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 gigaAs 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 Two fundamental developments have forced IT into the fast lane:
Connected Products
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.