Who will disrupt the disrupters?

Transcription

1 When CIOs take control of the digital agenda, they can help their companies innovate and gain market share. We explore how. Ted G., CIO of a $10 billion company, just got off the phone with the European business unit VP, who told Ted he was about to launch a new mobile app. Who will disrupt the disrupters? Here we go again, Ted thought, again having to confront new plans that he hadn t been told about. If he wasn t dealing with the 90-day deadlines for delivering digital solutions or pilots, he found himself facing business unit leaders who d grown impatient for results and, like the VP, used external vendors to develop them. Learn to manage digital disruption before it disrupts you. The better the question. The better the answer. The better the world works. Of special interest to Chief information officers Chief technology officers

2 Ted had to admit that he and his organization simply could not keep up with the demand, nor could they continue on the current course. Instead of solving a problem, the current patchwork of technology was creating more problems, including cybersecurity risk, escalating IT costs and increasing technology debt. He knew he had to turn things around fast. It was crucial for Ted to find a balance between managing risks and costs and innovating in order to sustain growth and meet demands. CIOs are facing a new set of challenges in this digital era. To stay relevant, they must keep up with the digital needs of the business and their rapidly changing technology ecosystems. They must also address the growth of shadow IT (i.e., technology investments made without IT s involvement or knowledge) and its business risks, while dealing with increasing technology complexity and cost. CIOs who don t offer relevant digital business solutions face losing people and budget, as well as influence and credibility, ultimately relegating them to mere guardians of basic infrastructure. 2 5 insights for executives

3 In the digital era, opportunities are bountiful but brutal Meeting multiple targets while controlling costs and providing business value is crucial for CIOs. But without a strategic plan that stays in sync with digital technology and adapts as needs change, CIOs will continue to be circumvented, allowing innovation to happen via costly third-party vendors and creating a host of internal problems. Point solutions that can fix problems with a specific technology won t last, as they are often not integrated with enterprise systems, are not architected to scale and expose the firm to potential cybersecurity risks (and their legal and reputational consequences). Such hazards threaten the company and the department, as well as CIOs themselves, who could be undermined and removed as trusted leadership partners. Instead, the future is in designing technologies that can work together in dynamic ways, and IT departments must develop the ability to quickly and creatively design and integrate any digital solution. Business units will develop digital solutions with or without IT. The time is now, and the challenge will not wait Most CIOs feel as if they are already falling behind. According to a recent global survey of 2,300 CIOs, half feel unable to cope with the pace of change wrought by digital technologies; more than 40% feel that they don t have the talent they need. 1 Business leaders and employees expect IT to deliver the same rapid innovation, high-touch and high-quality experiences they have in the consumer world. This is driving many businesses to adopt a mobile-first strategy in which all new systems are developed on mobile platforms. 2 But that s not enough it s just one small piece of the larger digital landscape of expectations. Analytics and big data are other new elements driving digital. Currently, around 89% of companies believe that if they don t adopt a big data and analytics strategy in the next year, they risk losing market share and momentum. 3 What does all of this mean for the CIO? A focus on monitoring, evaluating and adapting to digital trends is absolutely vital. Digital disruption has demolished 52% of the Fortune 500 since 2000 (Constellation Research). 4 1 Gartner, Gartner Executive Programs Survey of More Than 2,300 CIOs Reveals Many Are Unprepared for Digitalization: the Third Era of Enterprise IT, 14 January 2014, 2 Gartner, Gartner Reveals Top Predictions for IT Organizations and Users for 2012 and Beyond, 1 December 2011, 3 Louis Columbus 84% Of Enterprises See Big Data Analytics Changing Their Industries Competitive Landscapes In The Next Year, Forbes.com, 19 October 2014, sites/louiscolumbus/2014/10/19/84-of-enterprises-see-big-data-analytics-changing-theirindustries-competitive-landscapes-in-the-next-year/. 4 Ray Wang, Digital Disruption Has Demolished 52% of The Fortune 500, softwareinsider.org, 17 February 2014, blog.softwareinsider.org/2014/02/18/research-summary-sneak-peaks- from-constellations-futurist-framework-and-2014-outlook-on-digital-disruption/screen-shot at pm/. 5 insights for executives 3

