Just ask CEOs and chief marketing officers (CMOs) about the importance of technology
Not to long ago, technology was viewed by most as important but not critical to driving business revenues. But after 2008 when executives recognized that innovation and a different business model were needed to survive and grow, it became clear that Information Technology (IT) really was Business Technology (BT) and executives needed to pay attention to it. Business and IT executives need to collaborate to determine how and where to incorporate the latest technologies into the business so that their firms can take a leadership role and grow market share.
Business is changing dramatically there is no doubt. In the retail space, people do not just come into stores anymore to see what is new; nowadays, many do that online and make purchasing decisions long before they enter a store (if they enter at all). Amazon and eBay have reshaped the retail buying paradigm.
Similarly, Progressive Insurance has used its big data analytics (which it has been doing for more than a decade) to pre-select customers and push "undesirables" to other insurance companies. Banking is not the same as it was a mere six years ago and automobiles are more movable IT machines than mechanical beasts. All industries have been impacted and the rate of change is expected to become even faster.
CEOs now rate technology factors as having the greatest impact on their organizations. This was true in the 2102 IBM CEO Survey and remains so according to the initial 2014 CEO respondents and a 2014 PwC U.S. CEO Survey.
The economic outlook is more positive this year than it has been for a while and now is the time for CEOs, business and IT executives to embrace change and transformation the business through one or more information technologies. Those who sit still run the risk of falling behind and losing market share.
A CEO's Survey Findings
Global growth is shifting again China is slowing, the U.S. is inching up, and the BRIC nations (Brazil, Russia, India, and China) and other emerging nations are no longer engines of growth. To achieve greater market share and improved profitability now requires incorporating new processes and/or technologies into the business to deliver new offerings to customers.
According to the PwC 86 percent of U.S. CEOs strongly believe technological advances will transform their business over the next five years and reshape their businesses utilizing digital business models. To meet that challenge, the top investment areas are in business analytics, socially enabled business processes, mobile customer engagement and cybersecurity. On-demand services, sensors, robotics, 3-D printing and other areas are further down the scale but occurring.
The objective is to create organizations that are always open and available via any digital platform, easy to do business with, anticipates users' needs, personalized, responsive, and provides value. These objectives make nice slogans but are quite difficult to achieve and require not just new IT solutions but cultural and process changes and people and process changes are much harder to implement than technology.
Furthermore, since there are so many different directions that could be taken, business and IT executives need to determine what the customer wants or needs, what level of expectations can be met, and what level of analytical precision can be delivered. All that must be combined into a set of business cases so that executives can determine what investments make most sense.
A CMO's Survey Findings
CMOs have been attempting to change the world over the past five years with some success certainly not as much as they had hoped. CMOs are up against the traditional users' resistance to change which means forward movement in some sectors is glacial. According to the 2104 IBM CMO Study CMOs have made surprisingly little progress towards implementing key digital marketing strategic components. (See chart.)
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About the author
Mr. Braunstein serves as Chairman/CEO and Executive Director of Research at the Robert Frances Group (RFG). In addition to his corporate role, he helps his clients wrestle with a range of business, management, regulatory, and technology issues.
He has deep and broad experience in business strategy management, business process management, enterprise systems architecture, financing, mission-critical systems, project and portfolio management, procurement, risk management, sustainability, and vendor management. Cal also chaired a Business Operational Risk Council whose membership consisted of a number of top global financial institutions.