I had the pleasure of conducting a Digital Maturity Assessment workshop with a colleague from Forrester Consulting for about 20 companies in Sydney recently. The majority of participants were from the Australian financial sector, with heavier representation from marketing departments than technology management. While the session was an abridged one intended to discuss, understand, and determine where the participants were on their digital business journey, it was productive and revealed that:
Participants knew what to do with digital business transformation, but struggled with how. Participants had started on the digital transformation journey, but needed to address cultural and organizational gaps to fully drive transformation. These issues include who owns the digital transformation agenda (does it sit with the CIO or CMO?), how to bridge the communication chasm between the CIO’s department and the lines of business, and how to measure results to drive transformation in a positive direction.
Here at Forrester we are busy planning our upcoming Forum For CIOs And CMOs. With a theme of “Building A Customer-Obsessed Enterprise” the event explores the partnership between marketing and technology leaders. But what about our government clients? The role of marketing is associated with the private sector. Companies employ marketers to identify their target markets and the opportunities for providing goods and services to them. Public-sector organizations don't typically have the luxury of choosing their target market or their products and services. Or at least that’s what most organizations think. But even if that is the case, it doesn't mean that these organizations shouldn't get to know their "customers" and understand how best to meet their needs. While the service might be prescribed by legislation or regulation, public organizations can influence the customer experience, and the rising focus on citizen engagement mandates they do so.
Every business and industry faces digital disruption today. Digitally empowered customers demand a much higher level of customer obsession to win and keep their business, and they are forcing firms to redefine their business models. Whether you are in banking, insurance, financial services, education, media and entertainment — essentially, in any industry — digital technologies will disrupt your business. Nevertheless, our research shows that firms currently favor a bolt-on digital strategy over digital transformation, but this will drive only limited value from their digital investments. Digital strategy is not about adding a new mobile app or building a social media presence. It requires a fundamental shift in business strategy, responsibilities, technology capabilities, and organizational structure.
Against this backdrop, Forrester is holding its third series of CIO Summits across Asia Pacific in August and September. The India summit is on August 21, 2014 in Mumbai with the theme of: "Beyond IT: Empower Digital Business In The Age Of The Customer." Just like last year, we expect around 150 CIOs to attend the event. The Summit will focus on the significant shift we’ve seen in CIOs' traditional focus — from the design and deployment of internal systems focused on process control to digital products and services for their customers. Of particular importance on the digital journey are three domains:
- Customer experience.
- The mobile mind shift.
- The transformation of big data into actionable business insights.
It’s hard to believe almost a year has passed since our last Summits for CIOs in Asia Pacific. Our team is ramping up preparations to this year’s CIO Summit series and I’m looking forward to meet you at the events which will kick off in Sydney on August 14, Singapore on August 19 and Mumbai on August 21. Themed “Beyond IT: Empower Digital Business in the Age of the Customer”, Forrester’s 2014 Summits will focus on the significant shift we’ve seen in CIO’s traditional focus from the design and deployment of internal systems focused on process control to digital products and services for their customers.
Of particular importance on the digital journey are three domains: customer experience, the mobile mind shift and the transformation of big data into actionable business insights. Each of these topics will feature prominently at the Summits with select analysts flown in to delve deeper into how CIOs can overcome some of these challenges through Forrester guidance.
In advance of next week’s Forrester’s European Forum For Technology Management Leaders in London (June 12-13), we had an opportunity to speak with Oliver Bussmann, one of our industry keynote speakers, about digital business and how UBS is responding to the challenges of digital disruption and to rising customer expectations.
Oliver Bussmann joined UBS in June 2013 as Group Chief Information Officer (CIO), responsible for the Group Technology organization. As Oliver will explain in his presentation on day 2 of the Forum, digital business transformation success in his view hinges on three key factors: A joint and strong partnership of IT and the business working together; creating a culture of innovation and entrepreneurship; consistent and authentic support of senior leadership to demonstrate by example that this transformation is real, necessary and appreciated.
I hope you enjoy Oliver's responses as much as I did, and do join us on June 12-13 to hear the full story!
Q: What is your agenda as CIO at UBS?
As CIO my job is to position IT as a business enabler, this involves understanding the firm's strategic priorities, and ensuring we strike the right balance between (1) managing the traditional IT functions to ensure a cost-effective, reliable and secure infrastructure and (2) focusing on strategic IT, driving transformational change through innovation, to increase revenue opportunities and deliver real value to our business.
