The IT monopoly is over, and managers must now be responsible for their technology decisions
Technology is woven so tightly into the fabric of business today that it’s risky to make a judgment call without a firm grasp of both the technology and business issues involved. Managers are struggling with the sudden rise of the empowered consumer, forcing them to experiment with new tools and new technologies as they race after consumers who are skipping across channels and between times. Managers are also smashing together supply chains to support pop-up stores or, along with digital product development processes, to speed the introduction of new products and services.
While these managers have a firm grasp of the business issues involved, technology (for many of them) is something that they’ve used, not something they’ve managed. There’s a difference between having experience using solutions, and in understanding the opportunities and risks inherent in the technology that underpins those solutions.
The success of all businesses now rests on their ability to astutely use technology to engage customers and nimbly craft solutions. Managers that can successfully straddle both business and technology are thriving. Those that can’t are struggling, and their firms are suffering with them.
CIOs, too, are struggling to define a role for themselves and their IT department in an age when everyone considers themselves to be an IT expert. However, there is a clear need that remains unfilled in many businesses. Someone, some group, needs work across the business and bring sense to the chaos.
While the IT department can no longer claim a monopoly on IT knowledge, it is still the group best positioned to work with the lines of business, across the organization, helping stakeholders to step back and see the broader context, and to ensure that the solutions the lines of business are using enable the firm to meet its compliance and reporting obligations.
Technology is not someone else’s problem
I’ve heard more than one CEO claim that “the reason I hired a CIO is so that I don’t have to worry about IT”. In their view technology was something to be dealt with by technologist, allowing the CEO (and the rest of the C-level) to get on with the challenge of running the business.
The most recent version of this seems to be the announcement of a newly hired Chief Digital Officer (CDO), someone who will come in and transform the business, tossing out all the old and crufty non-digital stuff and replacing it with shiny new digital stuff. McKinsey is so bullish on the idea of hiring a CDO that they published a recent report called “Bullish on digital” which concludes that firms need to “Find the right digital leaders. Leadership is the most decisive factor for a digital program’s success or failure”.
Setting aside the question of why the CIO or CTO isn’t leading the transformation, the rise of the CDO hides a bigger problem that executives need to address.
Hiring a CDO might be a symptom, rather than the cure
Technology is now a general business skill, and not a specialist skill like it was in the past. Going forward, all executives will need a solid understanding of technology, along with how it can be used to create opportunities, and its limitations. If not, then they should find a replacement who does.
We live in the age of the empowered consumer. Consumers have grabbed control of their relationship with merchants. Wielding their smartphone with both thumbs they can buy what they want, when and where they want, and obtain the best price. They can also use social media to peer into a firm’s operations, and they’ll take their business elsewhere if they find something objectionable.
Firms are scrambling to respond as they watch their traditional revenue streams leak into other channels. A key strategy is to take a holistic and customer-centric approach that enables the firm to follow consumers as they skip between places, times and trends. Doing this means investing in programs who’s benefits are not easily qualified. These programs are either enabled by, or rely heavily on, technology.
We don’t have “digital programs”: we have “programs”, since they all use digital technology. Similarly we don’t want “leaders” and separate “digital leaders”. We need “leaders” who understand both the business and the digital worlds, as the two are the same.
Amazon, for example, was born digital. Technology is not treated as something separate from business; interactive and social media are commingled with traditional media, and the merchandising team is responsible for wholesale, stores and web.
How we measure value has changed
Managers trying to paper over knowledge and experience gaps by hiring in the expertise will soon find that it’s not enough. The person accountable for a firm’s (or a department’s) performance will need to understand the trade-offs they’re making. Increasingly these trade-offs cannot be captured by return on investment (ROI) or net present value (NPV) calculations, as the key factors in the trade-off are intangibles. Tim Cook has even famously disparaged “bloody ROI” when he explained at a shareholders meeting that Apple does “a lot of things for reasons besides profit motive”.
