It's time to re-think the report card used by CIOs to report on BT performance – tomorrow’s BT CIOs must look beyond the traditional IT Balanced Scorecard (BSC).
I realize this is sacred ground for many people in IT (and some of my colleagues here at Forrester), so let me explain myself before I receive a barrage of complaints. The philosophy behind Business Technology (BT) recognizes technology as integral to every facet of every organization – as such, IT is very much an integral part of the business; we can no longer talk about “business” and “IT” as if referring to two distinct things. I’m suggesting that in the age of BT, we need a new scorecard that better reflects the impact of BT on the business.
Consider the following scenario: It’s a hot summer day and a prospective customer walks into your store to buy an air conditioner. He evaluates several models and then buys one — but not from you. It turns out your competitor located two miles away is offering the same model at a 20% discount. How did he know this? He scanned the product's bar code using the RedLaser app on his iPhone, which displayed several local retailers with lower prices than yours. If he had been willing to wait three days for shipping, he could have purchased the exact same model while standing in your store from an online retailer at a 30% discount.
This type of technology-fueled disruption is affecting all industries, not just retailers. Since the early 1900s, businesses relied on competitive barriers such as manufacturing strength, distribution power, and information mastery. But this is all changing in the age of the customer, where empowered buyers have information at their fingertips to check a price, read a product review, or ask for advice from a friend right from the screen of their smartphone.
To compete in the age of the customer, your business must become customer-obsessed. As Forrester’s Josh Bernoff (@jbernoff), SVP of Idea Development and author of Groundswelland Empowered, advocates in his latest research: “The only source of competitive advantage is the one that can survive technology-fueled disruption — an obsession with understanding, delighting, connecting with, and serving customers.”
As you may know, I recently was named the Research Director for our CIO team — a team of highly accomplished and experienced analysts at Forrester. One of our first tasks as a team was to define the current changes in the technology and business landscape and develop a cohesive view of what this means for the role of CIO. What will it mean to be a CIO in the “empowered” world? As you can imagine, this led to a healthy debate and many different perspectives on what the future CIO role would look like. Here are some highlights from our discussion so far.
What is changing for the CIO?
Technology plays an increasingly critical role in business success. In Forrester’s Forrsights Budgets And Priorities Tracker Survey, Q4 2010, 52% of the business decision-makers strongly agreed with the statement “Technology is fundamental element of our business model.” Many companies are starting to use technology as a business differentiator, and many businesses rely on technology to provide critical information for making strategic business decisions.
Empowered technologies make it easy to bypass IT. The empowered technologies — social, mobile, video, and cloud — are rapidly transforming the information landscape. Increasingly, these technologies are easy to acquire and bring into the corporate environment, and many can be sourced and managed outside of IT’s control — making it easy for the business and employees to bypass IT.