Two hundred or so IT leaders and professionals gathered in beautiful Stone Mountain, GA last week for the 2015 World of IT Financial Management (ITFM). We were thrilled to be part of the exciting and relevant three-day conference that showcases best practices in asset and expense management, benchmarking, financial planning and reporting and performance management for today’s global organizations.
Our Director of Product Management, Brian Stedman, gave two well-received presentations. The first one, Top 5 Ways to IT Spend and Achieve ROI Success, showed IT executives how to put the top 5 takeaways from this year’s conference into action. Running IT like a business is a commonly expected practice of every IT executive. Yet, delivering ROI, creating meaningful budgets, producing understandable IT products and services or simply sending out an invoice to internal customers, is easier said than done. Brian recommended to “avoid the radical decisions to simply cut applications or change to cloud alternatives that cost over a threshold of ‘$X’ or under ‘Y’ utilization. It’s better to collaborate with your business customers and come to a joint resolution.”
Brian’s second presentation centered on our Business Process as a Service (BPaaS) offering. This demo/presentation showcased how IT professionals can achieve a fully collaborative planning, budgeting, billing and reporting process without additional resources and costs. This session demonstrated one of the market’s most successful software platforms. He showcased the powerful graph database and visual modeler, which provides users a flexible, multi-tiered cost modeling capability to drive continuous cost allocation improvement.
In addition to our own presentations, we were lucky enough to hear from some of the industry’s leading experts. One of those was Joseph Pucciarelli, Group Vice President & IT Executive Advisor for IDC IT Executive Programs. He took the stage to present on the CIO Agenda 2015 Outlook.
The topic of digital disruption kicked off his hour-long presentation. Digital disruption is driving the transformation towards new digital technologies and business models. According to InformationWeek, “With the rise of social media, cloud computing and mobile apps, phones and tablets, the business models and operations of all companies in all industries are at risk of being disrupted.” Digital disruption provides today’s leading companies with not only a competitive advantage but also an opportunity to stand out from the crowd. Moving forward, innovation will simply be a requirement for survival, not a competitive advantage. In addition to innovation and disruption, operational excellence will also be a competitive necessity.
What does digital disruption mean to CEOs? According to Joseph, a lot. Here’s what three leading CEOs have to say about disruption:
- “If you went to bed last night as an industrial company, you’re going to wake up today as a software and analytics company.” – Jeff Immelt, CEO, GE
- “If the phone is going to get integrated into the shirt, should that be a technology company making apparel or the apparel company making technology? I choose the latter and that’s exactly where I’m pushing my co.” – Kevin Plank, CEO, Under Armor
- “What we get paid to do is consumer-focused innovation,” on the company’s goal of getting products to market 30% faster. – Keith McLoughlin, CEO, Electrolux
So what does digital disruption mean for IT organizations? Well, for one, they should be prepared to either hire, work with or morph into a Chief Digital Officer. According to the 2013 HBR article, “Although relatively few CIOs have an official CDO (Chief Digital Officer) title, roughly 20% of CIOs in Gartner’s latest survey said they played the role.” W e estimate that percentage to be even higher now that we’re two years past the article date.
In this digital disruption era, Joseph mentioned that IT organizations must move beyond automating business processes to providing IT services and IT-enabled products that meet the business’ innovation needs. CIO’s will find opportunities to expand their role via this digital shift by leveraging their experience in setting strategy, innovation and relationships. IT leaders will also need to embrace “day and night” IT. IT’s day job will be more along the lines of a “technology custodian,” while IT’s evening job will be “digital disruptor.” More detail is in the graphic above.
I-CIO.com left nothing to the imagination on their opinion of embracing and leading in the digital disruption era, “To describe the choice that now faces the CIO, I point to the decline of ice harvesting companies in the early 1900s – some went into building ice factories, others into the refrigerator business, and the rest went out of business. If we’re not willing to lead the move to the digitized world, when the world expects digital representation in services and products, then we won’t survive this evolution.” Forget innovate or die. It’s now digitize or die in the world of IT.
In addition to digital disruption, Joseph also stressed that by 2017, 80% of the CIO’s time will be focused on analytics, cybersecurity and creating new revenue streams through digital services. IT leaders can prepare for this change in three ways:
- Deliver innovation in three key areas:
- Big data / analytics,
- Becoming a 3rd platform service broker
- Create a plug and play architecture enabling LOBs to integrate new solutions and ready-to-use services
- Raise security governance, risks, and needs to the CxO level
Joseph shared another interesting statistic – by 2018, 30% of CIOs of global organizations will have rolled out a pan-enterprise data and analytics strategy. IT will be impacted by this trend as data will need to be managed as a critical asset and an increasing liability. Data management will also require the same rigor applied to financial or physical assets. As data floods the enterprise, IT must create value by selectively transforming that data into information and insight. In order to prepare for this pan-enterprise data and analytics strategy, organizations must create data governance, stewardship responsibilities and frameworks in concert with business owners and security. They must also feed analytics with a data architecture that integrates existing, new, and big data within a consistent framework.
Finally, they must provide traceability from source to usage and rigorously assess the value of data sources.
We left last week’s event feeling renewed and excited for what lies ahead for today’s IT and IT Finance leaders. It’s an exciting time to be in this field and we look forward to partnering with you on the journey ahead!