Trying to make judgment a call without an intuitive understanding of the trade-off being made is fraught with danger. If the factors that will sway the decision are not easily quantifiable then it can be challenging (if not impossible) to separate the technical and business expertise.
Management need to straddle business and technology
Management, from line management on the shop floor up to the executive and the board, need to have both a firm understanding of the business the firm is in, and the technology that is woven into the fabric of the business. In the lower ranks the focus is on identifying opportunities and solutions that can drive up firm performance. Higher up, the executive through to the board will make the judgment calls on where to direct resources. They must also be capable of defending these judgment calls to the owners.
Hiring in technical expertise will allow a firm to modernize its infrastructure and operating model. It will not, however, solve the more significant challenge of constantly evolving the firm’s business model in response to the evolution of the technology environment around it. Companies that have made this cultural shift do not have, nor will they probably ever hire, a CDO. Nor will they see IT as something they hire a CIO to worry about. Younger firms, such as Amazon, achieved this by being born digital. Older firms, such as Burberry, have hired or developed digitally savvy executives.
IT is not the high priest of technology anymore
As I’ve pointed out before, the role of the IT department is not carved in stone. The growth of empower consumers has also given rise to the empowered manager, a manager who understands technology, knows what they want, and (thanks to Software as a Service) has the ability to source it without the help of the IT department.
IT is a general business skill, and not the specialist skill it was in the past.
However, business, your business, still needs someone to play the role of intellectual bumblebee. Someone who can buzz between stakeholders and cross pollinate ideas, and someone who can ensure that the parts operate as a coherent whole.
The IT department can no longer monopolize IT knowledge. Nor can it expect to monopolize IT management. (Shared services have a patchy track record at best.) The lines of business have grabbed control of the technology they use, which is as it should be. It’s the lines of business that have the problems which need solving and – as was pointed out earlier – solving these problems will require knowledge of both business and technology. They’re also choosing to use service providers that operate outside the four walls of the traditional IT department.
A new relationship between IT and business
The IT department, however, is the group best positioned to work with the lines of business, working across the organization, and make sense of the chaos.
Business stakeholders need help stepping back and seeing the bigger picture, and to understand the broader implications, of the technology choices that they are making. It’s great to improve consumer engagement and shift more product, but this needs to be done in an environment where solutions deployed by the the various lines of business work together, and not at cross purposes, and in a way that allows the firm to meet its compliance and reporting obligations.
While the IT department needs to stop acting like an IT monopoly, the flip side is that managers in the line of business need to also take responsibility for the technology decisions they make.
How far along the journey is your organisation? Is technology still something only the CIO worries about about? Has your organisation started to try and transform into a digital business? Or are you already there, and technology is a general business skill?
Report: The Future of Digital Australia in 2025 and what Australians think
By Ross DawsonI have been recently working with McAfee, now part of Intel Security, to write a report on Safeguarding the Future of Digital Australia in 2025, being launched this morning in Parliament House in Canberra as part of the Federal Government’s Stay Smart Online Week.
McAfee_Future_of_Digital_Australia
Click on the report cover image left to download the report.
Accompanying the report, we did a survey of what Australians think about their digital future in 2025. The results of the survey are in the video below. There are some fascinating insights.
For now, please feel free to share the resources. I would love to hear your thoughts on the report.
The future of credit unions is community
By Ross DawsonTwo weeks ago I gave the closing keynote at the Boards of Directors and Supervisory Committees Conference of the U.S. National Association of Federal Credit Unions in the beautiful Hawaiian island of Maui, on the topic of Profiting From Technology Trends.
The credit union sector in the U.S outperformed commercial banks after the financial crisis according to the very interesting ILO study Resilience in a downturn: The power of financial cooperatives, moving from 42.8% to 45.0% market penetration to a total over $1 trillion in assets, while in the same post-GFC period credit unions increased their market share in most other regions in the world.
Read more →
Is Internal Crowdfunding in the Enterprise Set to Take Off?
