The Apigee Institute recently published the results of research it conducted into the factors that contribute to a successful digital transformation. The report contains some interesting insights for CIOs which can be viewed as opportunities, threats, or both.
The research, which was based on a survey of 321 executives based in the US, the UK and India and representing a number of business functions, identified three key principles that organisations must adopt in order to become a digital leader: make and broadcast company-wide commitment to digital transformation; appoint a senior leader with four key transformation leadership skills; and build the capacity to experiment.
The opportunities and/or threats for CIOs are contained in the second and third principles. Of the organisations that were found to be digital leaders – those in the top two quartiles of digital performance – over 80% had appointed a senior executive to lead their digital transformation initiatives. For the organisations that fell into the third quartile of digital performance this proportion fell to 54% whilst of those in the bottom quartile only 42% had appointed a senior leader.
These results will no doubt be interpreted by some people as proof of the need for the Chief Digital Officer position, or perhaps that the CMO needs to be given a more prominent role. But the research showed that just 7% of organisations that responded to the survey had a CDO leading their digital transformation, whilst another 8% said their CMO was in charge. The most popular choice for overseeing digital initiatives was the CEO (30%). However, 26% of organisations had appointed their CTO to lead their digital initiatives whilst 22% had given this task to their CIO.
The respondents were also asked to assess the person heading up their digital transformation against a number of traits. From these responses Apigee concluded that the executive leading digital initiatives must have the ability to:
- Manage across departments effectively;
- Build a strong network of business and technology innovators;
- Simplify complexity; and
- Adapt to change and be flexible.
CIOs should already have many, if not all, of these, skills as they are increasingly required for their day jobs in the digital age. With increased technology spending outside of IT, CIOs need to be able to influence and manage stakeholders across multiple functions. Developing and using networks across the business as a source of innovation will also become a key element of the role in the digital age as, with the rest of the business becoming more tech-savvy, many ideas for innovative uses of technology will be surfaced outside of the IT function. Similarly, CIOs have always been required to explain complex concepts and solutions in terms that non-technical people can understand (although many still struggle to do this). And, with the rate of change in technology (and hence their roles), CIOs certainly need to be adaptable and flexible to survive.
And therein lies one of the opportunities: the skills required to lead a successful digital transformation are a subset of the skills required to be a successful CIO in the digital age. CIOs that either have these capabilities, or who can quickly acquire them, will be well-placed to grow their remit and become a key figure in their organisation’s digital future. But for those who will struggle to develop these new skills and ways of working, the future may not be so bright.
The third principle within the framework highlights that organisations that have successfully transformed into digital businesses have built what Apigee have called a capacity to experiment. This means they have the right combination of culture, governance and technology in place to quickly launch small initiatives, measure their effectiveness and then migrate the successful ones to an enterprise scale. But, according to the survey, 55% of organisations in the third and fourth quartiles described their technology as a “liability” that was hindering their digital transformation. And, perhaps more interestingly, 42% of businesses in the upper two quartiles had the same view of their systems.
And so we have the second opportunity or threat for CIOs: if an organisation does not have a platform that enables it to quickly try new ideas and then scale-up the successful solutions, then it could well hold the CIO responsible for its lack of digital progress. It is likely that such organisations are the businesses that have appointed other executives to lead their digital transformation and may well be bypassing their IT departments in favour of working directly with vendors of IT services. But CIOs that have a platform that can support the need to experiment are likely to place themselves at the forefront of digital initiatives as a key enabler and shaper of the change process.
There is no doubt that the digital revolution is presenting the CIO role with many challenges. To meet the needs of the digital business CIOs have to develop both their own capabilities and the organisation’s technology platform. If they can achieve this then the digital world will be full of opportunities.