In a previous article called Who says CIOs can’t change industry? I challenged the perception that many organisations have about CIOs needing industry experience. Part of my argument was that to become a market leader a business needs to do things differently, to stand out from the crowd. Recruiting people from outside your industry brings fresh thinking, new ideas and different approaches to your business. So, my argument went, why not look to other industries for your next CIO, particularly if you believe technology can be a differentiator.
Whilst that last statement was a useful shorthand way of making an important point in the context of the article, it is actually misleading; unless you are a technology company, technology will not differentiate your business nor will it make you a market leader. Rather it’s what you do with technology – the solutions you build with the technology you have at your disposal – that will create differentiation. Now this may sound like semantics but it is a very important point that is often misunderstood at all levels of the business from the Board downwards, including some CIOs.
Market leading technology is not the same as market leading solutions. You may not need market leading technology to gain a competitive advantage in your market. You may not even need the latest technology to create market leading solutions. The key to creating differentiation is designing solutions that will give you a competitive advantage and then building these with the most appropriate technology. And cost as well as technical criteria will drive the decision as to what is appropriate for your business.
Too often organisations think that to become a market leader you should be using the latest technology or following current trends. The implication being that all you have to do is, say, move to the cloud, implement big data or go mobile and you’ll be successful. If that were true then everyone would be doing it and if everyone in a market is doing the same thing then where is the differentiation? You can’t all be market leaders. If you follow this approach then it is likely that your investment will have limited or no return. This is without doubt one of the reasons why Boards get frustrated with IT. The best technology, if not appropriate or if wrongly applied, will not create differentiation or give you a competitive advantage. It may even damage your business.
Becoming a market leader or creating competitive advantage starts with the business needs and not the technology. This means looking at the organisation’s vision and strategy, objectives, business model, products/services, customers and competitor offerings and using this to identify the big ideas that will put your business ahead of its competitors. Your big ideas will need new or enhanced capabilities to bring them to life. And these capabilities will be enabled either in part or completely by new or enhanced solutions. It’s at this stage that the appropriate technology can be selected – once the market leading capabilities and solutions have been identified. That’s not to say of course that technology can’t be used to prompt the discussion about the big ideas or to stimulate ideas about enhancing products or services. But the process shouldn’t start with a decision about adopting a certain technology.
Leading this process is a natural space for CIOs to move into as part of the evolution of the role. The CIO has a unique view of their organisation; this end-to-end view allows CIOs to gain an unparalleled understanding of the people, process and technology issues spanning the full business lifecycle. The importance of technology within business, the availability of technologies such as cloud and the maturing of service providers is shifting the skills required to be a CIO away from the purely technical to include a much broader range of business skills. The broader skillset of a modern CIO means CIOs can play a key role in the identification and creation of differentiators that will help to establish a market leading position. The skillset of a modern CIO means they are also ideally placed to lead the transformation process required to embed differentiators within the organisation. Although of course this will be a technology-enabled transformation, not a technology-led one.
Technology can play a major role in achieving differentiation and becoming a market leader. However, technology on its own is not a differentiator. Businesses that understand how to design and create market leading solutions based on appropriate technology will achieve differentiation. And those that use technology to enable their big ideas, rather than in place of big ideas, will become market leaders.