Digital disruption threatens to change IT to its core

CAMBRIDGE, Mass.  A great deal of lip service has been paid this year to digital transformation and its impact on the CIO role, but no less critical is the topic of digital disruption.

Digital disruption is so important that it was the lead topic at yesterday’s MIT Sloan CIO Symposium, which saw over 700 top IT leaders and corporate executives gather to tackle the most important topics keeping them up at night. Indeed, a third (32 percent) of CIOs surveyed by the Sloan School said their organizations are now at risk from digital disruption.

For those not familiar with the term, digital disruption refers to the new entrants into an organization’s market or competitive space, new business models that compete against traditional ways of doing business, and barriers to creativity and innovation.

Digital disruption is not a fad or buzz word, Jennifer S. Banner, CEO at Schaad Companies LLC said. It has the full attention of corporate boards, who believe their firms are now “under siege” by all the changes going on with technology and emerging business models.

The result is that the CIO is being thrust into perhaps their most important role ever. Banner said the CIO is now the “field general” needed to strategically lead the organization and staff against this onslaught.

To effectively win out against digital disruption, CIOs need to step out of the technology tactician role and help CEOs and corporate boards understand technology strategy, explained Christopher Perretta, CIO at State Street.

“Board discussions are becoming much more detailed on strategy,” Perrretta said. “My job is to put things into the right environmental context.”

Reinforcing the message that FierceCIO recently delivered, urgency is becoming the number one marching order for IT departments, Perretta said. Despite everything that is already on the technologist’s plate, “We need to go faster.”

At its most extreme, digital disruption promises to change the way IT functions and is organized in just a very few years, noted Pablo Ciano, CIO at DHL Express Americas. He said that as a result of new entrants into its market, DHL is already transforming how it does business, how it views customers and how it services those customers.

“As CIOs, we need to be the gatekeepers,” Ciano explained. “We need to help the organization absorb each change and help it decide where it adds value.”

As a player in the “disruptor” space, Mendix CEO Derek Roos said digital disruption is in fact making every company a technology company, and every employee an IT professional. He stressed that just doing things faster won’t help an organization survive in the new environment. Companies need to completely rethink their digital strategies.

To do that, Roos recommended that organizations create special innovation teams comprised of the best business and technology minds in the company. They should be told to “think like a start-up,” and be assigned the most important projects. Do it right, and these teams can help the organization shave it’s time-to-market to mere fractions of what it has traditionally taken.

“It’s all about new products, new experiences, and new customer engagements,” Roos stressed.

Banner agreed, stressing that there is no time to lose for CIOs.

“You have to have courage. You have to challenge the status quo. You can’t get bogged down in hierarchy,” Banner said. “We will have no stakeholder value left if there is disruption and you haven’t reacted.”

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