By Steve BynghallA number of companies are experimenting with internal crowdfunding. This has the potential to be a successful way to spark innovation and evaluate employee-generated ideas.
Ideation platforms, where employees can contribute suggestions and ideas and then vote on the best ones to implement, are now commonplace in both large and small companies. Some of these schemes have been in place for over a decade.
Similarly, arguing the business case for your own initiative is now part of corporate culture, and some organisations have an “innovation” fund for new projects which may be regarded as extraordinary spend, above and beyond normal functional or departmental budgets.
With idea management widespread and pitching for funding part a frequent activity, perhaps enterprise crowdfunding is not such a huge cultural leap.
The advantages of internal crowdfunding
The advantage of distributing some budget for the employees to back different projects is it greatly increases the influence of the workforce and each individual on which initiatives are actually taken forward.
In traditional idea management schemes, a committee tends to sift through the most popular projects, but internal crowdfunding means there is a potentially deeper sense of involvement for all employees.
In turn this means more considered participation, better proposals, deeper engagement through the process (particularly if there are incentives), more ongoing feedback and the diffusion of an innovative culture.
Read more →
Updating the newspaper extinction timeline for the Arab world
By Ross DawsonYesterday I gave the opening keynote at the Arab Media Forum in Dubai, on Creating the Future of Arab Media.
My speech and a series of interviews I did afterwards have received broad coverage, including articles in Al Arabiya, Gulf Today, Huffington Post, Emirates 24/7, Zawya, and Gulf News, as well as interviews on Dubai Eye and Dubai One. I thought it was worth reviewing a few of the major points made.
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Keynote slides: Creating the Future of Arab Media
By Ross DawsonTomorrow I am doing the opening presentation at Arab Media Forum in Dubai, the largest and most prestigious conference on media in the Arab world.
The slides to my presentation are below. As always, slides are designed to support my presentation, not to stand alone, but may still be of value even if you didn’t attend my keynote.
In my presentation I cover:
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Future/ media/ social media meetup in Dubai – Wednesday 21 May
By Ross DawsonI am in Dubai for the next few days to do a keynote at Arab Media Forum on the future of media.
I’d love to catch up with anyone who is interesting in an informal meetup to chat about the future, media, and social media in the Arab world and beyond.
It has been a while since I’ve been in UAE and keen to connect with interesting people and hear what’s happening.
Where: A’Rukn cafe, Souk Madinat Jumeirah (location link)
When: 6-8pm, Wednesday 21 May
Register on Eventbrite
Hope to see you there! Everyone is welcome, feel free to pass on word, whoever turns up will be the right people
Creating a prosperous national future: networks and new industries
By Ross DawsonToday’s issue of AFR Boss magazine includes highlights of the discussion at the recent first BOSS True Leaders’ Legacy Dinner, where 14 of us had an excellent dinner and debated “how Australia could seize the opportunities of the knowledge economy”.
It was a fantastic and sometimes heated discussion, most enjoyable. The highlights of the conversation are published in the online magazine.
At the outset I said (quotes were severely edited for length):
As I’ve noted before, entrepreneurial migration is highly valuable in forming global networks.
Australia has come a long, long way in the last 6-8 years in becoming a nation with a true network mentality. This is essential given our geographical isolation. However I am becoming concerned that our progress is not keeping pace with the rest of the world.
Later in the conversation I was quoted:
Crowdfunding is just one of range of new capital market structures that are allocating funds to where they can have the most value. National regulation is critical in enabling or disabling these innovative approaches.
The nature of politics is that legacy industries have the funds, clout, and connections to make governments pay attention, while newer industries don’t have the impact or access. Yet they are where our future lie. It is critical that attention – and in some cases resources – are spent on the networked, knowledge-based economy that will bring our future prosperity.
The future of travel: vertical train stations to help the growth of high-speed trains
By Ross DawsonToday I was interviewed on the Channel 7 Daily Edition about the future of travel. Click on the image below to see a video of the segment.
