August 5, 2015

Change of Control: Consumerized Technology and the IT Organization

CIO Strategy Exchange, New York, 2012

Both the CIO role and IT organizations are being transformed by four interlocking and self-propelling forces: Consumerized technology, Competition on a global scale, Customer focus, and the Corporate restructurings that seems endemic today. Each force pervades its own arena and, simultaneously, impacts the others. We’ll call them the “4Cs” and discuss below.

    1. Consumerized Technologies have clearly penetrated the enterprise. Employee BYO phones from Apple and the Android crowd have displaced the former corporate standard, Blackberry. iPads are being issued to executive committees in companies that shunned the Mac. See CIOSE Report: Changing Everything [October 2011] Consumerized technologies, from tablets to social media, now determine everyone’s expectations. For better or worse, an exhilarating user experience and near instantaneous apps downloads have become the standard for enterprise IT deliverables. Such relatively new and demanding expectations are more taxing to organizations burdened with heavy legacy systems. It’s an oft-repeated theme throughout our CIOSE interviews.
    2. Competition is more relentless than ever before. Partly because it’s truly global; partly because it sometimes comes from new entrants parlaying the Internet without the baggage of traditional businesses. Amazon doubled and tripled its market share in general merchandise and electronics even while increasing its already-dominant presence in books and ebooks. Apple redefined both music distribution and newspaper subscription sales. Google is sweeping up a massive share of conventional advertising. And Facebook absorbs a large segment of broadcast TV viewership.
    3. Customer Focus was always a corporate mantra, but has now taken on real urgency as new companies drive relentlessly to commoditize every previous advantage of established businesses. It’s a threatening reality that makes “sticky” and strong customer relations paramount. And forces material changes both in IT systems and the overall enterprise, as the member snapshots clearly demonstrate. In many businesses, presenting a “single face to the customer” provides an enormous advantage. This matters most when a variety of products and services can/should be sold to the same customers, as in banking, insurance, transportation, etc. But it requires enterprise-wide adjustments in both systems and organization. Line of business (LOB) stovepipes must give way to a cross-silo view across many products and services. Consumers are simply unwilling to reenter the same information five times to acquire five products or services: Or to speak with five different call center operators, none of whom appreciates the overall value of the business. Even better than a “single face” call center is an online experience intuitive enough to avoid human intervention altogether. But when intervention is needed, it should be immediate, knowledgeable, and positive. The onrushing spread of mobile devices equipped with speech recognition will make those needlessly repetitive processes even more frustrating and annoying. The time for remediation is now.
    4. Corporate reorganizations are a perennial in American business, of course. But their incidence has exploded. Real transformations are being ignited, largely by Consumerization, Competition, and Customer Focus. One illustration is the willingness of line managers to transfer their clerical processes to IT-dominated Shared Services groups, a trend we first identified seven years ago in the CIOSE Report, Dancing Elephants. Another example is the current transition from vertical lines of business (LOBs) to a horizontal focus on overall customer relationships, as mentioned earlier.

Underlying the “4Cs” are other conditions that also must be weathered:

  • The ongoing need to reevaluate and upgrade IT resources, particularly personnel;
  • The growing comfort with IT among a younger, more tech-savvy executive cadre. This is a double-edged sword, given their expansive expectations; and
  • The ever-increasing virulence of cyber espionage attacks from various nation states, organized crime, and elsewhere.

All this adds to the existing churn and unpredictability of IT environments today. None of these phenomena are unfamiliar to you. And as we march through the caselettes, they’ll be mentioned again…and again.