ORLANDO, Fla. -- More chief executives are looking to digital products and services, blurring the lines between physical and digital business, to fundamentally change the way their companies operate -- and CIOs have got to help them do it.
Mark Raskino, an analyst at Gartner, delivered the advice to an audience of IT leaders at the market research outfit's annual Symposium/ITxpo here Monday. Echoing a theme CIOs have become familiar with over the past decade, he emphasized that cultivating digital business innovation -- alongside companies' traditional delivery of products and services -- has to be a priority.
Raskino cited The LEGO Group CEO Jørgen Vig Knudstorp as an example of a CEO marrying the physical core of his business to digital. Knudstorp has likened his 84-year-old toy manufacturer -- which has branched out to produce movies, online games and sites that let people design digital models -- to Nike and Starbucks. Neither company is a toymaker, certainly, but Nike gives customers easy access to its sports apparel, shoes and other products in stores and online, and coffeehouse chain Starbucks has millions on its mobile payment system; these initiatives represent vibrant digital business initiatives that bolster their traditional products.
"This is the thinking pattern of CEOs," Raskino said. "Do not let yourselves be too narrow and stick to just your roots."
In a recent Gartner study of 396 CEOs and senior business executives, growth was the most important strategic priority -- "It's their life," Raskino said. Digital business was seen as the key element in attaining business growth as well as in shaping customer, corporate and IT initiatives.
Slice of digital business innovation
CEOs believe that digital business will help them through the current "earnings recession," the longest period of profit decline since nine consecutive quarters of negative growth between 2007 and 2009, Raskino said. But it will also help companies stave off digital business competition that's getting ever-stronger and more innovative.
Domino's Pizza Enterprises CEO Don Meij sees the adoption of emerging drone technology as a prime differentiator, Raskino said. The pizza chain plans to deliver pies by drone in New Zealand by the end of the year.
Sure, many in IT and elsewhere in organizations will be skeptical, wondering whether miniature flying machines will ever really make door-to-door pizza deliveries, or whether the whole thing is just a PR stunt. But cynicism will kill you, Raskino said.
"The moment that drone pizza delivery works, everybody will want it," he said. "This is where we have to commit and go out with some of these big ideas. Preempt, rather than wait for Google or Amazon to do it to you or to do it first."
All are digital now
The CEO of another tech behemoth weighed in on the subject. Speaking over satellite from Redmond, Wash., to a packed auditorium in Orlando on Tuesday morning was Microsoft CEO Satya Nadella.
"If you're a retailer, you're a bank, you're a manufacturing company, you're a digital company as well now," said Nadella, who was scheduled to appear in person in front of thousands of assembled CIOs but was advised not to fly because of a back injury. "It's about building your own in-house digital capability. That's where CIOs have a huge role to play -- to be able to build that out."
Such CEO perspectives make CIO Sean Reddington think about speed.
"For me it's understanding how I can get digital faster," said Reddington, who leads IT at OrthoIndy, a for-profit orthopedic hospital in Indianapolis. Physicians there use electronic health records to check in with patients, track their medical history and make diagnoses. That's a step in the right direction, he said, but he's looking at ways of more swiftly processing info for the web and mobile devices.
"How can I digitize the touch points on the front end and the back end to make the experience for customers even better?"
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