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THEINNOVATIVECIO:THECATALYSTTODRIVINGDIGITALTRANSFORMATIONTheshifttodigitalbusinessiscreatingunprecedentedopportunitiesforITleaderstopowernewbusinessgrowthbydrawingontheirtechnicalacumenandinventiveprowess.

January2017

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ExecutiveSummary

Thedigitalrevolutionisreshapinghowbusinessisbeingconducted.Companiesareexploringnewwaystousemobile,social,andotherdigitalchannelstoconnectwithcustomersinthechannelstheypreferandtodriveefficienciesinbusinessandoperationalprocesses.

AmajorchallengecompaniesfaceinexecutingondigitalstrategiesisdeterminingwhichC-levelexecutiveisbestpositionedtodrivethedigitalagenda.ResearchreflectsthatownershipisfracturedacrossmultipleC-levelroles.

AccordingtoastudyconductedbyAltimeterGroup,34%ofdigitaltransformationeffortsareownedbytheCMO,followedbytheCEO(27%),CIO(19%)andtheCDO(15%).

Thankstotheirtechnicalacumenandtheiruniqueperspectiveacrossallfacetsofthebusiness,theCIOisideallypositionedtonavigatethedigitaljourney.

Still,inordertosucceed,theCIOrequiresaninnovativemindsettotestandapplynewtechnologiesandtechniquesthatcanbeusedtostreamlineexistingbusinessprocessesandleadthebusinessforward.Thisincludestheabilitytoattractandretainthechangingskillsandtalentsneededtosuccessfullydrivedigitaltransformationintheenterprise.

Historically,traditionalITenvironmentsweredesignedbasedonlegacytechnologiesandsolutiondeliverymethodologiesthatresultedinlessagileandmoreepisodicvaluedeliverytothebusiness.Withtheexplosionincloud-basedtechnologies,mobilityplatformsandadvancementsinareassuchasanalyticsandartificialintelligence,today’sITteamrequiresanentirelynewsetofskillstodelivervalueatthepacerequiredtomaintaintheirfirm’scompetitiveness.

“CIOsneedtocraftavisionandcreateanenvironmentthatenablesthemtoseedtheirorganizationwiththerightmixofexternaltalentthatpossesstheseskillswhilealsoinvestingtodeveloptheirexistinginternaltalentbaseinordertobuildateamcapableofdeliveringonthepromiseofthesenewtechnologies,”saysDianaMcKenzie,SVPandCIOatWorkday.

InthiswhitepaperbyWorkdayandHMGStrategy,youwilldiscover:

• Examplesofinnovativetechniquesindigitalbusinessthatareresultinginsuccessfulbusinesstransformationbyindustryleaders.

• ThekeytraitsthatarerequiredbyinnovativeCIOstoflourish,includingawillingnesstoberisk-tolerantandapplycourageousleadership.

• Howdata-drivendecision-makingcanunearthfreshinsightsforCIOsandbusinessleaderstoidentifyandactondigitalbusinessopportunitiesaheadofcompetitors.

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“CIOsneedtocraftavisionandcreateanenvironmentthatenablesthemtoseedtheirorganizationwiththerightmixofexternaltalentwhilealsoinvestingtodeveloptheirexistinginternaltalentbaseinordertobuildateamcapableofdeliveringonthepromiseofdigitaltechnologies.”

--DianaMcKenzie,SVPandCIO,Workday

Chart1:ThePersonalityTraitsofSuccessfulCIOs

WhileCIOseachhavedifferentleadershipstyles,astudyconductedbyDeloittedeterminesthatCIOshave20personalityattributes–suchashowaCIOmakesdecisions,workswithothers,andtoleratesrisk.Thestudyrevealsthat75%ofCIOsshare7toppersonalitytraitsandworkingstyles.

Source:Deloitte2016-2017CIOSurvey,surveyorinterviewswith1,217globalCIOs.

