Will CIOs Ever Trade Information Technology for Business Technology?

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Companies have become customer-obsessed; IT leaders have not so much as developed a crush. A new study says they'd better warm to the occasion or risk losing their juice.

People, not systems, need to be the CIO's focus.
People, not systems, need to be the CIO's focus.
Fully four fifths of customer service executives are of the opinion that their CIOs and IT departments do not accelerate their departments' success. Three quarters of sales execs and half of marketing leaders feel the same way. That's the dismaying conclusion of an international Forrester Research study of more than 14,000 business leaders and 2,000 IT executives who are tech influencers within their companies.

What's up?  Business leaders are customer-obsessed; CIOs are not, according to Forrester analysts Sharyn Leaver and Kyle McNabb. Competitive advantage in today's marketplace lies in “understanding, interacting with, and serving today's empowered customers,” argue Leaver and McNabb, the study's authors. “Leading firms like Amazon, dm-drogerie markt, Macy's, Marriott, and USAA, do so by shifting their budgets, people, and business structure toward customer knowledge, relationships, and actions.”

Business leaders in the study, by and large, worry that their CIOs haven't gotten the message that the game plan at top companies has shifted from information technology to business technology. Asked to rank the top five business priorities at their companies for the 12 months ahead, they resoundingly ranked  “improve the experience of our customers” second behind “grow revenues.”

Frustrated with the situation at the home office, business executives turn to third-party providers for customer-facing technology, doubting the ability of their IT departments to take on the challenge, according to Leaver and McNabb. But it's a challenge IT execs must accept to remain in the lead conversation.  “As CIO,” they pose, “you must demonstrate that your team can play a central role in achieving new competitive advantage or be left simply managing your company's systems of record.”

To pursue a course toward business technology, which they define as “technology, systems, and processes to win, serve, and retain customers,” Leaver and McNabb advise CIOs to study their companies' customer lifecycles in assembling custom solutions. They suggest a modular, four-tier architecture:

Enterprise marketing solutions  covering marketing automation, analytics, online marketing, mobile marketing, ad tech, and voice of the customer;

Sales and fulfillment solutions, including commerce solutions, sales platforms, in-store solutions, demand management, contract  and order management, distribution, and billing;

Customer service solutions that take in multichannel customer communication, knowledge management, customer service and workforce automation, field service, and customer service analytics; and

Product innovation solutions encompassing product development and design, product lifecycle management, and application lifecycle management.

“Your business leaders have grown accustomed to working with digital agencies and consultancies to build new mobile applications, websites, and loyalty programs,” Leaver and McNabb advise IT executives. "To win their trust, you need to mirror many of the skills and behaviors of these firms.”

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