Geoffrey Moore introduced the Systems of Engagement concept about two years ago. This vision for the future of Information Technology is gaining broader acceptance – but a surprising number of executives are blind to the coming sea change. Is it hype or reality? For me, this question boils down to one certainty: traditional companies must infuse their organizations with digital DNA – and I believe systems of engagement accomplish this. They raise Digital DNA quotients by using consumer technology to make companies more effective. This notion of effectiveness is a key shift from a two decade long focus on efficiency. That’s not to say the importance of efficiency has diminished, in fact I’d say the next phase in the search for efficiency gains is upon us. But at the same time, effectiveness will headline a decade long journey focused on growth. The same platform that enables next generation efficiency – Mobile, Social, Big Data, Analytics and Cloud Computing – forms the foundation for effectiveness through systems of engagement.
Inside the Next Transition
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Digital Enterprise Characteristics
In the past two months, interest in the characteristics of a digital enterprise is accelerating. I believe increasingly, traditional companies understand that viability in the next decade drives the need to evolve. The list of characteristics has been refined through ongoing dialog and now looks like this:
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Digital Enterprise Road Map Series: Part 2 – Experience
In part one of this six part series; I focused on Holistic Strategy – the first step on the digital enterprise journey. In part two, the focus shifts to experience-based differentiation. With the rapid commoditization of products and services, the speed at which new market entrants emerge, and the rise of Consumerization, experience is the new battle ground. When I talk of experience, I mean stakeholder experience. Ultimately, it’s about creating differentiated customer experiences – but to get there, the experience we create for our employees and partners is critical to that end goal.
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The Ultimate Power Duo – The CMO and CIO
The New Jersey CIO Executive Summit produced by Evanta was held on December 5th in Whippany New Jersey. I had the pleasure of moderating the lunchtime keynote – a panel discussion titled “The Ultimate Power Duo – The CMO/CIO Partnership”. Joining me on stage were two CMO-CIO teams:
Hovnanian Enterprises, Inc:
CIO – Nicholas Colisto,
VP Corporate Marketing and Sales – Laura VanVelthoven
Panasonic:
CIO – Gabrielle Wolfson,
VP Marketing – Betty Noonan
Bloggers, Industry analysts, and Surveys are fueling the CMO-CIO partnership discussion and delivering some very bold predictions:
- Fully 60 percent of marketers point to their lack of alignment with the company’s IT department as the biggest obstacle to reaching the consumer
- Gartner says ninety percent of technology spending will be outside of the IT budget by the end of the decade. In contrast, only 20 percent of technology spend was outside of IT as recently as 2000
- In 2013, global technology spending is expected to reach $3.7 trillion, according to Gartner – and IT spending is being spread more widely than ever across the business
- Gartner Research predicts the CMO will spend more on IT than the CIO by 2017
- A recent IBM Survey shows that leading Marketers are extending their role beyond Marketing
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The CIO and CMO Partnership
Much has been said about the critical need for the CMO and CIO community to work towards a more effective partnership. Yesterday at the CIO Executive Summit in Dallas, Suzanne Kosub – CIO at Concentra – closed the event by underscoring this point. She described the traditional CIO relationship alignment, which in most cases was with the CFO and in some cases the CEO. But the many disruptive forces affecting us today are driving the imperative for the CIO to partner more effectively with the CMO. At an upcoming CIO Summit in New Jersey, I will moderate a panel discussion with three CIO/CMO teams to explore this subject further. How do these executives overcome the relationship challenges of the past? There are many perspectives on this topic, including this recent Forrester piece that proposes the creation of a Marketing Technology Office (MTO). The MTO is a center of excellence that leads technology strategy, develops marketing technologies and evangelizes innovations throughout the marketing department.
In this scenario, the CIO would relinquish control of certain customer-facing technologies and hand responsibility for the function over to the Chief Marketing Officer (CMO). Rubbermaid is an example of a company that has created such a function. Their MTO function reports to the CMO, not the CIO, and the only CIO relationship with the department is to ensure that it is complying with the company’s defined IT standards and processes. Other models are emerging, many of which disrupt the current CIO structure. At this same CIO Summit, I heard several approaches described:
- IT application resources aligned with the business versus the CIO
- Creation of new innovation groups that combine business and technology resources
- The emergence of the Chief Digital Officer
- A model that categorizes IT into three buckets: Enterprise, Local and Federated – and then organizes accordingly
Regardless of the model, it is growing clearer that change is coming. The interesting question for me is: are we witnessing another swing of the pendulum, or are we seeing lasting change to long standing operating models? My bet is that the impact and rate of change is a forcing function and there is no turning back. I’d be interested in your examples of emerging models.
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IBM Big Data Study
The IBM Institute for Business Value recently completed Big Data research and released a report titled Analytics: The real-world use of Big Data. As the report states, companies have been dealing with large volumes of data for years (think billions of call center records collected by Telecommunication companies). But the report also identifies the two trends that make this era of big data different:
- The digitization of virtually “everything” now creates new types of large and real-time data across a broad range of industries. Much of this is non-standard data: for example, streaming, geospatial or sensor-generated data that does not fit neatly into traditional, structured, relational warehouses.
- Today’s advanced analytics technologies and techniques enable organizations to extract insights from data with previously unachievable levels of sophistication, speed and accuracy.
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TCS Digital Mobile Consumer Study
Tata Consultancy Services recently conducted a major study to understand how large organizations in North America, Europe, Asia-Pacific and Latin America have been revamping their strategies, products and processes to win the loyalty of consumers who use mobile devices to do business with them– the so-called “Digital Mobile Consumer”. The Study focused on how companies are coping with this mobile consumer. Some key findings are summarized here.
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Big Data and the Emerging Era of Engagement
I often tell the IBM Watson story as a way of describing the future of analytics. Watson – with a large quantity of Big Data behind it – beat the two biggest Jeopardy winners of all time. Although that became the story, the bigger story for me was the business application of what I had just witnessed. Watson showed us how analytics will mature from descriptive to prescriptive. Most companies I talk to are still in the descriptive stage – reporting on that which has happened.
Inside the Next Transition 