CIOs must operate at the speed of the customer

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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Accelerating Digital Business And Innovation In Financial Services

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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Predictive Analytics Requires A Customer-Obsessed Innovation Culture

Over the past month, I participated in predictive analytics events in Indonesia and Thailand organized by SAP with about 70 regional CIOs. There is a palpable excitement around predictive analytics these days, but I see a risk that, beyond the excitement of the demo and first implementations, a number of these advanced analytic tools remain shelfware. Why? Because tech management teams often struggle to realize the business value of these investments.

With this in mind, my presentations focused on why companies need to approach analytics with a new mindset: The business discipline and technology to harness insights and consistently turn data into effective action. My colleagues Ted Schadler and Brian Hopkins call the resulting business capability a system of insights. This approach received a lot of positive feedback from the audience and generated discussions on how it can solve their key data & analytics challenges:

  • Ensure strong business support. Many CIOs I have talked to complained that they lack business support, because business sees data & analytics as a technology responsibility and they simply do not want to get engaged. My recommendation to them: stop talking about Big Data and start focusing on business outcomes like improved customer loyalty. That’s where the System of Insights concept can help. Actually, one of the CIOs, part of a large Indonesian conglomerate, told me that this approach would really help him explain how business and tech teams need to collaborate to turn data and insights into actual business value.
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TCS’ CrewCollab Solution Fills a Gap In Airlines’ Digital Transformation Journey

Earlier this week, TCS launched its CrewCollab Solution at the Singapore Aviation Festival. The sector has attracted a lot of investments from service providers lately with companies like NIIT Technologies, Pactera, Hexaware and others strengthening their portfolio of software assets for airlines. The TCS CrewCollab mobile solution – co-developed in partnership with Singapore Airlines – fills an important gap in the digital transformation strategy of airlines globally. Why is that?

  • The in-flight experience remains disjointed from the rest of the customer journey. Airlines like Delta, United and Emirates have already invested in developing successful digital customer experience initiatives covering the pre- and post-flight phases of the customer journey. However, airlines typically struggle understanding and serving their customers as they board the flight, customer data being seldom available to the cabin crew.
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Carefully Navigate Malaysia's Jungle Of Service Providers

While Malaysia's tech services market is mature compared with other fast growing ASEAN markets like Indonesia, it remains very fragmented. Some vendors also tout capabilities in technology services that fall outside of their core competencies and for which they have not yet developed a strong track record. The fast-rising digital expectations of business stakeholders are making it increasingly difficult for client organizations to find the right partner for their requirements. In a new report, my colleague Zhi Ying Ng and I provide a detailed analysis of the leading consulting and technology service providers in Malaysia. Here are a few high-level recommendations when choosing a service provider in Malaysia:

  • Reset your expectations when engaging with local service providers. Organizations looking to expand in Malaysia will find it beneficial to tap into these providers' local knowledge and experience. However, companies looking for sophisticated skills — like those related to enterprise applications — should be aware that providers might lack experience even though they claim otherwise. As such, it is crucial that enterprises set a clear strategy based on the goals and objectives that they want to achieve, together with a road map that aligns services sourcing with internal capabilities before beginning such engagements.
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Singapore CIOs Look Beyond IT To Enable Digital Transformation

I cannot believe it’s been a month already since the Forrester CIO Summit took place in Singapore. As usual, it was a great forum to exchange views with you, Singapore-based and other regional technology management leaders, on what is keeping CIOs busy these days: the digital transformation of their enterprises. Following these exchanges and my recent discussions with CIOs in Singapore and beyond, it is clear you understand that:

  • The power has shifted into the hands of your customers. Dane Anderson kicked off the Summit by making the case that the balance of power has shifted from institutions to always connected and technology empowered customers. To remain relevant as CIOs to your business stakeholders, you must shift your focus from the design and deployment of internal systems focused on process control to enabling digital products and services for more effectively engaging your customers.
  • The future of business is digital. My colleague John Brand then explained what makes a digital business. Companies like Alibaba and Burberry are digital businesses because they excel at integrating the two sides of digital strategy: creating leading digital customer experiences AND agile digital operations in service of customers.
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Look Beyond Traditional Service Providers For Your Digital Transformation Journey

