Caution! Don't become a digital business dinosaur.
Only three of the top 10 firms on the Nasdaq in 1999 were still in the top 10 in 2015, according to Forrester’s report titled “Unleash Your Digital Predator.”
With companies like Blockbuster and Borders falling prey to new and evolving digital markets, the evidence is clear. Digital innovations are upending the market, shifting consumer expectations about the way products and services are communicated, delivered, and supported.
This likely doesn’t come as news to CIOs and other IT leaders—according to Forrester, 89% of executives believe digital will disrupt their business in the next 12 months. It’s not just products and go-to-market strategies that need to change. Digital is changing the way businesses operate and accelerating that rate of change.
As organizations rush to implement digital strategies, Forrester found “less than a third of executives believe that their approach is correct, and even worse, just 21% believe that the right people are setting the strategy in the first place.” Digital initiatives must engage technology experts in the C-suite, like the CIO, to ensure success.
By focusing on the business value provided by digital touchpoints, the CIO ensures technologies are as flexible, scalable, and agile as the products and services they deliver. Whereas in the past, CIOs may have focused on maximizing operational cost-efficiencies, today this focus must shift to increasing return on digital initiatives. A recent Gartner report titled “Get Ready to Maximize Focus and Outcomes for Investments in Digital Business” discusses this shift in focus as well as the obstacles CIOs must navigate to be successful.
Three areas of caution every CIO should heed:
CAUTION: Gartner analyst Richard Hunter explains,“Enterprises with high levels of waste in their change initiative portfolios will carry those failure rates forward unless they change their approaches to making decisions about investments involving IT.”
One cause of this waste is technology spend that resides outside of IT’s budget. For executives, the fear of becoming a digital dinosaur greatly outweighs the fear of spending too much to become a digital business. But this increased spend isn’t always happening within IT’s channels. According to Gartner, it’s expected that 50% of total enterprise spending on IT will reside outside the IT organizational budget by 2020. CIOs taking the lead on digital transformation can create partnerships with other cost centers to ensure efficient integrations, promoting a better, more unified focus on digital business strategy.
CAUTION: The “absence of focus and strategy jeopardizes both efficiency and effectiveness of investments involving IT.”
Lack of focus and strategy often leads to failed initiatives, creating waste and reducing opportunities. In digital transformation, you can reduce waste and increase yields by better aligning technology investments to your enterprise’ most important outcomes. This alignment is best achieved when the CIO is able to do the following:
- Report on all technology investments, regardless of budget area.
- Make strategic decisions before project execution begins.
- Create investment portfolios to clarify outcomes, create strategic priorities, and simplify priorities.
Digital transformation presents IT with a unique opportunity to demonstrate business value. As technology leaders in this transformation, “CIOs have the opportunity both to increase the value of investments involving IT and to explicitly show IT’s support for cohesive execution of strategy.”
CAUTION: CIOs who don’t take advantage of this opportunity may find themselves on a sinking ship, overrun with failed technology initiatives and high levels of waste, while digital predators gain competitive ground.
Don’t become a digital dinosaur. Get started today. Download the Gartner report “Get Ready to Maximize Focus and Outcomes for Investments in Digital Business” to learn how other forward-thinking CIOs have transformed their operations to drive new opportunities for increased value.