A CIO’s Top 5 Priorities for Digital Transformation

04/21/18 • 10 min

The Podcast on Organizational Excellence - Digital Business Best Practices

In this episode, we will cover five key priorities that an organization’s CIO or CTO should focus on to smooth their organization’s digital transformation efforts.

Creating a vision for the new digital platform: As CIOs play an instrumental role toward an enterprise’s digital transformation, accordingly they should also define the vision for their new digital-enabled enterprise. We know, for example, that more than offering one off digital products and services, a digital organization is realized through a larger digital ecosystem, which extends beyond the walls of the enterprise to include customers, suppliers, government regulators, and other stakeholders and partners. This ecosystem is built on digital platforms that in turn is built through various digital technologies. Building this larger ecosystem through the integration of internal systems and other digital platforms sometimes can take years and thus requires a coherent vision that the CIO must define and communicate to all parties. The vision of this platform should be sound and far reaching to support adoption of future technologies as well. Also, as the number of mergers and acquisitions have become common to adopt new business models, an organization’s digital platform should be versatile to absorb such changes.

In the context of building the right vision for an organization’s digital platform, we know that in today’s economy and digital markets an organization either creates its own digital platform to deliver digital services for its ecosystem members or uses an external digital platform to deliver its services. For example, GE has built its Predix platform to provide maintenance for its equipment that it sells to customers worldwide. It’s able to use that platform to provide services and has proved to be a major source of value for the organization. Other organizations such as Amazon have built a retail selling platform that it has opened to businesses to enable them sell their products and services through the Amazon platform. Thousands of businesses are successful due to selling on this platform. Similarly, almost every industry has organizations that have built successful digital platforms to provide services to their customers. So, part of defining a digital vision for its organization, a CIO will have to define their organization’s vision for either the development of new digital platforms or integration with ecosystems and the organization’s future position relative to that ecosystem and digital platform.

To ensure that the vision doesn’t sound as a wish or a dream, CIOs must embark on a transformation program and create and communicate a roadmap that shows the planned and progressive realization toward the new digital enterprise. The transformation roadmap should focus on all three dimension of people, process as well as technology along with working with all other stakeholders.

Use of analytics for business insights: The use of analytics within the enterprise has evolved to become a vital strategic tool and its use for getting business insights and making critical decisions is expected to exponentially increase over the next few years. The challenge for CIOs will be to use data and analytics effectively in all areas of the enterprise and to identify new customers and new sources of revenue, as well as understand existing customer needs and organization’s internal strengths and weaknesses. All in all, strategic use of analytics can transform the complete chain extending from customer facing systems to backend systems and processes. In fact, the use of analytics in all aspects of the enterprise will be so widespread and integral to an organization’s success that CIOs should define the vision for a larger analytics ecosystem and platform that can enable business insights at all levels of the enterprise. When defining the larger platform for analytics, CIOs not only should define and communicate the specific use cases but also link those use cases to specific business outcomes. To build such an all-encompassing vision, CIOs have to tackle a number of issues related to data quality, analytics governance, and potential applications of machine learning, and scaling the solution so it can extend beyond the enterprise to the larger ecosystem.
Digital platform and ecosystem Integration: As a CIO when you start building digital applications, systems, and platforms, one of the biggest challenge you may face is to ensure a smooth integration of the overall internal and external systems. This integration is vital not only to ensure that your overall ecosystem facilitates agility of processes but also ensures that your customer experience integrates smoothly with your backend systems. So, as an example, the frontend e-commerce systems that serve the end customer will integrate smoothly with the backend order fulfillment customer service...

In this episode, we will cover five key priorities that an organization’s CIO or CTO should focus on to smooth their organization’s digital transformation efforts.

Creating a vision for the new digital platform: As CIOs play an instrumental role toward an enterprise’s digital transformation, accordingly they should also define the vision for their new digital-enabled enterprise. We know, for example, that more than offering one off digital products and services, a digital organization is realized through a larger digital ecosystem, which extends beyond the walls of the enterprise to include customers, suppliers, government regulators, and other stakeholders and partners. This ecosystem is built on digital platforms that in turn is built through various digital technologies. Building this larger ecosystem through the integration of internal systems and other digital platforms sometimes can take years and thus requires a coherent vision that the CIO must define and communicate to all parties. The vision of this platform should be sound and far reaching to support adoption of future technologies as well. Also, as the number of mergers and acquisitions have become common to adopt new business models, an organization’s digital platform should be versatile to absorb such changes.