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TheInnovativeCIO:APlaybookforSuccess

DigitaltransformationoffersanextraordinaryopportunityforCIOstostepforwardandtakealeadershiproleinhelpingtheirorganizationsleveragetechnologytodisruptthecompetition,breakintonewmarkets,andstayrelevantforthelongterm,saidMcKenzie.CIOsareideallypositionedtoleadtheircompany’sdigitaljourneybecausetheyarealreadyinherentlytheclosestandmostfamiliarwiththenewtechnologiesthataredrivingthistransformation.Thishelpsexplainwhytwo-thirdsofCEOsplannedtofocusondigitaltransformationstrategieswithCIOsservingasmajorplayersinleadingthisshift,accordingtoIDC.

Thankstotheiruniqueviewacrosstheenterprise,CIOsarealsokeenlypositionedtoseetheinterdependenciesthatexistbetweenorganizationalfunctions(e.g.finance,HR)andbusinessunits.ThisdistinctperspectiveallowsCIOstoidentifyopportunitiesforstreamliningsystemsandprocesses,forbridgingorganizationalsilos,andtoapplytransformativebusinessimprovements.

Still,inorderforCIOstosuccessfullydrivedigitaltransformationefforts,theyhavetoovercomeanumberofhurdles.Chiefamongthesearetheculturalchallengesassociatedwithconvincingorganizationalleadersandtheirteamstoembracedigitaltransformation,particularlysinceittypicallyinvolvesmakingchangestotheirworkstylesandtraditionalbusinessprocesses.

Thisstartswithclearlycommunicatingthevisionforthecompany’sdigitaltransformationobjectivesacrossvariousrolesandorganizationalteams,saysMarkOverton,CIOatHKS,Inc.,aglobalarchitecturalfirm.

“TheCIOneedstomakesurethateveryoneunderstandswhattheendgoalisandtheirroleinmakingthesechanges,”saysOverton.“Youhavetocontinuetobreakthatfeardownwithcontinualcommunications.”

Oncethecompany’sdigitalvisionhasbeensharedwithallstakeholders,Overtonrecommendsfindinginfluentialsponsorswithinthebusinesswhoareeagertoembracethechallengesofdigitaltransformationandsupportthevision.Enterprise-widebuy-incanbefurtherstrengthenedbypartneringwithkeybusinessstakeholdersandinvestinginsmallscale,digitally-enabledproof-of-conceptinitiatives.

Partneringwithkeystakeholdersextendsbeyondbrainstormingopportunities.CIOsmusthavetheabilitytocollaboratewithteamsandleadersacrosstheentirebusinessinadditiontokeyexternalstakeholderssuchascustomers,VCs,technologyproviders,andpartners.ExpandingtheirnetworkcanhelpCIOstostayontopofthekeytrendstobetterinfluencetheirowndigitalinitiatives,explainsMcKenzie.

Overtonandthebusinessleadershehaspartneredwithhavesharedco-ownershipondigitalinitiatives.Doingsohashelpeddepartmentheadstogainbuy-infromtheirteamsonprojectsthatwouldbenefittheirgroups.Variousformsofcommunicationwereusedtodriveadoption,

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includingtownhallmeetings,intranetmessaging,andsocialmediapostsinordertoreachdifferentstakeholders.

Assemblingthedigitalteam

Giventherapidlychangingtechnologyandbusinesslandscape,CIOsalsomustdeterminehowtheycanoptimallystructuretheirteamtodeliveronbusinessobjectives.Abalancedapproachinvolvesbringinginfreshtalentfromtheoutsideandcontinuallybuildinguptheknowledgebaseoftheinternalteam.

Amixoffreshtechnologyanddigitaldesignskillsareneededtoreshapethebusiness.Inadditiontoseedingskillsetsforcloud,artificialintelligence,anddatascience,CIOsalsoneeddigitalstrategistswhocanthinkcreativelyaboutcraftingnewbusinessmodelsandareabletoworkwithfunctionalleaderstoplotorganizationalprocessesfordigitalworktasksthatflowsmoothly.

Care.com,aproviderofchild,senior,andhomecareservices,hasleveragedanentirelydigitalbusinessmodeltodisruptanindustrythattraditionallyhadbeenpeer-to-peerorbrick-and-mortar.Bymovingallofitscustomer-facingandback-officeactivitiesonlineandbydigitizingitsservices,Care.comhasgrowntobecometheworld’slargestonlinemarketplaceforfindingandmanagingfamilycare.

