Why the CIO is the chief innovation officer
The CIO is at the epicenter of digital transformation and has the power to revolutionize business with technology. This makes the CIO the organization’s chief innovation officer. CIOs want to accelerate their use of cloud, analytics and AI technologies to transform their organizations. The most innovative and successful CIOs are finding ways to empower their workforces, identifying growth markets both within and outside their industries. The best-performing CIOs are creating more powerful interactions with customers to improve satisfaction and loyalty.
Leading group of companies known as “torchbearers” comprise four percent of all companies according to the IBM Global C-suite Study that surveyed 1,805 CIOs. These torchbearers have strong reputations as innovators, combined with excellent financial performance. More than 70 percent of CIOs in these torchbearer companies focus on the strategic implications of IT. They recognize the need to innovate while maintaining core IT functions. According to the survey, the CIO of a Japanese car insurer said he spends less time cutting costs and more time stimulating innovation.
Digital innovation is pervasive
Earlier in the year, a major soft drink company announced its CIO would report directly to the CEO. The goal was to ensure digital innovation gets greater visibility across the company, helping them use technology to improve business performance. For example, the company is deploying a mobile supply chain app to help small retailers fill orders on demand.
At a US pharmaceutical, hygienic product and surgical equipment company, the CIO controls an IT budget that exceeds $2 billion a year. The CIO is directing that investment toward a new business line: 3-D printed components for hip and knee replacements. The goal is to increase sales — which are softening — in its medical devices unit.
CEOs recognize that the CIO is the chief innovation officer. The CEO of a major US bank reported to shareholders that the company spent $9.5 billion on technology in 2016, CNBC reported. The company spent so much on technology “to benefit customers with better, faster and often cheaper products and services, to reduce errors and to make the firm more efficient.”
Extracting value from data
What has changed in technology that is enabling digital innovation to drive business performance? The world’s new natural resource is data, but extracting value from it isn’t easy. How do you combine and analyze the data in your internal systems with new data flowing in from customers, salespeople, service staff, social channels and from a growing number of devices? An IBM and Harvard Business Review study revealed 92 percent of business executives say they need to more quickly use data and insights to compete. However, only 14 percent believe they do this well.
The cloud as a delivery model is making it faster, more flexible and more cost-effective to access technology that can gather data, analyze it and deliver meaningful insights across your organization. Empowering your developers with the ability to rapidly access powerful services and APIs drives success. Cognitive services that can understand, learn and reason to rapidly make sense of your data are available in “as-a-service” delivery models. This enables your teams to develop, deploy and iterate for continuous and rapid delivery and improvement. Clients ask how they can apply the predictive power of artificial intelligence (AI) to their businesses — it’s possible for your developers to get started today.
Even smaller, more traditional companies are using cloud and analytics to innovate. A furniture manufacturer based in North Carolina has been in business for more than 125 years, serving customers worldwide. The company strives to deliver a high level of product and service quality that is personalized for each client. The company transformed its processes so sellers could interact more effectively with customers in the showroom using tablets. It used beacons in the showroom to gather insights into buyers’ processes and movements around the showroom, which enabled them to reconfigure the space. Using microservices integrated by APIs running on a hybrid cloud, IT moved rapidly from being reactive to being proactive. Within 10 weeks, the initial app was deployed. The company’s sales increased by 20 percent because of more productive customer interactions and enhanced ordering capabilities.
Technology is at the heart of business innovation, and that means the CIO is the chief innovation officer. In the era of cloud and cognitive computing, CIOs are central to helping companies that need to accelerate the introduction of innovative business models to remain competitive. How will they create customer loyalty that exceeds that of their current and emerging competitors? Read this IBV report to learn more.