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Customers in the cloud

Customers in the cloud

In the fast-moving digital age, companies are losing track of their customers who are increasingly online, mobile and informed.

No longer are people sitting obediently in front of a television screen, reading full-age advertisements in newspapers, magazines or

brochures, or being seduced by expensive in-store displays. Customers

are flickering from one blog or social networking site to another,

sharing information about products and, worst of all, comparing

prices.

When Starbucks and Dell want customer guidance on how to transform

their products and services, they build customised portals for

discussion and deploy them globally in a matter of weeks. The portals

are becoming vital pieces of the marketing puzzle and the

manufacturing process.

A growing number of companies are tracking what's being said about

their brands on social networking sites, using software scanning tools

to monitor comments and to intercept live uploads over Wi-Fi networks.

But are chief information officers at the front line, helping to drive

the business forward? Are they working to ensure the business is not

blindsided by a more nimble competitor?

Few CIOs engaged

Most CIOs certainly want to, but few are truly engaged, according to

discussions we held with Australian CIOs. The enterprise often sees

CIOs are technology-enablers rather than strategic thinkers.

One CIO confided: "Many companies have Baby Boomer directors on the

board who do not understand how technology, process and business value

go together. They have that attitude that the information technology

department is there to make sure the PCs work and that costs are

reduced."

Companies which run their businesses in silos are also finding it

difficult to integrate the ever-splintering channels and segments now

being traversed by their customers. Some marketing executives still

use the Web presence as a brochure or single-mindedly try to

'monetise' their site rather than noticing how customers are using

technology.

Sale in the mind

If marketing executives are expecting a customer to walk into the

store seeking to be persuaded and marketed to, they have missed the

point. For nearly half of them, the sale has already taken place in

the customer's mind.

From an executive search perspective, it appears that IT departments

have the power, but often not the business acumen and understanding.

And if they do possess good strategic knowledge of the business, they

often don't get mindshare at leadership team level.

Morris Lieberman, global process director of the liquor giant

Foster's, was fortunate to have a career path which included

accounting, finance, marketing and sales before moving into IT. He is

a strong advocate of technology executives knowing, and talking

business rather than technology. "I think many IT executives believe

that if they have the technology under control, they can enter the

boardroom and start talking about value-adding things without really

understanding what value-adding means from a business perspective."

Lieberman advises that in order to expand their value, CIOs firstly

need to deeply understand the real customer-the one who buys the

products.

Entering Vietnam

While on the Asia Pacific leadership team as CIO at the confectionary

company Cadburys, Lieberman was involved by the CEO in strategic

issues such as the entry of the company into the Vietnamese market.

"While technology was a minor part of the process, I was involved in

the detail of the marketing approach and the competitive outlook as

well as the whole route to market," he says. "As the CIO, I was

treated as an equal in those discussions. I gained respect through my

business understanding, not because of my IT knowledge."

Lieberman says that truly transformational change will occur only when

the "Boomers in the boardrooms and management teams" are replaced by

younger, more tech-savvy directors and executives.

Phil Thorpe, former enterprise systems architecture lead and business

improvement expert at BHP Billiton and now working on a change

programme with the National Australia Bank, agrees.

Reinventing business

Thorpe says change is working its way through other industry sectors,

where learnings from supply chain and traditional back office

functions are being used to reinvent the way companies do business.

He cites Virgin Airlines, which has moved its former intranet-based

pre-flight bag check function to the Web to save both airline and

customers time and money.

At the NAB, business executives are regularly being involved in

technology immersion trips to the United States and India where they

can take time out of their day-to-day business functions to explore

possibilities offered by new advances.

Technology executive Tam Vu has seen the challenge from both sides of

the fence, firstly as CIO in an Internet business, the online jobs

company Seek, and also as CIO within a more traditional business.

"At sat at the executive table at Seek, so setting the technology

direction was easier," he says. "The role then turned more to solving

business challenges and how to facilitate a conversation rather than

to present a technology solution. The challenge was to ensure the

business felt as if it was part of the solution development."

In the more traditional business, Tam Vu found that he did not have 'a

seat at the table' when it came to helping the business with customer

acquisition and retention.

Coalition of the willing

He advises CIOs to 'build a coalition of the willing', getting the

passionate business people on board in terms of the customer agenda

and how technology can help achieve their goals.

At Heidrick & Struggles, we believe that today's CIO needs to have a

deeper understanding of business than has previously been a

requirement of the role. They also need to understand the power of

digital marketing and how customers can be found and retained.

Role attributes include a broad understanding of technology, but

additional experience in other facets of business. Often we are

finding such people in unlikely places-sectors other than the classic

IT stream. It is no longer enough to have had a career path through

the IT development ranks.

The successful CIO in the 21st century needs to earn a seat at the

decision-making table by dint of a personality imbued with knowledge

and clarity of business purpose, with powers of persuasion and with

the humility to 'take the team along with them'.

Tim Brewin is a principal in the Melbourne office of Heidrick & Struggles. Ian Smith is a partner of Heidrick & Struggles, based in Sydney.

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