One of the topics we discussed was a proposed concept of a Hyper-Speed Vertical Train Hub, an interesting idea which allows high speed trains to shift to a vertical configuration as they arrive at a station.
Instead of long carriages the train consists of smaller pods that can stay in upright position as the train shifts to be aligned with the walls of a building, where the passengers can alight.
The primary advantage is that the train station can have a very small footprint, which will be increasingly important when space is at a premium in densely populated urban centers.
High-speed trains are proving to be a vital foundation to China’s infrastructure, providing an example that other countries are increasingly interested in following.
The vertical train hubs concept is not that likely to be implemented, but it is a novel and intriguing approach that just might facilitate the adoption of high-speed trains in major centers.
Image source: Evolo
Crowdtesting Success: Why Crowdsourcing User Testing Continues to Grow and Provide Value
By Steve BynghallCrowdtesting is a successful area of the crowsourcing landscape that provides great value.
Crowdtesting involves a distributed crowd carrying out user testing for software development and IT projects, usually across a hosted platform. It has grown into an accepted model in mainstream business, used by both large enterprises and smaller companies. It’s still a fast-growing area with the market leader uTest one of crowdsourcing’s undisputed success stories.
The advantages of crowdtesting
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IT Is a General Business Skill, Not a Specialist Skill
By Peter Evans GreenwoodThe IT monopoly is over, and managers must now be responsible for their technology decisions
Technology is woven so tightly into the fabric of business today that it’s risky to make a judgment call without a firm grasp of both the technology and business issues involved. Managers are struggling with the sudden rise of the empowered consumer, forcing them to experiment with new tools and new technologies as they race after consumers who are skipping across channels and between times. Managers are also smashing together supply chains to support pop-up stores or, along with digital product development processes, to speed the introduction of new products and services.
While these managers have a firm grasp of the business issues involved, technology (for many of them) is something that they’ve used, not something they’ve managed. There’s a difference between having experience using solutions, and in understanding the opportunities and risks inherent in the technology that underpins those solutions.
The success of all businesses now rests on their ability to astutely use technology to engage customers and nimbly craft solutions. Managers that can successfully straddle both business and technology are thriving. Those that can’t are struggling, and their firms are suffering with them.
CIOs, too, are struggling to define a role for themselves and their IT department in an age when everyone considers themselves to be an IT expert. However, there is a clear need that remains unfilled in many businesses. Someone, some group, needs work across the business and bring sense to the chaos.
While the IT department can no longer claim a monopoly on IT knowledge, it is still the group best positioned to work with the lines of business, across the organization, helping stakeholders to step back and see the broader context, and to ensure that the solutions the lines of business are using enable the firm to meet its compliance and reporting obligations.
Technology is not someone else’s problem
I’ve heard more than one CEO claim that “the reason I hired a CIO is so that I don’t have to worry about IT”. In their view technology was something to be dealt with by technologist, allowing the CEO (and the rest of the C-level) to get on with the challenge of running the business.
The most recent version of this seems to be the announcement of a newly hired Chief Digital Officer (CDO), someone who will come in and transform the business, tossing out all the old and crufty non-digital stuff and replacing it with shiny new digital stuff. McKinsey is so bullish on the idea of hiring a CDO that they published a recent report called “Bullish on digital” which concludes that firms need to “Find the right digital leaders. Leadership is the most decisive factor for a digital program’s success or failure”.
Setting aside the question of why the CIO or CTO isn’t leading the transformation, the rise of the CDO hides a bigger problem that executives need to address.
Hiring a CDO might be a symptom, rather than the cure
Technology is now a general business skill, and not a specialist skill like it was in the past. Going forward, all executives will need a solid understanding of technology, along with how it can be used to create opportunities, and its limitations. If not, then they should find a replacement who does.
We live in the age of the empowered consumer. Consumers have grabbed control of their relationship with merchants. Wielding their smartphone with both thumbs they can buy what they want, when and where they want, and obtain the best price. They can also use social media to peer into a firm’s operations, and they’ll take their business elsewhere if they find something objectionable.