I just published a report on CMO tech spending trends in India and what these trends mean for CIOs in the country. For this report, we surveyed 101 CMOs in India to understand business and marketing priorities, marketing spending on technology, key tech management challenges, and how digital engagement is shaping marketing technology trends in the country. Key highlights from the report:
The age of the customer demands that CMOs become customer-obsessed leaders. Indian CMOs’ top two business priorities are addressing the rising expectations of customers and acquiring and retaining customers; 87% and 85%, respectively, of those we surveyed indicated that these are a critical or high priority. Focusing on customers is not new for CMOs; what has changed is the pace at which customer expectations are rising.
CMOs are responding by driving their own tech agendas. Today’s customers want faster and better service — and CMOs are looking to technology to make that possible. Sixty-two percent of the Indian CMOs we surveyed plan to increase their technology budget in 2014, whereas just 41% of them actually managed to do so in 2013. About 30% of marketing leaders are gravitating toward establishing a technology department within marketing in order to become self-sufficient. They’re investing in mobile apps, customer analytics, and are looking for new suppliers in winning digital engagement strategy.
In my last post I outlined the research we just finished on digital transformation. Today I'd like to highlight the key takeaways for CIOs.
CIOs are destined to play a pivotal leadership role in the transformation of business to a digital business. The nature of business is changing and, in turn, the technology investment priorities of the past must change. The report - Unleash Your Digital Business - describes the dynamic ecosystems of value that drive customer behaviors and transform the linear value chain into a dynamic network supported by open APIs. CIOs must partner with CMOs to drive the business transformation needed to become a digital business. To survive, your business will need to embrace digital customer experiences within ecosystems of value, and digital operational excellence to drive the agility and innovation required to survive and thrive in the age of the customer.
Digital Is More Than A Bolt-on Strategy
Bolt-on digital is like painting go-fast stripes on a car; it doesn’t change the underlying business. To become a digital business requires fundamental enterprise transformation; something CIOs are accustomed to leading and shaping. The partnership with the CMO must be extended to create operational excellence through digital technology, augmenting customer value with digital products and services and driving rapid innovation across the business.
Dynamic Ecosystems Of Value Drive The Ability To Win Serve and Retain Customers
Your company is likely to face an extinction event in the next 10 years. And while you may see it coming, you may not have enough time to save your company.
Business leaders don't think of digital as central to their business because in the past, it hasn't been. But now your customers, your products, your business operations, and your competitors are fundamentally digital. While 74% of business executives say their company has a digital strategy, only 15% believe that their company has the skills and capabilities to execute on that strategy (see figure). These are just some of the findings from our latest research (Forrester clients click here).
For the past few years, companies have been bolting “digital” onto their existing business like teens paint go-fast stripes onto their cars. “Look, we’re digital” is the message CEOs want to send to investors. But the piecemeal strategy of bolting digital channels or methods onto the business is no longer sufficient. Instead, you must think of your company as part of a dynamic ecosystem of value that connects digital resources inside and outside the company to create value for customers. To do this, you must fully harness digital technologies, both to deliver a superior customer experience and to drive the agility and operational efficiency you need to stay competitive.
Over the past few months I have spoken with a lot of CIOs, customer experience professionals, marketing professionals, and BT strategists in both the public and private sectors in Australia about their organization’s or department’s mobile strategy. This culminated in a number of meetings in Canberra last week, where I got a great feel for how mobile strategies are playing out within the Australian federal government.
While there is a broad spectrum of maturity when it comes to embracing the mobile mind shift, the good news is that everyone I spoke with recognized not only how important mobility is to existing business processes, but also that mobile will transform their customer base and their organization.
It was interesting to note that the conversations I’ve been having with private-sector organizations about mobility usually involve both someone from the CIO’s department and someone from marketing (sometimes CX, sometimes management, sometimes channels). Mobile initiatives are generally partnerships; while the business side leads these initiatives, they also involve the technology department. In contrast, in the public sector the mobile initiative is often led by the technology department — and often by the CIO herself.
Forrester just published its “India Tech Market Outlook: 2014” report; here’s a summary. We expect the Indian economy to start recovering from the tough situation it faced in 2013. It will start picking up (albeit at a slower rate) in 2014 thanks to good monsoons, an uptick in exports due to the weakening of the rupee, and huge infrastructure projects in public transportation, housing, agriculture, and farming that we expect to take off once a new central government is in place. As a result, we’ve marginally increased our 2014 forecast from 7.4% to 8% in local currency. But the biggest threat to India’s economic outlook is political instability after the national elections, which could have a long-term economic impact.
The three most important highlights from the report:
Customer obsession will take center stage for technology spending. The increasing demands of digital customers are redefining business. Recent Forrsights data indicates that Indian CIOs’ top business priority is to address the rising expectations of customers and improve customer satisfaction; 87% consider it a high or critical priority. Business leaders want to leverage technology to better engage digitally enabled constituents, fundamentally shifting how firms interact with customers.