The CIO and CTO Must Work as PartnersBy Guest Author | Posted 08-02-2017
The CIO and CTO Must Work as Partners
By David Sovie
Collaboration between CTOs and CIOs isn’t new, but what is new is the increased acceleration of technical and business forces necessitating a closer alignment of these functions. Traditionally, CIOs have managed and adapted existing technologies that control systems of record, such as finance and HR. In contrast, CTOs have overseen the development of new innovation tech that's often focused on value creation.
As IT infrastructures become increasingly commoditized, technology investment is moving toward innovation that helps to understand and engage customers, as well as products and services that are becoming smarter and more connected—sometimes evolving into digital services. This is creating a need for CIOs and IT to become more integrated with engineering in the design, development and delivery of products and services than they were ever before.
The seeds of this change were planted years ago with the emergence of version 1.0 of products that provided a means of connecting to the network, but little else. Today, we see a new generation of products with more sensors and higher-speed connectivity generating gigabytes and sometimes terabytes of information each day. For example, a new aircraft generates 40TB of data per hour! In this world, the line between product engineering and internal IT blurs quickly.
As technology has advanced, so has the responsiveness of traditional “systems of record” IT systems to the needs of the business—though they continue to be used for tracking the business rather than predicting outcomes or foreseeing opportunities. The people tasked with IT have maintained and administered these systems, which requires a different skill set and mindset than that of engineering, where products, services and customer experiences must be continuously developed, tested and shipped, and where new means of engaging the customer are explored. This shift in mindset is necessary but potentially challenging for traditional IT administrators.
Another major shift is the need to be plugged into—and continue to develop—an innovation ecosystem. Traditional global IT companies will remain crucial to running and managing your business, but developing trusted ecosystems so companies can harvest and apply the latest technologies and techniques from new, innovative, agile companies is a crucial new role for the CIO—and one that should be shared by the CTO.
Connecting Products and Customers
Two fundamental developments have forced IT into the fast lane:
Connected products are designed, developed, marketed, priced and maintained very differently from traditional discreet, static products. They can deliver feedback directly to the customer, and they offer valuable insights into customer usage and preferences. To leverage this information, products must plug into an agile product development feedback loop, and be monitored for quality and performance issues and updated regularly with new software releases. This is a world apart from static products, where relevant product information was organized around a SKU in a database.
The design and development of a connected product or service is perhaps the newest and most crucial point of alignment and collaboration between IT and engineering. Understanding how to capture, process and harvest insights from the resulting data will require very close collaboration between the groups.
Engaging the Customer
Engaging the customer directly in a mobile, digital world requires many things from an IT and engineering perspective—a dramatic change not only in how products are developed, but also in the speed at which they are delivered. Engineering no longer has the luxury of a two- to three-year gap between major releases. In fact, a three-week ship schedule is not all that agile for a company that delivers its value as a service: Companies like Facebook might ship multiple new features in a week.
The modern customer expects an always-on digital experience that works on any device and in any location. This adds to the complexity of product design and testing, and accelerates the pace of development, product shipment and management of these efforts.
At the core of this change is the move away from systems of record to systems of interaction. Leading companies are designing and delivering digital customer experiences that require a high degree of interactivity beyond simply being connected. This requires new types of analytics and user feedback loops.
A key challenge facing the Fortune 2000 is there are no packaged systems on the market to meet the speed, agility and instant data demands of connected products and the new modes of engaging and serving customers. Newer technology companies that came to life as these advanced technologies were taking hold (digital natives) are building these systems from scratch (fully custom) to meet the unique challenges of their business and their customers’ needs.
Engineering talent is developing these new systems from scratch and managing their development and delivery. In these organizations, the traditional role of IT is outdated and is being replaced with an increased level of responsiveness, new and more advanced skills, and much closer collaboration with engineering.
The CIO and CTO Must Work as Partners
What If You Are Not a Facebook or Google?
Companies like Facebook, Google and Tesla can invest in building custom systems because they have the top engineering talent and are relatively new companies building on modern cloud architectures. They do not have 20 years of patched-together enterprise systems to deal with.
Clearly this approach will not work for the bulk of the Fortune 2000. So, what steps do companies need to take to compete more effectively in a digital, always-connected and engaged customer world? What are the implications of these changes for talent recruitment, retraining, and technology investment and adoption?
Start the conversation now. IT may remain a separate function for years to come. In fact, many companies will develop two-speed IT functions: one traditional, with systems of record and management; and one that is built by leveraging a modern cloud architecture, using agile development methods, embedded analytics, and connecting products and services directly to customers. These two lines will intersect.
It's essential to get a plan in place for a thoughtful and efficient means of connecting both IT tiers and getting the buy-in from senior management. This is where close and strategic collaboration between a CTO and CIO comes into play, driving the mindset and planning for these changes at the C-level.
Clearly, this is not simply a technology transition—it's also a cultural one. Managing the expectations of employees and involving them in the process will help with a successful transformation. Change that is rapid and pronounced can cause uncertainty, lower morale and trigger unwanted attrition.
Ecosystem development replaces vendor strategy. Long gone are the days when an IT strategy relied on selecting a few major vendors to meet all a company's strategic technology needs. Today, the technology and associated business advantages evolve rapidly, and young, innovative companies are often leading the way in important new areas such as container programming, AI data training and the latest agile development techniques.
Enterprise technology vendors provide great value and offer a global footprint. However, to keep pace in a hyper-connected world, companies must develop a trusted ecosystem of upcoming disruptors that are coupled with traditional global IT suppliers.
Identify skill gaps and training resources. Most companies do not have the resident talent to meet this challenge head on. Clearly, you will need to maintain your business systems and keep evolving them at market speed, but you’ll also need a critical review of talent and skill gaps.
These are new challenges, new technologies and new methodologies. Recruiting and retaining talent will be key, as will training that upgrades skill sets. A collaborative CTO/CIO mindset can look across both organizations in developing the talent needed to succeed.
Take chances. There are a few successful implementations of a wholly digital enterprise, and the variety and intensity of digital experiences is rapidly evolving. Each situation is unique. Don’t be held back by the way you used to think about communicating with customers, developing products or leveraging data. Be the designers of your company’s future. Having a mindset focused on the outcomes and not the organization can help accelerate your success.
The Basics Never Change
For all that is new, there are some axioms that will always be true:
- You must protect the data, even more so now that you have so much data on your customers.
- Moving faster does not mean winging it. You need to maintain good project management hygiene: Manage your resources and deliverables and identify any issues.
- Communicate broadly and regularly. Change is hard, but information can calm the seas.
The drivers of the closer alignment of IT and engineering—commoditized IT, connected products, digital experiences, systems of engagement—are accelerating, and they're here to stay. Some companies are well under way in this process, while others are just beginning.
How quickly and thoughtfully companies navigate this transition will directly impact their ability to compete and succeed. This is less about an organizational approach and more about a strategy and vision that requires these technology and people assets to work together to advance the success of the company and the satisfaction of the customer.
David Sovie is the global lead for Accenture Electronics and High Tech Practice.