Firms are scrambling to respond as they watch their traditional revenue streams leak into other channels. A key strategy is to take a holistic and customer-centric approach that enables the firm to follow consumers as they skip between places, times and trends. Doing this means investing in programs who’s benefits are not easily qualified. These programs are either enabled by, or rely heavily on, technology.
We don’t have “digital programs”: we have “programs”, since they all use digital technology. Similarly we don’t want “leaders” and separate “digital leaders”. We need “leaders” who understand both the business and the digital worlds, as the two are the same.
Amazon, for example, was born digital. Technology is not treated as something separate from business; interactive and social media are commingled with traditional media, and the merchandising team is responsible for wholesale, stores and web.
How we measure value has changed
Managers trying to paper over knowledge and experience gaps by hiring in the expertise will soon find that it’s not enough. The person accountable for a firm’s (or a department’s) performance will need to understand the trade-offs they’re making. Increasingly these trade-offs cannot be captured by return on investment (ROI) or net present value (NPV) calculations, as the key factors in the trade-off are intangibles. Tim Cook has even famously disparaged “bloody ROI” when he explained at a shareholders meeting that Apple does “a lot of things for reasons besides profit motive”.
Trying to make judgment a call without an intuitive understanding of the trade-off being made is fraught with danger. If the factors that will sway the decision are not easily quantifiable then it can be challenging (if not impossible) to separate the technical and business expertise.
Management need to straddle business and technology
Management, from line management on the shop floor up to the executive and the board, need to have both a firm understanding of the business the firm is in, and the technology that is woven into the fabric of the business. In the lower ranks the focus is on identifying opportunities and solutions that can drive up firm performance. Higher up, the executive through to the board will make the judgment calls on where to direct resources. They must also be capable of defending these judgment calls to the owners.
Hiring in technical expertise will allow a firm to modernize its infrastructure and operating model. It will not, however, solve the more significant challenge of constantly evolving the firm’s business model in response to the evolution of the technology environment around it. Companies that have made this cultural shift do not have, nor will they probably ever hire, a CDO. Nor will they see IT as something they hire a CIO to worry about. Younger firms, such as Amazon, achieved this by being born digital. Older firms, such as Burberry, have hired or developed digitally savvy executives.
IT is not the high priest of technology anymore
As I’ve pointed out before, the role of the IT department is not carved in stone. The growth of empower consumers has also given rise to the empowered manager, a manager who understands technology, knows what they want, and (thanks to Software as a Service) has the ability to source it without the help of the IT department.
IT is a general business skill, and not the specialist skill it was in the past.
However, business, your business, still needs someone to play the role of intellectual bumblebee. Someone who can buzz between stakeholders and cross pollinate ideas, and someone who can ensure that the parts operate as a coherent whole.
The IT department can no longer monopolize IT knowledge. Nor can it expect to monopolize IT management. (Shared services have a patchy track record at best.) The lines of business have grabbed control of the technology they use, which is as it should be. It’s the lines of business that have the problems which need solving and – as was pointed out earlier – solving these problems will require knowledge of both business and technology. They’re also choosing to use service providers that operate outside the four walls of the traditional IT department.
A new relationship between IT and business
The IT department, however, is the group best positioned to work with the lines of business, working across the organization, and make sense of the chaos.
Business stakeholders need help stepping back and seeing the bigger picture, and to understand the broader implications, of the technology choices that they are making. It’s great to improve consumer engagement and shift more product, but this needs to be done in an environment where solutions deployed by the the various lines of business work together, and not at cross purposes, and in a way that allows the firm to meet its compliance and reporting obligations.
While the IT department needs to stop acting like an IT monopoly, the flip side is that managers in the line of business need to also take responsibility for the technology decisions they make.
How far along the journey is your organisation? Is technology still something only the CIO worries about about? Has your organisation started to try and transform into a digital business? Or are you already there, and technology is a general business skill?