Over the last 60 years, as the position rose from keeper of the data processing center to C-suite digital strategist, chief information officers have been presiding over ever-bigger and important empires. Some commandeer budgets today that are in the billions of dollars and workforces in the thousands.
It’s not surprising given how central information technology has become to the success and survival of big global companies. Yet many CIOs are beginning to play what arguably is their most important corporate role: helping their organizations understand where they fit in a digital world – i.e., their place in the evolving digital ecosystem, to use a term of growing popularity. But that simple statement masks the complexity of the question they must help the top management team answer.
Is an airline a transportation provider from City A to City B, the role they have largely played since 1914, when the first commercial airline flight touched down in Tampa, Florida? (If you’re a history buff, you can read about that here.) Or is today’s airline in the business of not only getting passengers from A to B but also solving their needs in City B? And getting to the airport in City A? And also solving the logistical challenges of moving through both airports? Airlines like KLM and Delta think this way.
Is a retailer just an outlet for selling consumer goods? Or does it need to be something more today, given that consumers have many ways to get those goods (including have them arrive at their homes)? Amazon has answered that question. It’s a retailer (online and brick and mortar, with Amazon Go and the Whole Foods acquisition). But it’s also a movie company. And a computing power rental company. (“Cloud vendor” is the proper name, and it added up to $26 billion in Amazon revenue last year – about what the Macy’s department store chain generated.) Oh, and Amazon has also become an advertising medium, joining the broadcast and publisher sectors. And not a tiny one; Amazon’s digital ad revenue was an estimated $10 billion in 2018.
So airline company as travel logistics provider. And retailer as goods seller + cloud vendor + TV producer + advertising channel. Could you have seen that happening 30 years ago, even 10? I doubt it.
The digital technologies of this decade and the next one will accelerate this trend: one of the industry boundaries erasing, products and services digitizing, and new digitally capable competitors fast intruding. That’s why TCS has launched its latest big research study – to understand how large global companies are determining where they fit in the digital ecosystem and the business models that will make them real revenue, not roadkill.
In particular, three technological trends are helping to fundamentally reconfigure industry boundaries:
· The explosion in powerful digital devices. Smartphones, digital watches, tablets, sensors connected via the Internet of Things and other “edge” devices enable companies today to interact with, monitor and guide customers wherever they are – on the road, in their stores, in a branch office or on a mountaintop. This requires virtually every company to be easy to do business with. That, in turn, means they need customer experience designers who can put themselves squarely in the customer’s shoes to create friction-free processes for taking orders and providing support after the sale. If your company can do that, many customers will want to buy products from you. Just look at the products Amazon (at its start, only a book retailer) has added to its burgeoning e-commerce product line over the years.
· The abundance of data and low-cost storage capacity. In the past, companies had far less data to collect and analyze. As well, they tended to keep the data they did collect in functional silos. Today’s enterprises gather a lot more data – far beyond orders – and in every business process (including marketing, sales and service) on what customers say (via social media) on what customers do (via geolocation data) and how their products are performing for those customers (via IoT sensors embedded in those products). The ability to harness such data has become a competitive advantage.
· On-demand computing power in the cloud. Along with the abundance of data comes ubiquitous access to other data and processing power via cloud computing systems (and, for mobile and IoT innovations, at high speeds thanks to 5G networks). Cloud-based systems also enable companies to analyze data from many sources through advanced and affordable applications. The machines can personalize data analysis for stakeholders like the CFO or CMO. With enormous amounts of computational power now at their disposal, companies need to think bigger about the kinds of immersive digital experiences they must now provide to customers.
The CIO is a key player in helping companies manage those technologies and plot what we call a “machine-first” digital path in a complex world. Our research will tell you how many are already playing this role and where their companies are heading in the dynamic world of digital ecosystems.
While many might not be driving the change, they all nonetheless have a great opportunity to be an important guide. We’re collecting this data in the month of May, surveying 1,000 CIOs and other IT leaders in large North American and European companies in 11 major industries. We’ll also be interviewing a number of these people to deeply understand the ecosystem planning going on inside their boardrooms.
Stay tuned as we bring our findings to market in June. We believe you will find them extremely useful in navigating your company’s digital ecosystems.
About the author(s)
PR Krishnan (PRK) is Executive Vice President & Global Head, Enterprise Intelligent Automation & Artificial Intelligence at Tata Consultancy Services (TCS). In this role, PRK helps business and technology leaders drive innovation and integrate digital technologies – AI, smart automation, machine learning and cognitive computing – into their business model for growth and transformation.
PRK has strategized innovations that drive human - machine collaboration that serve as the guiding force for elevated growth and success in the Business 4.0 era. PRK spearheads the MFDM™ (Machine First Delivery Model) initiative in TCS to institutionalize the Machine First™ approach across client engagements and within TCS.
PRK’s team creates new opportunities for, enabling the world’s leading enterprises to harness human ingenuity together with machine precision.
For more than 35 years, PRK has played a pivotal role in coaching large teams, demonstrating thought leadership and innovation towards uncovering insights and creating exponential value for large enterprises.
Prior to leading the EIA & AI portfolio, PRK served as Global Head of the IT Infrastructure Services, overseeing the expansion of the TCS services portfolio. In this role, he successfully led several of TCS’ global delivery centers (GDC), paving the way for the creation of the company’s Global Network Delivery Model (GNDMTM).
Starting in 2004, he was responsible for creating and running the telecom delivery centers for TCS, where he built a 3000+ strong practice servicing over 40 customers, growing the practice in a time when the telecom industry was just beginning to embrace technological advancements.
PRK has contributed significantly towards leading a very successful SEI CMM Level 5 assessment that became a new benchmark and model across TCS.