In a recent report on next-generation services, I give several examples of how tech services firms are reinventing their operating models and value propositions to provide a new path to digital transformation to their clients. Interestingly, many such initiatives are coming either from very large service providers like Accenture or from small specialists like VMob, Bluefin Solutions, or Point of Origin. Small service providers’ next-gen service value proposition is starting to catch the interest of large clients too. A few weeks ago, VMob announced a major deal with McDonald’s in Japan wherein the company will leverage the VMob solution for its 3,200 restaurants in Japan.

The next-generation services report highlights the key tenets of these new digital transformation offerings. In this customer-controlled, digital world, successful tech services companies will bridge the gap between technology and business outcomes for their clients. In other words, it is not just about implementing a new technology solution anymore. It is about helping clients harvest the power of digital technologies and achieve specific business outcomes like growing revenues, reducing operating costs, or mitigating risks. This is where next-generation service providers like VMob, Bluefin, and Point of Origin get it. As leaders in the new services world, their approach is fundamentally different from the traditional tech service providers, as they:

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Bridging The CIO/CMO Disconnect In Asia

It’s a fact: Marketers in Asia purchase digital technologies without involving the tech management department. They do it because they believe that:

  • Digital technologies are key enablers of successful marketing strategies. Customers in Asia Pacific in general, and in Singapore in particular, are always connected and empowered by technology to access the right information in their moments of need. They increasingly value — and do business with — organizations that provide them with experiences that are effective, easy, and emotional across all customer touchpoints. It’s not a surprise, then to see marketing professionals — just like their colleagues in sales, product management, and customer service — source digital technologies to enable such experiences.
  • The tech management department hinders their business success. This is the more worrying part, but if you take a step back, as a technology management professional, you understand why. You work with technology life cycles that are oriented toward core business, back-end systems like enterprise resource planning and therefore are risk-averse and slow. However, marketers need tech management professionals who are open to innovation, experimentation, and moving toward a risk-tolerant, agile life cycle that supports digital experience delivery.
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Next-Generation Services Create New Sources Of Competitive Advantage

Companies understand the urgency of ramping up their business technology (BT) capabilities to help the business innovate and grow. Increasingly, they realize that they cannot do this alone and firms will require partners that can help deliver agile services that bring fast and predictable outcomes to the business. For instance, Bharat Light and Power (BLP), one of the largest clean energy generation companies in India, signed in late 2013, a 10-year engagement with IBM to build a new business capability that aims at nothing short of transforming the utility sector in India. In a few words (more details are available in this report), BLP and IBM are creating an open energy service platform that will help BLP understand how to optimize the utilization of its wind turbines. The really interesting part for me lies in the way the company intends to leverage the information generated by this platform as the basis of its competitive advantage. The energy service platform will indeed act as an expertise repository that BLP can leverage to:

  • Increase the value of its own assets. As the company operates, grows, and optimizes its own asset efficiency, it learns how the climate, power grid, and wind turbines influence a vital business metric for a utility company: the plant load factor (PLF). This will allow the company to generate more revenues from its existing assets.
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Banks In Singapore And Hong Kong Must Step Up To The Cloud Challenge

Last week I presented an overview of cloud adoption trends in the banking sector in Asia to a panel of financial services regulators in Hong Kong. The presentation showcased a few cloud case studies including CBA, ING Direct, and NAB in Australia. I focused on the business value that these banks have realized through the adoption of cloud concepts, while remaining compliant with the local regulatory environments. These banks have also developed a strong competitive advantage: They know how to do cloud. Ultimately, I believe that cloud is a capability that banks will have to master in order to build an agility advantage. For instance, cloud is a key enabler of Yuebao, Alibaba’s new Internet finance business. 80 million users in less than 10 months? Only cloud architecture can enable that type of agility and scale (an idea that Hong Kong regulators clearly overlooked).

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