DigitaltechnologiessuchasthoseusedbyCare.comofferthepotentialtorevolutionizehowbusinessisdone.Forward-thinkingCIOsareembracingtheartofthepossibletohelpdrivebusinesstransformation.

“TheCIOneedstomakesurethateveryoneunderstandswhattheendgoalisandtheirroleinmakingthesechanges.”

--MarkOverton,CIO,HKS,Inc.

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Chart2:LeadingBottom-UpInnovation

AstudybyMcKinsey&CompanyfoundthatinorganizationswhereCIOsaremoreinvolvedinbusinessstrategy,businessexecutivesaremorethanthreetimeslikelierthanotherstosaythattheITfunctionisveryorcompletelyeffectiveatimplementingbottom-upinnovationandatcreatingahealthyITculture.

Source:“WhyCIOsshouldbebusiness-strategypartners,”McKinsey&Company,February2015.

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FosteringaData-DrivenCulture

Therearemultiplebenefitsforenablingadata-drivenculture.Executivesandknowledgeworkerscanmakefaster,moreaccuratedecisionsusingcurrentorreal-timedata.Meanwhile,organizationalleaderscanuseanalyticstoolstodrilldownintodatatouncovercustomerandbusinesstrendsasthey’reoccurring,allowingexecutivestomakestrategicdecisionsaheadofcompetitors.

Whenbusinessandoperationaldataismadeavailabletoeveryoneandnotjustaselectfew,thisenablestheenterpriseasawholetoreachdecisionsfasterandfortheorganizationtooperateatanacceleratedrate.Gainingthatabilityiscriticalinabusinessenvironmentwheretimeisthenewcurrency.

“Howwellacompanyleveragesdatatosolveproblemsandfindnewopportunitiesiswhatwillseparatethemostsuccessfulorganizationsfromtherest,”saidMcKenzie.“Thepowerofdataisunleashedwhenyoucanaggregateandanalyzeitacrossmultiplefunctionswithinyourorganizationtobetterinformdecisions.”

Shiftingtodata-leddecision-makingcanhaveapowerfulbusinessimpact.Data-drivenorganizationsare23timesmorelikelytoacquirecustomers,6timesaslikelytoretainthosecustomers,and19timesaslikelytobeprofitable,accordingtotheMcKinseyGlobalInstitute.

Tohelpinfuseadata-drivencultureatHKS,Overtonandhisteammeetregularlywithbusinessleaderstodeterminethetypesofinformationtheyneedtomakedecisions.

“Wethenenablesearchingontheinformationthat’shousedwithinourparticularsystemsalongwithpullingtheinformationinfromexternalsourcesthatweneedaccessto,”saidOverton.ThismayincludeinformationthatcanhelpanHKSclientbuildabusinesscasetoconstructasportsstadium.Orthebestwaytostructurepricingforstadiumseatstooptimizerevenue.

Asadvanceddatamanagementandanalyticscapabilitiescontinuetoemerge,thisiscreatingnewopportunitiesforCIOstomakeiteasierforcompanyexecutivestoexploreandobtainvaluefromdatainnewways.

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ABlueprintforPinpointingEmployeeSkills

Inthepast,HKSdidn’thaveasinglerepositoryforallouremployeeinformationacrossthesevencountrieswhereithasoffices.ThismadeitdifficultforHKSprojectleaderstodeterminethebestarchitecttoplaceonaprojectbasedonhisorhereducation,thestatesorgeographieswheretheyarelicensedtowork,thetypesofprojectstheypreviouslyworkedon,specializedskills,etc.

Workday’scloud-baseddatarepositoryofferedaHKSaperfectfitforassemblingprojectteamswiththeproperblendofexpertisewhileenablingitsITteamtofocusonvalue-addedactivities.“Wedidn’twantarepositorywherewehadtomaintaintheinfrastructure,”saidOverton.“Ourteam’svalueisn’tsupportinghardwarebutinhelpingthebusinesstogrowandtoaddvalue.”

