CIOs face a daunting challenge. For years, analysts have warned of the CIO’s coming demise.
Gartner analyst Laura McLellan predicts that within five years marketing departments will outspend technology departments on information technology. According to a Wall Street Journal survey of technology leaders in over 500 corporations, 79% of technology spending was made outside of the IT organization in 2012, up from 69% in 2006 and just 34% in 2000. Forrester’s research is littered with warnings urging CIOs to reinvent themselves.
Simultaneously, the amount of information available for consumption and analysis is exploding. 90% of the data in the world has been generated over the last two years (Science Daily).
Cloud computing and big data technologies have arrived on the scene to help manage and make sense of this data, but IT organizations are already tapped out, frantically working to catch up in the areas of enterprise mobility and social media.
The need for strong information technology leadership has never been more acute. So where is all of this talk about the demise of the CIO coming from? They are Chief Information Officers, aren’t they? Yes, but the Information Age as we know it is gone.
During the Information Age, we scrambled to manage and make sense of information. Information was used to make informed decisions, optimize costs, and automate processes. It was largely a back-office asset. IT in this sense has been commoditized; it is no longer a differentiator.
The Innovation Age is all about creating and monetizing information. Sensors that continuously collect real-time information are embedded in countless new devices. Insights and information are being delivered to the palm of the consumer’s hand. Information is being used to improve our daily lives and to develop brand-new business models that deliver the information people want, when they want it.
Think about some of the most innovative products on the market today.
Automatic has developed a small device, called Link, that collects real-time information from your automobile. Through the analysis of this data, Automatic is able to help you save on fuel costs, predict maintenance issues before they occur, and alert others when you are in an accident. Automatic knows more about your car than your mechanic does.
Nike, named Fast Company’s most innovative company for 2013, is no longer just a sneaker company or apparel manufacturer. They are in the information services business. The Nike+ Fuelband collects physiological information and provides insights into your health and well-being. Your Fuelband device knows more about your health than your doctor does.
These are just two examples of software products that use information in innovative new ways to put power in the hands of consumers and drive transformative business results.
Information now drives revenue, and your software is now your brand. To stay relevant, CIOs must be experts at the creation and monetization of information — both of which are customer-facing, revenue-generating activities.
In the Innovation Age, you must disrupt or you will be disrupted. Innovate or die.
Technology’s role is no longer in the back office. It is central to the business model. We are operating in a digital economy, and the company that builds the most engaging digital experience wins. Without it, irrelevancy prevails.
In the Innovation Age, your software is your brand. Information is deployed through software products, and in most cases, this software interacts far more frequently with your customers than any other aspect of your organization.
The Innovation Age requires a different mindset. The IT mindset has been replaced with a product mindset. The product mindset prioritizes market share, user adoption, and revenue generation over project budgets, timelines, and scope. The product mindset embraces the reality that innovation is never done.
The CIO of the future builds a sustainable innovation engine that produces breakthrough ideas, disciplined innovation, and rapid iteration.
The CIO of the future is the Chief Innovation Officer.