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The Digital CEO
Companies should hire a chief digital officer, as this is going to need some serious focus to make it happen
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I have no doubt that the next industrial revolution is on us, and its digital. The Facebook situation notwithstanding, things are moving very rapidly. People’s lives are an open book as all information is online, and when money transactions become digital, what else is left?
The above being said, this is somewhat of a contrarian article, but one that I hope will help you reflect as you continue to plan and invest in your digital future.
Here’s a story. I recently met the CEO of the leading global bank, one that has been a pathbreaker in terms of digital transformation and has built a strong reputation for being innovative. They run hundreds of cool tech projects a year, worth hundreds of millions of dollars of investment. A significant part of our conversation was focused on accelerating time to market for a number of digital innovations they were planning, including an attempt to successfully update their mobile app two to three times a month! That got me thinking, and is the basis of this article. While I am all for a rapid digital transformation, are there a few other things that we need to keep in mind?
I am a strong believer that everything in life needs to be paced, even if the speed is scorching. The reality is that human beings (yes, even the so-called millennials), can only absorb so much change at one time, no matter how much better the new feature additions are. In fact, each change needs to be supported by an active campaign to drive change not only with the customer but within the organisation. And we all know creating organisational change is not easy. Bringing in digital is a cultural change.
Technology is affecting all aspects of business. From a customer interaction standpoint, besides going online, its virtual relationship managers, self-service, and chatbots. From a process standpoint its robotic process automations (RPA) that could easily cut processing headcount by 30 percent. Then there is artificial intelligence/machine learning that can allow you to use computing technology to make rapid decisions (remember high frequency trading?). Then there is the whole BI and predictive analytics piece — this could tell you which customer is going to buy from which channel, when. The server rooms are dead — everything is in the cloud. The good news is if you get this right, you could cut cost quite significantly, and at the same time drive revenue through micro-segmentation and digital customer acquisition. Business-to-business (B2B) businesses can be turned into business-to-consumer (B2C) businesses.
Lots of fun stuff. But there is the issue of ROI on tech investments. In this euphoria, who is running the numbers, and actually figuring out if the investments are providing the returns they should? The metrics for determinining a return is pretty straight-forward — increase in revenue or a reduction of cost on a sustained basis. In all my conversations with CEOs and CTOs, this topic has not come up regularly. However, till three years ago when they talked about buying a new system — ROI was very important.
So, what does this all mean? All I am saying is that as you plan your budgets and tech strategy for 2018, it would be a good idea to do a stock taking of all new tech investments that you have made in the last two or three years, make an honest assessment what has worked, and what has not (shut it down). This assessment must be also an honest assessment of whether your customers have valued the new features or services provided. And carefully create a 2018 CoolTech initiative list. Also hire a chief digital officer, as this is going to need some serious focus to make it happen.
Would it be great to use some common sense, before AI takes over?
Disclaimer: The views expressed in the article above are those of the authors' and do not necessarily represent or reflect the views of this publishing house. Unless otherwise noted, the author is writing in his/her personal capacity. They are not intended and should not be thought to represent official ideas, attitudes, or policies of any agency or institution.