation, and no interoperability issues. Closer collaboration and agility come together in making the Living Enterprise work.
For many IT operations, this represents a major shift, from a safe and steady operational model focused on minimizing risk, to one that views standing still and playing safe as the ultimate risk. As Ron Hayman, Chief Cloud Officer and COO at Avant Communications, told CIO.com, “You have to have a need to change and innovate, otherwise you put your company at risk.” The Living Enterprise is one where employees feel empowered to do their best work in a dynamic culture. “CIOs have to be focused on competitive advantage and providing their organization more options and more flexibility to operate in conditions that change,” Hayman added.
The Living Enterprise also recognizes that this process is continuous. In the words of David Clarke, Global Chief Experience Officer at PwC, “It’s a mindset change. Digital transformation is more of a DNA thing, it’s more of how you operate, it’s the idea that you’ll never be finished, because you never know what the next great idea or technology will be.”
CIOs are the driving force behind the Living Enterprise, partly because its needs match their own imperatives. IDG’s 2020 State of the CIO report shows that nearly half of CIOs see themselves in a transformational role, while 95% say that this has expanded to include new responsibilities, with nearly half stating customer experience. The report also clarifies that IT and Line of Business leaders align in recognizing increased operational efficiency and an improved customer experience as key objectives for the years ahead.
What’s more, the COVID-19 crisis is accelerating transformation, not holding it back. A recent IDG survey found that 71% of IT leaders surveyed felt that the effects of the pandemic were accelerating their digital transformation efforts. Meanwhile, 58% thought that the shift to working from home had forced the creation of new, more efficient and potentially lasting workflows, while more than half placed optimizing the employee digital experience and improving customer experience as highly significant business initiatives. Given this, it’s perhaps no surprise that Microsoft’s Satya Nadella recently noted that, as a result of COVID-19, Microsoft saw two years’ worth of digital transformation in just two months.
So what does building the Living Enterprise involve? Technology is a key element, and the Living Enterprise relies on investments in cloud services and platforms, machine learning, AI, data analytics, and the network infrastructure to support this. For instance, the combination of the Adobe Experience Platform and Microsoft services, including Dynamics 365 and Azure, works to generate insights and innovation, and create new customer experiences from the widest range of rich, real-time sources of customer data, both structured and unstructured. Interoperability and portability create flexibility and fuel growth, and by implementing the right core IT systems and supporting new working practices, the CIO can help build a living enterprise that can adapt, learn, and move at speed.
Yet it’s also about processes and people – about creating and communicating a vision that can obtain buy-in from above and below. Building the Living Enterprise demands close collaboration with business units to understand the limitations and opportunities they face and the tools they need. McKinsey has argued that, when trying to drive this kind of transformation, it can be more effective to take the question “How does this create value for the customer?” as a starting point, rather than talk about business cases or the competition. Everyone needs to know why the enterprise is changing, what this change hopes to achieve, and the actions and behaviors required.
And while building the Living Enterprise takes collaboration across the business, the pivotal partnership is the one between the CIO and CMO. Research by Adobe and Microsoft has shown that the two roles share areas of focus, seeing AI and machine learning as priorities and siloed data sources as a challenge, even when they differ on some departmental goals.
Speaking at Adobe’s virtual conference earlier this year, Adobe CEO Shantanu Narayen described this decade as “the decade of the CMO and CIO.” In the past, he argued, CMOs have brought their marketing and communications expertise, along with their knowledge of the customer journey, while CIOs have focused on architecture, data, and day-to-day business operations. “All that is changing,” he explained. “Marketing has become more data-driven, CIOs have become more customer-centric, and leaders are working more closely than ever before.” The result is that “CMO-CIO partnerships develop compelling customer experiences at scale.”
Enterprises face a period of dramatic change, and that demands something more than a business as usual, tried and tested approach. It demands an enterprise that can adapt, anticipate, and flourish, and the time to start building it is now.