CIOs have traditionally overseen the design, development, and management of IT systems for the internal use of the CIO’s company. But as businesses become more technology-led, the CIO is being brought into the development of solutions that can be sold and marketed to other companies.
In a survey of CIOs by IDC, 58% say they proactively identify business needs and opportunities, up from 28% the year before. 53% of CIOs are spending more time collaborating with LOBs in operations and product development this year.
Julio Bermudez, vice president for APAC for Amplitude, acknowledges that COVID has accelerated the adoption of many things digital.
"If you take a step back and look at Asia specifically, 65% of the GDP will be completely digital. This is just a massive transformation which had begun many years ago but has really accelerated over the past couple of years. Even just from 2020, product usage has grown by 54%," he continued.
He concedes a huge amount of change in the past couple of years and believes it represents the digitisation of the Asian economy.
Why projects fail
The more complicated an endeavour, the more it is prone to fail, or at least components of the process fail. McKinsey estimates that up to 70% of complex, large-scale change programs do not reach their stated goals.
"Common pitfalls include a lack of employee engagement, inadequate management support, poor or non-existent cross-functional collaboration, and a lack of accountability. Furthermore, sustaining a transformation’s impact typically requires a major reset in mind-sets and behaviours—something that few leaders know how to achieve," according to McKinsey.
Bermudez says the key to successful transformation is the ability to understand how people are behaving within their digital products. He acknowledges that companies that are getting it wrong are investing a 'ton' but are not clear how those projects and infrastructure improvements are actually affecting the bottom line.
"For instance, as the CIO partners closer with marketing, it is really about understanding how that user acquisition spend is performing - not just on marketing metrics but the bottom line," he started. "This means looking all the way to the actual development of the product itself, like what features are powering engineering time leads, what are people spending their efforts, their money and their attention, and how is that actually impacting the bottom line?"
Julio Bermudez
He commented that "CIOs who are getting it wrong – they are saying yes to things, they are saying no to things, but they’re not understanding the 'why'."
Strategies that drive value
Asked what CIOs need to do to ensure that the company's digital strategies drive value, Bermudez noted the shift in who uses data in the organisation. Where previously use of data is limited to a small group of people, "now we need to see all that decision-making pushed back to the peripheries – to the lines of business – to allow people that are at the business level to start driving their own insights," he continued.
He commented that companies that claim to be data-driven from a product development standpoint, are not that data-driven for product development. "A lot of time, what people are relying on is the HIPPO - the highest-paid person’s opinion. When we see it start to go the right way is when organisations are really looking at that user behaviour as the guiding line of where to spend their digital efforts," he added.
On the topic of product development in the digital economy, Bermudez is of the opinion that total control may not be the right approach. Instead, he advocates releasing some control.
"There are still ways to shape the organisation from a digital strategy without having to control every single piece of data, and that could come from the types of investments you make with tooling, or it can just be cultural.
"People who are closest to the businesses need to have a louder voice and allow the democratisation of data. They need to really enable their team and create a culture around that enablement to allow people to focus on how users are behaving within their products to drive marketing decisions, product development decisions, and business decisions," he continued.
Advice for leadership
Acknowledging that CIOs are custodians of an organisation's data and systems, Bermudez suggests keeping three things in mind: people, culture, and the systems, as part of any digital project.
"If you think about the nature of being a custodian, it has to do with shifting the mindset to focus on how to get data into everybody’s hands and allow them to be able to draw insight themselves, and not just rely on centralised reporting, or centralised data sources," he opined.
Hee added that the more that leaders can lean into key business partners and listen to them, the more they can understand the business problems and be a part of the solution.
"But if I’m not actually listening to the business problem, and I’m simply just providing an infrastructure for just data gathering, then I’m probably not as effective," he concluded.
Click on the PodChat player and listen to Bermudez talk about this increasingly important role of the CIO as a strategic advisor to the business.
- How has the pandemic-induced increase in the adoption of digital products changed the priorities of today’s CIOs?
- What are CIOs getting wrong in their digital strategies?
- What then should CIOs focus on to ensure their digital strategies truly drive business value?
- Can you share some examples of companies with effective CIOs?
- How can product data help CIOs continue to stay relevant and ensure business growth?
