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Staying relevant through digital disruption

Staying relevant through digital disruption

The greatest challenge faced by enterprises dealing with digitalisation is the question of how they will stay relevant in response to big change and industry disruption.

Digitalisation has dramatically increased the complexity of long-term planning, driven largely by constant changes in customer expectations, frequent innovations in business models and an exponential rate of technology innovation. This introduces many variables, risks and uncertainties into the already-challenging task of preparing for the future.

How can an enterprise become better at anticipating and acting on the next big thing that will impact their industry? While this question is at the heart of business strategy, as a CIO you must be proactive in helping your enterprise to build the capabilities necessary to find the answer.

One of the problems with many enterprises is that CIOs and other senior leaders often rely on common leadership practices that work well in traditional circumstances, but are no longer adequate in response to the complexity of digitalisation. They assume that a certain level of predictability and order exist in each new challenge and treat all new situations as if they fit into the same mould as past experiences. But this isn't the case.

When working with your business leadership teams on preparing a response to digitalisation, you will need to ask different questions and look in different directions to understand the potential threats and opportunities it presents. To help with this process, Gartner has identified three key actions that you must take when helping your enterprise respond to the complex situation of digitalisation and prepare for potential disruption.

Invest time and resources to probe for opportunities and threats

When dealing with a complex situation such as digitalisation, CIOs need to ensure enough time and resources are available to probe for potential opportunities and threats. If you are scanning for trends and potential disruptions five years in the future, look back 10 years to see what you can learn from the hype and reality of the past decade. When evaluating potential opportunities and threats, look beyond the usual list of top-10 technology trends and look for analogies in other industries that share a similar type of offering or value proposition as your own, and see if there are innovations you could apply.

As you begin probing and experimenting, be sure to include a broad set of inputs in your research. In addition to emerging technologies, look for potential changes in customer needs. Avoid focusing purely on innovations in your current set of products and services. This constrains you to an inside-out perspective. Focus instead on the needs of your customers that aren't being met today and look for new customers whose needs are not being met. Digital businesses will often separate out addressable customer value from monetisation.

As you probe for new opportunities, make small investments before committing to big change. Be sure to fire bullets first and focus your efforts on everything you can learn from the low-cost, low-risk experiments, so that you can be confident when it's time to rollout the cannons.

Read more: Fonterra works with startup Job Done to bring tech innovation to dairy farms

If you are scanning for trends and potential disruptions five years in the future, look back 10 years to see what you can learn from the hype and reality of the past decade.

Andrew Rowsell-Jones, Gartner

Make sense of the findings

As a CIO, your most crucial contribution is to use your unique position to make sense of what you are uncovering. This is the thoughtful part of your role and will require you to explicitly carve out time to focus.

Read more: Digital transformation projects spur growth in enterprise application software market

Explore ways to free up your time, such as strengthening your Office of the CIO or creating a COO of IT role to focus on the operational management of the IT organisation. Freeing up time for thoughtful consideration of your long-term plans will be an essential part of transitioning to a digital business leader. Once you have some time to absorb and understand the outputs from your probing efforts, you can make sense of the findings for your enterprise by providing essential context and clarity, holding strong opinions weakly and by focusing on the human angle.

Respond with leadership and action

While probing and sense-making will provide you with new ideas concerning potential digital opportunities and threats, your effort will have limited impact on business outcomes unless you also respond with leadership and action.

To ensure that your enterprise is able to not only anticipate, but also to act on the next big thing to hit your industry, you will need to clarify and articulate the digital vision and purpose for your enterprise, develop a digital business strategy that is robust rather than perfect, create a new mode of operation for digital execution, and then allocate resources.

Read more: The IT function no longer holds a monopoly on IT: Every employee is a digital employee

Andrew Rowsell-Jones is a research vice president in Gartner's CIO & Executive Leadership research team, advising clients on mobile, lean IT, performance metrics, portfolio management, IT cost reduction, stakeholder management and defining the management agendas for CIOs.

Send news tips and comments to divina_paredes@idg.co.nz

Follow Divina Paredes on Twitter: @divinap

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