Use of analytics for business insights: The use of analytics within the enterprise has evolved to become a vital strategic tool and its use for getting business insights and making critical decisions is expected to exponentially increase over the next few years. The challenge for CIOs will be to use data and analytics effectively in all areas of the enterprise and to identify new customers and new sources of revenue, as well as understand existing customer needs and organization’s internal strengths and weaknesses. All in all, strategic use of analytics can transform the complete chain extending from customer facing systems to backend systems and processes. In fact, the use of analytics in all aspects of the enterprise will be so widespread and integral to an organization’s success that CIOs should define the vision for a larger analytics ecosystem and platform that can enable business insights at all levels of the enterprise. When defining the larger platform for analytics, CIOs not only should define and communicate the specific use cases but also link those use cases to specific business outcomes. To build such an all-encompassing vision, CIOs have to tackle a number of issues related to data quality, analytics governance, and potential applications of machine learning, and scaling the solution so it can extend beyond the enterprise to the larger ecosystem.
Digital platform and ecosystem Integration: As a CIO when you start building digital applications, systems, and platforms, one of the biggest challenge you may face is to ensure a smooth integration of the overall internal and external systems. This integration is vital not only to ensure that your overall ecosystem facilitates agility of processes but also ensures that your customer experience integrates smoothly with your backend systems. So, as an example, the frontend e-commerce systems that serve the end customer will integrate smoothly with the backend order fulfillment customer service...

Previous Episode

Five Habits and Best Practices for Today’s Managers and Executives

In this episode, I will cover five habits that you as a manager must adopt to stay competitive in today’s digital markets and economies. We know that competitive pressures have been building up in today’s marketplace and digital disruption has created a fast-paced environment that is challenging traditional business models and requiring organizations to transform in order for them to remain viable. Effective team leadership in this new business environment demands that managers find fresh ways to help create both business value and a rewarding experience for colleagues and team members. To do this, you as an executive and / or manager must adopting new habits to help your teams and groups achieve the flexibility required to tackle the headwinds of this new competitive climate.

Here are five of those habits:

Define Success in Terms of Business Outcomes

Whether overseeing large projects or smaller tasks, managers need to define their department’s work in the context of overall business outcomes. Examples of business outcomes are growth in sales, improved customer experience, increased productivity, and reduced process cycle times. A problem that some teams face is that they get so bogged down in addressing lower-level requirements that they lose sight of the company’s overall target outcomes. One way to fix this is to implement trace-ability mechanisms that will track the relationship of lower-level activities to larger business outcomes. This can help you to align your department or group to the organization’s overall objectives and keep your teams focused on delivering business value.

Many organizations use quantitative metrics such as Key Performance Indicators (KPIs) to help their departments and managers stay focused on delivering the desired end results. However, improperly defined KPIs can have the reverse effect by obscuring the team’s ability to attain business value that’s relevant to the company’s larger goals. In such cases, you as a manager need to bring your teams back into focus by putting business outcomes in the context of overall business value. Doing this will help team members to think on a larger scale.

Thinking and communicating in terms of business outcomes also brings managers closer to their customers and stakeholders, ensuring that the department’s delivery is in line with their expectations and preventing any surprises in the future.

Create a Healthy Culture for Optimal Performance

A healthy organizational culture is a prerequisite for achieving optimal organizational performance. An organization’s culture depends on the mindset and behaviors of its employees, who take their cues from the leadership’s core beliefs, values, and practices.

As a manager, your potential for building a strong cultural foundation for your department gives you considerable influence. Among the ways of inculcating a positive culture are improving communication between team members, communicating core values to employees and practicing them yourself in your daily work, appreciating and valuing your team members’ input and efforts, and encouraging risk taking. Investing in your department’s culture will help employees feel personally fulfilled and also build trust and respect, all of which lead to a more motivated and creative staff. The positive impact on the thinking and performance of your department can only benefit the company as a whole.

Foster an Agile Mindset

Demands for speedy delivery are pushing managers to reduce cycle times across all levels of the organization. Methods such as lean and agile have proven useful in software development, manufacturing, and other organizational functions. But effective managers recognize that, more than a methodology, agile is a shift in mindset that embodies principles of incremental and iterative development, better customer alignment, and the use of feedback loops to improve products and services.

