A CIO’s guide to ride the digital wave

|November 3, 2015 0

BANGALORE, INDIA: The IT industry is being driven by digital business, and an environment driven by a connected world.

As analog revenue flatten, and decline for many industries, businesses are shifting to digital revenue from digital business. Here are some observation and recommendation by Gartner for the CIOs looking to embark on digital journey.

Digital Business

                                 

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Digital business is when new businesses designed with both the physical and digital world are brought together. Global digital commerce is now over $1 trillion, annually.

“Leading CEOs have told Gartner that their digital revenue will increase by more than 80 percent by 2020. 1,25,000 large organizations are launching digital business initiatives now, said Mike Harris, group vice president at Gartner.

Bimodal Business

For digital business to succeed, companies are creating innovation units. New digital initiatives are running alongside their traditional analog businesses. The business itself is bimodal.

Organizations are creating separate business units, focusing on digital, separate from their traditional businesses (Mode 1).

“They are trying new ways of reaching the customer, of running operations, of driving diverse innovation. They are acquiring and investing in digital technology companies, not waiting on existing suppliers to build capabilities because they have to start in a different place,” said Partha Iyengar, analyst and head of research at Gartner India.

“Traditional organizations move too slowly when they build digital on old Mode 1 platforms. The solution is to create a type of bimodal organization, introducing a new Mode 2 platform, with a different emphasis. The Mode 2 platform uses more cloud than in-house infrastructure and applications,” added Iyengar.

You need IT that supports a bimodal business. Over a third of CIOs have gone bimodal just within IT, creating innovation units, running at Mode 2 to break out of the traditional, slow, but stable approach, which is Mode 1.

Venture Investors

For CIOs to truly transform, they need three things:

1. they need a different approach to technology and investment

2. they need new digital suppliers

3. they need to create an innovation competency.

“To accelerate the creation of a new digital technology platform, leading companies are acting as venture investors. They are not waiting for current suppliers to build digital capabilities. Instead, they are investing in small technology startups. They are buying a stake in their future, guiding their direction,” said Iyengar.

Even if a CIO technology isn’t a venture investor, the landscape for the technology buyer will change. If a CIO is going out to buy products and services, that CIO will need new capabilities that most Mode 1 suppliers don’t have, or are struggling to deliver.

“The new suppliers of digital platforms must be: able to support fast-fail projects; in the cloud, on demand, and highly automated with short-term engagements and pay-as-you-go models; and provide real-time insights with advanced automation,“ said Munglani.

CIO

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