CIOs must operate at the speed of the customer

Fred Giron

Digital transformation is about reinventing the business model of your company. It’s an end-to-end transformation that moves at only one speed: the speed of the customer. Back-end systems are not immune from these pressures, somehow shielded from change as customer-facing systems and processes innovate quickly to keep up with fast-changing customer behaviors.

Forrester believes that the pursuit of two-speed IT (aka bimodal IT) is a trap for CIOs. My colleague John McCarthy recently published a report that explains why CIOs need a single, bolder business technology (BT) strategy to accelerate innovation and simplification, not a two-class system that adds more silos of complexity (Forrester clients can have access to the report here).

At a recent CIO event organized in Singapore with our partner Odgers Berndtson, we shared the results of this research and related case studies. The audience was in agreement with this call, best illustrated by two examples that were shared during the discussion:

  • Two-speed operations break the best unified customer experience intent. The head of digital for a life insurance provider mentioned how his team did a great job creating a digital only policy purchasing capability enabling customers to purchase a life policy within 15 minutes online. Unfortunately, it then takes about 2 months for the operational teams to come back to the customer with the actual policy due to slow back-end systems moving at yesteryear speeds. Once the complete engagement has been executed, most clients are lost.
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Envision 2016: Microsoft Pushes Beyond IT

Nigel Fenwick
Where was HololensThis week in New Orleans, Microsoft launched it's first conference aimed squarely at business leaders as the company looks to move beyond the department of the CIO. Envision 2016 replaces Microsoft's previous Convergence conference and comes on the heels of "Build2016" the previous week.
 
As a guest of Microsoft, I had two reasons to attend Envision: First, to hear from CEO Satya Nadella and other Microsoft executives; I wanted to better understand their business strategy going forward, specifically as it relates to enterprise customers. Secondly, I had the opportunity to provide feedback to Microsoft leaders on its enterprise marketing strategy.
 
It was no doubt clear to attendees that Microsoft wants a relationship with enterprise customers beyond the office of the CIO. Based on Satya's opening keynote, there is a recognition that Microsoft must become a more strategic business partner, helping today's CIO clients work alongside their line-of-business peers to deliver on the promise of digital business. 
 
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Businesses Need To Prepare For New Digital Realities

Dan Bieler

Photo: Bergmann

At Mobile World Congress 2016, GE outlined some fundamental insights about the digital transformation efforts of industrial businesses. William Ruh, CEO for GE Digital, a US$6 billion business of General Electric, shared valuable insights about the digital transformation process that industrial businesses need to tackle.

Businesses must focus on those activities that they can transform into digital business models. Not every industrial activity can become a digital business, but it will be impossible to succeed in digital transformation by developing a digital business and an industrial business and then operating them side by side indefinitely. GE sold 40% of its business activities because it felt that it could not transform them into digital businesses. For those industrial activities that can become digital businesses, executives need to be aware that:

  • Every industrial worker has to develop digital DNA. Industrial workers and mechanical engineers have to be comfortable interacting with digital systems. At GE, mechanical engineers have to design a locomotive in such a way that they can place a local data center inside it. Every industrial worker will have to have analytics skills, whether that’s the ability to create sensible and reliable data sets or to analyze and interpret these data sets.
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Digitizing The Car: Why Auto-Makers Are On The Wrong Track

Nigel Fenwick

Autocross

I’m a bit of a car nut. I love driving cars. So does my wife. We both autocross one of our cars most weekends in the New England summers (FYI AutoX is a great way to hone your driving skills and be a safer driver). We love our cars and I’m pretty passionate about the whole driving experience.

As a car junkie, I love the fact that automakers are bringing digital experiences to their cars, but I can’t help thinking they are going about it all backwards – or as we say at Forrester, from the inside out.

In my post from CES this year, I noted that every single automaker seems hell-bent on making the car the center of their customer’s digital world. No doubt manufacturers hear the siren call of customer data; imagining all that they could do with such rich information. But it’s inside-out because, even for car-lovers like me, the car is not the center of my digital universe and I doubt it ever will be. Why? Because my car doesn’t go with me wherever I go. But you know what does? My phone.

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Accelerating Digital Business And Innovation In Financial Services

Fred Giron

From discussions with our clients in the financial services industry (FSI) in Asia Pacific, we’ve noticed that their digital agenda has changed dramatically over the past 18 months, shifting from a consideration of acquisitions and distribution channels to a broader business transformation imperative.

