In these challenging times it is more than ever crucial to separate the real trends from fads and fashions and to be able to identify the big issues, business agendas and threats and opportunities shaping business in 2013 and beyond – and the IT that underpins these developments. In this article I shall be looking at five of the key ‘big issues’ that we, as business technology consultants, are helping our clients to address.
Global integration continues and economies around the world now respond in lockstep to a vast range of localised events and influences. According to a study from Ernst & Young, after a brief pause in 2009, globalisation has increased for the world’s largest economies and is expected to continue expanding through 2015. Given the growth projections of developing nations there is mounting pressure on developed economies to compete and even smaller businesses are being forced to reach out to a wider market. Which means revolutionising many IT and operational infrastructures: standardising systems infrastructures, improving global communications and supporting a global workforce with mobile applications.
Technology Driving Disruptions
Every business in every industry is impacted by – as Gartner puts it – the ‘nexus of technology trends’. While this has always been true it now strategic. The tension between legacy and emerging technology is impacting every environment that depends on technology: and that is just about everything, everywhere. As evolving technologies like Cloud Computing, Workforce Mobility, Social Media and Big Data come of age, they are converging to create new matrices of possibilities, challenges and disruptions.
Cloud computing is forcing a rethink of entire corporate technology infrastructures, and posing challenges about the pace and risks involved in this transformation. In terms of creating a new paradigm for business processes, its cannot be understated. However, there is an even biggest trend in play: The democratisation of how content is consumed and IT products and services are procured. For example, business tools like the iPhone and iPad are typically bought by departments, work teams or individual on a ‘BYOD’ (Bring Your Own Device) basis, which are then linked into the corporate data centre, application server, etc.
This increase in smartphones and tablets by a mobile workforce promises higher productivity, but it also creates information security challenges and requires a well-thought out enterprise framework for mobile strategies. No longer will a shortage of requisite skills or the risk of security breaches be an adequate excuse to prevent the development of mobile applications for customers and staff. Workforce mobility is here, like it or not, and it must not only be supported by encouraged.
CIO as BIO: Business Innovation Officer
The call for CIOs and their teams to be more business focused and strategically minded is not new, but 2013 could be a defining year. Today there is a higher than ever percentage of CIOs who are proactively leading the conversation with their business stakeholders around the use of innovative technology to improve processes, creating new revenue streams, improving customer satisfaction and enabling global expansion. In fact, the role of CIO has evolved to the point where a new title is gaining popularity: the ‘Business Innovation Officer’ or BIO.
As we speak, there are several forces bringing this trend to a head. In at least well-managed operations with mature methodologies, internal efficiencies and gains from outsourcing – those areas on which CIOs have traditionally focused – have already peaked. On the other hand, in order to achieve efficiencies and gain competitive edge in the current economic climate, while at the same time creating supportive environments for new working models, CIOs must think like entrepreneurs: they must have a sound knowledge of business processes and objectives, the technology needed to underpin these, and the leadership skills to ensure successful implementation.
The gap in perception between what business thinks the ‘magic bullet’ of technology can achieve and the realities of implementing new applications and transforming infrastructures has historically been one of the CIO’s worst frustrations. It is easy to say: ‘We must move our data centre to the Cloud and reduce IT costs by 25%’. But it is the job of the CIO to balance the opportunities and risks involved in IT budgeting, governance and information security and to be able to elucidate them clearly. At the end of the day the BIO must manage a constructive relationship with the business, pro-actively participate in business planning, define business-inclusive IT governance frameworks and much more.
Outsourcing for Labour Cost Differential
The days of outsourcing to achieve cost savings from wage differentials (outsourced labour being free of staff overheads such as pensions, etc.) are facing, and the trend is a return to insourcing. Yes, overhead, management and governance costs are significant and there is the issue of the local availability of an affordable and flexible workforce. However, this is balanced out by an inadequacy on the part of most outsourcers to demonstrate strategic business capabilities – after all, how can any service provider really be expected to deeply understand an individual business? A typical lack of diversity management (most large outsourcers are fairly monolithic) also makes value maximisation from outsourcing less likely, and in fact is riskier for the business. That said, there are other good reasons to outsource, such as the need to supplement skills, use specialists or to deploy new services and solutions quickly.
While this view may fly in the face of popular sentiment, we predict that social media – at least in the B2B arena – will soon begin to face the hard scrutiny of tangible results and will be found wanting. Consequently there will be a flight of the very subscribers that are the driving force of the social media platform. Investments in social media will be questioned, and the results will not stand up to value returned. The argument that social media functions as a vehicle for corporate awareness building and sentiment capturing vehicle may remain valid but not commensurate to the big spend involved. For small and new businesses, it presents a free or low cost entry to a mass marketplace, but will likely disappoint in the end due to its failure to drive business.
Having looked at our top five big issues: Globalisation, Disruptive Technology, the role of the CIO, Outsourcing and Social Media – what conclusions can we draw? We seem to be in the midst of a perfect storm of new global requirements, economic realities, emerging technologies and business transformation. Options proliferate and making sense of them all is far from easy. At the centre of this maelstrom stands the CIO – or BIO – who has never faced a greater set of challenges. But the opportunities, too, have never been greater.
- 7 Tech Trends CIOs Call Overrated (informationweek.com)
- Many CIOs moving beyond IT: survey (zdnet.com)
- IT Departments Have Become Completely Useless (businessinsider.com)
- State of the CIO Survey Shows Tech World in Flux (community.spiceworks.com)
- CIOs need strategy change to realise benefits of new enterprise tech (techcentral.ie)
- A new reality between the CMO and CIO (zdnet.com)