Free Enterprise Software On The Horizon

Free software in exchange for dataHubSpot's announcement of a free CRM suite coming in 2015 may be a harbinger of change for CIOs.

The digital economy is different from the economy of our parents' generation: Everything moves faster; customer expectations evolve almost overnight; new digitally enabled products open new opportunities; companies can scale at a pace that would have been impossible twenty years ago; and data has tangible value.

Now that companies like Salesforce.com have proven the cloud-based software model, CIOs embrace software-as-a-service (SaaS) as a viable option. The idea of paying for only what you use entices CIOs as budgets are squeezed. With a SaaS model it is much easier for CIOs to pass along software costs to each business unit P&L or departmental budget.

But why would a rapidly growing company like HubSpot — a provider of inbound marketing tools to the SMB market — launch a new CRM solution as a “freemium” offering?

The answer lies in one of the key changes brought about by the digital economy: Customer acquisition trumps revenue generation when establishing a digital business — revenue generation will come later and not necessarily from traditional sources.

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The US Federal Digital Services Playbook

Last month I wrote a short blog post introducing the new US Digital Services Playbook. I'm happy to announce that we're going to be publishing a series of short reports that take a closer look at the CIO's role in implementing the plays in the playbook.

The first of these client briefs, published today, summarizes why we believe CIOs should study the playbook and incorporate its plays into their team's standard operating practices.

The remaining briefs will take each of the four play categories and drill down into the implications for the CIO and their teams.

The US digital services playbook's thirteen plays

The CIO, CMO, And Digital Leadership

digital business demands a healthy CMO CIO partnershipThe 2014 CMO/CIO Survey in conjunction with Forbes offers an opportunity for your voice to be heard in our research.

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The Future Of Government Is Digital

Last March, we published The Future Of Business Is Digital and predicted that all businesses must evolve to become digital businesses. Since then, many CIOs in government agencies have asked about the role of digital in government. And yesterday, on The White House Blog, the president made it clear where he stands: The future of government is digital!

In announcing the creation of the US Digital Service, President Obama is reinforcing the need to bring greater agility to federal technology management in service of citizen taxpayers who foot the bill.

"A core part of the President’s Management Agenda is improving the value we deliver to citizens through Federal IT. That’s why, today, the Administration is formally launching the U.S. Digital Service. The Digital Service will be a small team made up of our country’s brightest digital talent that will work with agencies to remove barriers to exceptional service delivery and help remake the digital experience that people and businesses have with their government."

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For CIOs The Journey To Digital Business Begins With The BT Agenda

Digital FootprintIn “Unleash Your Digital Business”, I highlight the need for all companies to embrace digital business as a new business model – one in which the nature of the value exchange with customers is fundamentally changed. Since then, CIOs frequently asked me what they should be doing to help their firms become a digital business.

The answers lies in the difference between Business Technology (BT) and Information Technology (IT). BT focuses on the systems, technologies, and processes to win, serve, and retain customers. Whereas IT focuses on the systems, technologies, and processes to support and transform an organization’s internal operations. To become a digital business CIOs must adopt the BT agenda.

Our research on digital business highlights the need for the organization to focus on six core digital strategies that drive digital customer experience and digital operational excellence in support of customers. Each of these strategies is an integral component of the CIOs BT agenda:

  • Digitize the end-to-end customer experience
  • Digitize products and services inside the customer’s value ecosystem
  • Create trusted machines
  • Digitize for agility over efficiency
  • Drive rapid customer centric innovation
  • Source enhanced operational capabilities within a dynamic ecosystem
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Digital Business 2014 Infographic

Following the adage "a picture is worth a thousand words" we produced this infographic to support my keynote speech at the Technology Management Forum in Orlando (and the CMO CIO CX breakfast in Sydney). If you'd like to see the keynote, I'll be delivering it again at the London Technology Management Forum in June. Feel free to tweet and share the unedited graphic. (Click image to download a higher res PDF; also free to share unedited).

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Getting The Right Digital Leadership

It's clear that digital leadership is needed to achieve the transformation to a digital business. But does a company need a single digital leader, or do all executives need to become digital leaders?

Last month I published a report on digital leadership that examined the DNA of early digital executives. From this research, we learned that all digital leaders must be able to deliver on digital competencies across three dimensions: strategic, transformational, and operational. The degree to which digital leaders need to emphasize each depends upon the organization's digital maturity (see figure).

What is clear from our research into digital business is that your business needs both the CIO and the CMO to join forces to enable the transformation to a digital business. In conjunction with Forrester's Forum For Technology Management Leaders, we'll be revealing a new piece of research on digital business in 2014. This research digs into the data to reveal that state of digital business across a range of industries — identifying who is currently leading digital initiatives. As well as delivering a keynote at the Forum based on "Unleash Your Digital Business," I'll also be presenting a track session that gets deeper into the question of digital leadership to help you answer the question of who should really lead digital business transformation.

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Unleash Your Digital Business

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

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The Future Of Business Is Digital

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).

Forrester data on digital readiness

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.

Dynamic Ecosystems Of Value

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2014: Digital Reality Sets In

2014In my post at this time last year I wrote of the changes we could expect in 2013 around the shift toward digital business. And indeed we did see a significant move toward digital business in 2013 - a transition that’s still very much just beginning.

But 2014 will be different. 2014 is when digital reality begins to sink in for CEOs around the world. And if your CEO doesn't figure out digital business this year, I predict 2015 will be a very challenging year for your organization, no matter what business you are in.

The Retail Conundrum

A recent Wall Street Journal article highlights the challenge of retailers very well. Store footfall is declining as consumers' lives become more digital. We are seeing a steady shift toward shopping online and shopping less often. So how can today’s retailers survive? The simple answer is that many will not. Retail will undergo a seismic shift in the next 10 years. And since retail is a major employer, it's a shift that will impact us all.

Time drives behavior. Digital tools extend the workplace into our private lives, allowing greater productivity while also creating fewer opportunities for large chunks of time to “go shopping.” We are increasingly using digital technologies to optimize how we fill our days for work and pleasure:

•  Digital scheduling tools like Google Calendar help us plan our work and play time.

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