In fact, leaders at banks and insurance firms are increasingly realizing that:

  • Customer experience is fast becoming the only competitive differentiator.
  • Banks and insurance have to accelerate their ability to innovate and deliver new sources of value to customers faster. 
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Your Business Technology Strategy: Go Fast Or Go Home

Sharyn Leaver

CEOs and their leadership teams are at a crossroads as technology underpins virtually all customers’ expectations and unlocks new sources of customer value. The choice is rather straightforward: invest heavily in business technology (BT) to win, serve, and retain customers, or flounder under the weight of legacy IT.

The choice is obvious, isn’t it? We know and have proven that a better customer experience correlates with higher revenue growth. And what firm can claim immunity from the pressure of increasingly powerful customers wielding unbelievable technology power? 

This is no time to hedge. Strategies like bimodal IT that advocate for silos and two operating speeds may appeal to risk-averse leaders, but bimodal won’t get the job done. In fact, it works directly against the key operating principles of customer-obsessed firms in B2B and B2C industries like General Electric, Netflix, and USAA. These firms and other leaders use the customer as the central design point for their business technology strategy and strive to be:

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Managers Must Understand The Differences From Past Ways Of Doing Business

Dan Bieler

Photo: Bergmann

At Mobile World Congress 2016, GE outlined some fundamental insights about the digital transformation efforts of industrial businesses. William Ruh, CEO for GE Digital, a US$6 billion business of General Electric, shared valuable insights about the digital transformation process that industrial businesses need to tackle.

Industrial companies are very different from consumers: They don’t want to buy a great mobile or social experience; they care instead about business outcomes, such as lower energy consumption, faster cash cycles, or higher employee productivity. Digital transformation means that industry will do things differently than in the past.

  • Industrial firms will learn from the consumer world only up to a point. Industrial products are not developed, designed, and sold like consumer products. Uptime and longevity are critical in the mechanical-electrical world. Industrial products often have lifetimes spanning decades, rather than being replaced every two years like smartphones. Often, industrial equipment is not turned off for years, making ongoing software upgrades difficult. Moreover, the results of faulty industrial equipment like aircraft engines can be much more serious than for consumer products.
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The Next Decade Will Be About The Industrial Internet

Dan Bieler

Photo: Bergmann

“The industrial companies that can bring together cloud, open source, and real-time process management with industrial product cycles will be the ones that will win in the digital transformation process.”

William Ruh, CEO for GE Digital

At Mobile World Congress 2016, GE outlined some fundamental insights about the digital transformation efforts of industrial businesses. William Ruh, CEO for GE Digital, a US$6 billion business of General Electric, shared valuable insights about the digital transformation process that industrial businesses need to tackle.

Digital Transformation Is Happening And Offers New Opportunities

Companies that fail to embrace digitization won’t be able to compete in the next decade. William Ruh stressed that while the past decade was primarily about the consumer Internet, the next decade will be about the industrial Internet. Digitization offers one of the biggest opportunities in many decades to companies that are willing to change:

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Digital Innovation Labs For Customers: Do They Inspire?

Nigel Fenwick

EinsteinMany technology vendors tell me they have established digital innovation labs as a place to bring customers and inspire them. So I was wondering, have you and your leadership team visited such a lab? If so, I'd like to hear from you:

  • What did you like? 
  • What didn't work so well?
  • Were any of your expectations not met?
  • Did your team come away inspired?
  • If so, what did you do differently as a result?
  • What would you like to see more of?

Drop me a confidential note via Twitter @NigelFenwick, LinkedIn or email me (or simply comment below - not confidential).

(If you're a vendor with an innovation lab, send me a factsheet about your lab(s)). 

Thanks.

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Forrester’s FSI Summit In Singapore: Accelerating Digital Business And Innovation In Financial Services

Dane Anderson

A recent Forrester survey found that business leaders in the financial services industry (FSI) saw 34% of revenues in 2015 generated through digital products and services or products sold online. Their expectation is that this digital quotient will surge to more than half of their business by 2020, leading to a digital arms (and capabilities) race against a new breed of competitor. JP Morgan CEO Jamie Dimon accurately sums up the new competitive dynamic when he notes that “there are hundreds of startups with a lot of brains and money working on various alternatives to traditional banking.”

Our inaugural invitation-only summit in Singapore on Friday, April 15 will bring together an intimate group of senior executives from banks, insurance companies, and fintech firms to share Forrester’s latest FSI digital business research and facilitate a discussion with industry leaders. Our team of esteemed analysts will lead the discussion; here is a snapshot of the topics that will be presented on the morning of the summit:

  • Frederic Giron (Vice President and Research Director serving CIOs – Singapore): Accelerating Digital Business In Financial Services
  • Oliwia Berdak (Senior Analyst serving eBusiness and channel strategy professionals – London): How To Organize For Digital Financial Innovation
  • Randy Heffner (Vice President and Principal Analyst serving application development and delivery professionals – Dallas): APIs Take Center Stage In Financial Services
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