WorkdayhelpedHKStoconsolidateitsdatainfrastructureandenabledthecompanytoexpanditsinformationassets.Withawealthofinformationavailableabouteachofitsemployees,includingtheirskillsandbackground,projectleaderscannowsearchthesystemtoidentifythemostsuitableemployeestoplaceoneachprojectteam.

“Italsoallowsustobeproactivesothatifsomeone’sarchitecturallicenseisexpiringinaparticularstate,wecangetonthattorenewit,”saidOverton.

“Ifanemployeehasspecificskills,sayinstructuralengineering,wecanusethattoidentifythebestskillsetsforspecificprojects,”saidOverton.“Thisrepositoryhasbeenextremelyusefulinhelpingustoacceleratethebusiness.”

AUniversityofCambridgestudyfoundthatdata-drivenbusinesseshaveoutputandproductivitygainsthatare5%-6%higherthancompanieswhoseprocessesarenotdata-driven.

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NextSteps

AsCIOslooktodrivedigitaltransformationacrosstheenterprise,it’simportanttorecognizethatdigitizationisaprocessthattakestimetoripen.“Digitizationrequirespatience,”saidOverton.“It’snotsomethingthat’sgoingtohappenovernight.It’saconstantlyevolvingjourneytogetthecompanyfromwhereitistodaytowhereyouwanttogetto.”

HKShasbeendevelopingitsdigitalbusinessstrategyforthepastfouryears.Andwhilethecompany’sdigitalstrategycontinuestomature,Overtonfindsthatheneedstobeaconstantcommunicatorandevangelistfordigitaltransformation.

“Youhavetoberelentlessaboutgettingpeopletohoponboard.Communicationskillsarekey.”

Tohelpinspirekeystakeholdersonthemeritsofdigitaltransformation,McKenziefindsthatit’smosteffectivetodemonstrateexamplesofhowdifferenttechnologiescanhelptheirteamstodotheirjobsmoreefficientlyandeffectively.

“It’salsousefultopullinadvocatesthatyou’vehadprevioussuccesswithinotherpartsofthebusinesswhocanhelpgetotherteamsonboardfasterwithanewdigitalagendaandassistwiththecompany’sculturalmind-shift,”saidMcKenzie.

Meanwhile,achievingquickwinsisanotherwaytogainbuy-infromfunctionalandbusinessleadersonthemeritsofdigitalbusinesscapabilities.McKenzierecommendsstartingwithabusinesspartnerthataCIOalreadyhasastrongrelationshipwithandcollaboratewiththemtoaddressaspecificbusinessproblem.

“Itdoesn’thavetobeahugebusinessproblembutitcanbesomethingrelatedtoaproduct,customers,oranaspectofthecompany’soperations,”saidMcKenzie.Bysuccessfullyaddressingaspecificproblem,“thiswillprovideyouwithanimportantadvocateandthecredibilityneededtoworkwithotherbusinesspartnerstoaddressbiggerchallenges,”McKenzieadds.

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AboutWorkday

Workdayisaleadingproviderofenterprisecloudapplicationsforfinanceandhumanresources.Foundedin2005,Workdaydeliversfinancialmanagement,humancapitalmanagement,andanalyticsapplicationsdesignedfortheworld'slargestcompanies,educationalinstitutions,andgovernmentagencies.Morethan1,000organizations,rangingfrommedium-sizedbusinessestoFortune50enterprises,haveselectedWorkday.

AboutHMGStrategy

HMGStrategyistheworld’sforemostproviderofpioneeringnetworkingeventsandthoughtleadershiptosupportthe360-degreeneedsoftheCIO/ITleader.HMGStrategy’sregionalCIOExecutiveLeadershipSeries,newsletters,authoredbooks,andResourceCenterdeliverproprietaryresearchonleadership,innovation,transformation,andcareerascent.TheHMGStrategyglobalnetworkofover300,000seniorITexecutives,industryexpertsandworld-classthoughtleadersisthestrongest,mosttrustednetworkofexecutives.Additionally,partnershipswiththeworld’sleadingsearchfirmsprovidevitalinsightsintotheevolvingroleoftheCIO.