Agility in today’s environment, for example, means preferring rapid and incremental delivery of products and services with limited functionality, rather than waiting longer for hefty feature releases. In the new paradigm, failing quickly and learning from your mistakes is at times considered more desirable than engaging in extended (and sometimes indefinite) planning and analysis cycles. Managers who embrace these principles understand that being agile can help not only with working around complexities, dependencies, and uncertainties but also with ensuring rapid delivery to the marketplace.

Encourage Your Team to Think Differently

Departmental processes certainly help an organization to meet various performance objectives, but standard processes and predefined scripts cannot guarantee the successful achievement of all performance goals. Many tasks and situations require out-of-the...

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Learn Five Lessons from Amazon.com’s Business Success

This podcast focuses on lessons from Amazon.com’s success based on its recent performance results and a few lessons and takeaways that can be beneficial to others. Now a lot has been talked about over the years on how Amazon has excelled in both customer experience as well as operational excellence. But as the company continues to improve and excel year after year, we are compelled to revisit the topic and its performance. Just recently, Amazon and Jeff Bezos released the annual shareholder letter describing the organization’s performance. That’s what we will discuss today.

We can learn a number of things from this report especially about how an organization like Amazon has achieved its current stature and position in the industry. In general, reports like these can be very useful in understanding the psyche of the organizations, what drives them to do better and excel, and then see the impact of that in the results and outcomes.

So, in this podcast, I will go over some of those points that Jeff Bezos has highlighted in that report and what others – both businesses as well as individuals – can learn from Amazon.

Key Facts

First, I would like to highlight some important facts that Jeff Bezos mentions in the opening of his letter. And that has to do with Amazon being ranked as number one in various customer surveys. Amazon it seems was ranked as number one in the American Customer Satisfaction Index for the 8th year in a row – it was also ranked number one for the 5th year in a row in the U.K. Customer Satisfaction Index, which is put out by the Institute of Customer Service – it was also ranked as the #1 business on LinkedIn’s 2018 Top Companies list – and it was number one for 3rd year in a row on the Reputation Quotient, which is released annually by the Harris Poll. For those who don’t know, Reputation Quotient issued by the Harris Poll quantifies the reputation ratings for the 100 most visible companies and they have been doing this for the last 19 years or so. Additionally, Amazons’ India site – Amazon.in – has become the fastest growing marketplace in India, and the most visited site on both desktop and mobile, and also boasts the most downloaded shopping app in India in 2017.

Jeff Bezos then goes on to highlight three elements that in his view drives this level of performance. He highlights them as unrelenting customer obsession, ingenuity, and commitment to operational excellence.

So, let’s look at Amazon’s performance on various fronts.

Before we get into the potential reasons for Amazon’s success, let’s briefly review its performance over the last year.

First, its prime membership has grown to exceed 100 million subscribers. That means 100 million subscribers consider it worthwhile and of value to pay the $99 annual membership fees. More than that, this membership has now expanded to include more countries outside the USA.

Second, Amazon’s cloud platform called AWS or Amazon Web Services has grown to provide thousands of cloud based services making it easier for cloud developers to build digital systems and applications. Also, the fact that it’s annual conference on cloud computing services exceeds 100,000 attendees and participants, says a lot about the popularity of its cloud computing services.

Third, Amazon marketplace that enables third party sellers to sell on Amazon has grown substantially. Although the actual number is not known but it is in the millions and just in 2017, 300,000 businesses started selling on the Amazon platform. That’s a staggering number of businesses and shows the power of the platform. If the sellers on the platform has reached such a high number, this naturally would attract even larger number of shoppers.

Fourth, Amazon has also started to venture in the brick and mortar business, something that is new for the organization. For example, it has launched a new store called Amazon Go that requires no checkout. It uses a number of technologies including computer vision, sensor fusion, and deep learning, which all come together to create a Just Walk Out shopping experience for customers. Also, Amazon has acquired Whole Foods in an effort to making high-quality, natural and organic food available for everyone. They are also offering these products for delivery to prime members in certain markets. Amazon is also identifying in store Whole Foods shoppers who are prime members and have begun to offer special benefits and services to them.

Amazon also continues to excel in the area of Prime Video. For example, in 2017, Prime Video Direct secured subscription video rights for more than 3,000 feature films and committed over $18 million in royalties to independent filmmakers and other rights holders. Again, by bringing in more sellers and content producers on the platform, Amazon in a way is guaranteeing a wider adoption and use of its digital video me...