Too often, CIOs spend time and resources worrying about how to implement the latest and greatest technology – from blockchain to AI – into their business processes. That’s the wrong approach, says Charles Araujo, principal analyst with Intellyx and author of The Quantum Age of IT: Why Everything You Know About IT Is About to Change.
In an interview with The Enterprisers Project, he explains why IT leaders today need to put even more time and effort into learning about business challenges. He also explores the flip side of "every company is a software company."
The Enterprisers Project (TEP): Which technologies should CIOs be looking to adopt right now? Which can be safely ignored for the moment?
Araujo: At this point CIOs shouldn’t be “looking at” technologies at all. The fundamental orientation of every IT executive needs to be centered around the business strategy, how to avoid being disrupted, and most importantly, how to create innovation and become the disruptor.
None of that happens by focusing on technology: It happens by focusing on the business challenges and opportunities. Because of that, the answer to which technologies are important is different for every company because it must be driven by those business challenges and opportunities.
[ How do your peers keep up with tech advances? see our recent story: How to stay current with emerging tech: CIO tips. ]
I know a lot of IT executives don’t want to hear that. They want to hear, “you need to be adopting [fill in the blank] technology,” but that’s not how it works anymore. Technology is now one of the sole remaining drivers of competitive advantage.
And that means that every IT executive has to own the process of figuring out how to use the technologies they have or can acquire to create that advantage. By definition, that means that it will be – must be – unique to them.
TEP: Small [companies] and startups are often in a better position to adopt a hot new technology than enterprises are. How can large companies cope with this built-in competitive disadvantage?
Araujo: Large enterprise organizations are only at a disadvantage if they choose to be. This idea that they need to go slow is complete fallacy and really just an excuse. Companies like GE show the world that even the largest companies can pivot quickly if they want to – it just takes a significant amount of courage and leadership.
The “how” is actually fairly straightforward. First and foremost, you need to have a compelling vision of the future that you can galvanize the troops around. Second, large enterprises should be adopting core tenets of the “lean startup” movement and applying the concepts of agile development methodology at a business process level.
The actual mechanics will vary from company to company, but it comes down to making lots of small bets, giving staff [members] and teams the freedom to explore and experiment without fear, celebrating smart (and fast) failures that identify what doesn’t work and help lead to what will, creating “minimum viable products,” moving toward self-organizing management models, etc. The concepts are all there, and there’s lots of research and literature on all these subjects. Which is why it comes back to vision and courage.
TEP: "Every company is a software company" is an overused phrase that has been mocked in some circles. When does focusing on software and thinking of yourself as a tech company make sense?
Araujo: I think any company that is not actually a technology company that starts thinking of themselves and talking about themselves as a tech company is in trouble. Here’s my definition: You’re a tech company if what you sell and the value your customers purchase from you is the technology itself. This is nuanced, and sometimes legacy companies do in fact transform themselves into tech companies, but I think it’s a dangerous game for most.
While I obviously believe in the promise and importance of digital transformation, most companies are not going to fundamentally change what they sell, or the value they deliver to their customers. Technology will hopefully enhance the experience, change the business model, etc., but the fundamentals of what they sell to whom and the value they derive from it will not change.
The risk of adopting a tech company mindset is that they lose sight of that and give up their greatest advantage: deep, value-driven relationships with their customers. The digital era is not about technology. It’s really about the shift of power to the customer and the importance of the customer experience, powered by data and underpinned by technology innovations.