4 You re already being disrupted by digital. Don t let yourself be undone Left unchecked, the proliferation of digital technology and shadow IT can cause catastrophic problems, such as: Architectural quagmires Security vulnerabilities Inconsistent user experiences Disconnected business processes High levels of technological debt Diminished trust in technology leadership and delivery Lost business opportunities Stagnant innovation 4 5 insights for executives

5 CIOs must take control of the digital agenda CIOs must incubate the capabilities needed to rapidly prototype, deploy and evolve digital solutions. They must increase their agility so they can adapt more quickly to the accelerated pace of technology and market changes. These five steps will help you get started: Establish a digital center of excellence (COE) Here you can incubate the skills and capabilities you ll need to develop and manage digital solutions, as well as monitor trends, evaluate new technologies to keep pace with innovation and respond quickly to changing business needs. A COE will also help you: Bring together a multidisciplinary core team with digital skill sets and experience Establish a process for innovation that makes digital part of people s agenda Build user experience design capabilities and leverage journey mapping to envision your constituents digital interactions and experiences Develop a digital architecture capability Define IT s role within your company s digital agenda Closely align your technical core capabilities with your digital capabilities Create an incubation team that scans emerging technology for potential opportunities Establish a digital delivery organization Develop a multimodal organization that can tackle different needs for operating at different speeds, including: An agile team that can rapidly prototype new solutions for business value An industrial team that can productize the prototype solutions for sustained operations A responsive team that can track, test and innovate your technology constantly Manage the organization s perceptions Market IT s digital capabilities and services to the business Offer digital solutions that make employees lives easier and that help attract and retain the next generation of employees Communicate your successes and show them you can deliver the solutions required Digital architecture Establish CIO governance over digital initiatives Scrutinize ongoing and planned initiatives with an eye toward accountability, leveraging shared solutions and eliminating duplicate effort Digital innovation Experience design Implement new, agile governance processes that decouple technology governance from the annual budget so you can innovate and respond faster Establish controls over external vendors so their solutions will comply with your standards prior to deployment Digital (mode) delivery Digital COE CIO governance Communicate digital solutions launches 5 insights for executives 5

6 Digital disruption can make or break the future of your business and your career. Act now Digital presents a great opportunity for the CIO to have a seat at the table and play a pivotal role in defining business strategy and delivering solutions that drive differentiation and competitive advantage. However, if you delay identifying, integrating and improving your digital ecosystems, you will miss new business opportunities and efficiencies something that will undermine your position and give the edge to the competition. IT organizations have an opportunity to disrupt rather than be disrupted by new and emerging technologies by being proactive. 6 5 insights for executives

7 Want to learn more? The answers in this issue are supplied by: Greg Jenko Leader, Digital and Emerging Technology David Jensen Principal, Disruptive Innovation Leader, Ernst & Young LLP Paul Chabot Mobility, Digital and Emerging technology Subbu Natarajan Architecture Lead, Digital and Emerging technology For related thought leadership, visit ey.com/5. 5 insights for executives 7

8 EY Assurance Tax Transactions Advisory About EY EY is a global leader in assurance, tax, transaction and advisory services. The insights and quality services we deliver help build trust and confidence in the capital markets and in economies the world over. We develop outstanding leaders who team to deliver on our promises to all of our stakeholders. In so doing, we play a critical role in building a better working world for our people, for our clients and for our communities. EY refers to the global organization, and may refer to one or more, of the member firms of Ernst & Young Global Limited, each of which is a separate legal entity. Ernst & Young Global Limited, a UK company limited by guarantee, does not provide services to clients. For more information about our organization, please visit ey.com Ernst & Young LLP. All Rights Reserved. We want to hear from you! Please let us know if there are subjects you would like 5 insights for executives to cover. You can contact us at: 5series.team@ey.com SCORE no US BMC Agency GA 0000_05164 ED None This material has been prepared for general informational purposes only and is not intended to be relied upon as accounting, tax, or other professional advice. Please refer to your advisors for specific advice. ey.com/5