Digital Enterprise or Digital Front Office?

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CIO Magazine’s latest State of the CIO report tells us that only 25% of 722 CIOs surveyed think that their IT organization is positioned as true business colleagues within the rest of their organizations.  This dismal positioning is consistent with PwC’s Digital IQ findings that show that only a quarter of companies put IT at the front of business innovation, rather than hiding them in the back office to only contribute to internal improvements.

This leads me to ask if only a quarter of enterprises value the strategic, game changing impact of digital technologies? Certainly not. However, I do think that many of these additional firms do not or cannot put IT and the CIO as the catalyst or at least a key cog to drive the value.  This leads to phenomenon like the call for a Chief Digital Officer that continues to be in play and possibly gaining some momentum.

The trap is that we check the “digital” check-box based on market-facing digital investments and ignore the other possibilities for strategic, market facing investments in human capital and recruiting, customer service, supply chain management and many other areas.

I was just speaking with a senior IT leader in a global consumer products company who is responsible for serving the Marketing function. He has been struggling to find the right operating model to balance market facing innovation and customer engagement with longer-term effectiveness and efficiency. The marketing department has a technology innovation lead and many of the leaders have a digital marketing background. He’s grappling with creating a productive and collaborative working relationship with the marketing leaders. They have been at it for a while and are log jammed.

I suggested that they try to build a list of the major things they do that overlap marketing and tech - market data analytics, app innovation and development, etc. and then figure out who should do what and why. I recommended that they consider using an upcoming campaign as a test case. This is not about IT taking over anything that doesn’t make sense. It’s about involving experts in design, architecture, integration and information to make the solutions more robust, more extensible, more manageable, etc. for the short and long term.

There’s a difference between the idea of weaving “digital” into everything you do vs. just focusing on the front office. If companies put all of their technology innovation eggs into the digital front office model it must be done consciously and  it does not absolve them from involving IT leaders from beginning to end in their tech decision-making. Not doing so will cause downstream issues when they try to integrate disparate systems, services and data sets for analytics, post M&A activity, addition of new information products and services and other strategic moves.

Image shared by Mike Warot

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