I have good news for the CIO community: Senior executives at leading companies are getting the message that leveraging information and technology to improve competitive advantage changes the dynamics of the enterprise and must be at the core of every corporate strategy. Here are a few examples.
- The board of ANZ Bank in Australia hired Filippo Passerini, former CIO of Procter & Gamble and currently an operating executive with The Carlyle Group, and three other IT thought leaders to provide advice on technology trends.
- A digital collaboration team at Disney increased 2015 revenues by 20 percent by developing the MagicBand, which enables Disney guests to enter the park and their hotel rooms, make dinner reservations, preorder meals, reserve rides, and more with the wave of their hand — significantly improving the customer service experience.
- David Finnegan and his enterprise digital collaboration team developed a new business model at Build-A-Bear Workshop that enables guests to interact with digital workstations while they're creating their stuffed animals, providing a unique customer experience.
As CIO, you need to ensure that your company's strategic plan focuses on creating digital awareness, forming digital innovation teams, and developing digital opportunities, as shown in the "digital innovation collaboration model" here.
Why is this important? Here are three reasons:
- The consumerization of IT, the Internet of Things (IoT), the digital economy, and disruptive technologies continue to change how companies compete.
- Your C-suite colleagues are likely inundating you with questions about the shifting landscape, and how information and technology can create unique customer experiences that increase competitiveness.
- The executive team is looking to you for advice on how to make the use of mobile devices, social media, cloud, and other technologies part of the company's business strategy, not just its IT strategy. They are coming to you, the CIO, to help them understand how all these technologies work and how to incorporate them into the business to improve customer value.
IT organizations can lead this initiative if done strategically. Using the digital innovation collaboration strategy, IT organizations can develop a collaborative process that enables teams to work together more effectively to develop new and improved products and services that create unique customer experiences. Today, companies have to view the entire ecosystem, across the entire value chain to achieve such innovation. The digital innovation collaboration model provides the ability to look at processes from a unique perspective and develop three main competencies.
The 3 competencies of digital innovation
First, the CIO and IT leadership team must create digital awareness across the enterprise. This involves understanding how disruptive technologies change the way we shop, interact and behave. IT organizations can facilitate this by sponsoring a "digital symposium" for the executive team, where thought leaders with real-world experience share the challenges and opportunities involved in leveraging disruptive technologies in innovative ways. Executives need to understand how technology creates real business impact, fosters innovation, and enables the ability to effectively store and share information across the enterprise. Following are some examples:
- Business impact: According to a recent Forbes article, the digital economy will add more than $1 trillion to the global economy by 2020.
- Technology innovations: ANZ bank hired IT thought leaders to advise the board on technology innovations. Passerini, one of the four advisors, told me the CIO and COO convinced the board to hire thought leaders.
- Knowledge base: McKinsey's Digital Labs has an extensive knowledge base that helps clients deliver breakthrough products, experiences, and businesses.