Thanks to the cloud, CIOs are effectively transitioning from the traditional role of integration manager to the more strategic position of business process assembler. Rather than screwing in software, they are advising on how their organizations can leverage the cloud to unlock new innovation, enable new engagement models and spark new disruptive business models.
The transition hasn’t been easy. Many CIOs initially resisted the model, viewing it as disruptive and a threat to their command and control. Savvy CIOs have gotten on board. They realize the cloud is here to stay. Rather than fight it, they are embracing and working it to their advantage.
Cloud on their terms
According to Wakefield Research , more than two-thirds of CIOs have adopted hybrid Cloud models. In other words, they are doing things on their own terms. They're implementing cloud solutions alongside on-premise applications and infrastructures to extend the value they deliver Perhaps more important, they are looking to enable new processes, gain new insights, and unlock new value for their business.
The cloud is no longer about lower up-front implementation costs, faster deployment, frequent updates and integration with legacy systems. It’s about innovation and agility. With increasing frequency, companies are beginning to invest in the cloud not just to do the same old things using a different delivery model. They recognize the value in creating new engagement models through which they can achieve new processes and insights to run their business in an entirely new way.
T-Mobile is a perfect example of this. Looking to gain an edge over its larger, more global competitors, the company set out to get closer to its customers and improve their satisfaction. While their on-premise CRM system provided some valuable information, it didn't give them insight into which customers might be on the verge of defecting or which customers might not renew. Like an increasing number of companies, they decided to extend their CRM system using cloud-based applications.
They implemented apps from SAP to support social listening and analytics alongside SAP Cloud for Service to give their entire service and support organization a holistic view into customers. This included all the interactions that T-Mobile had with them and all the issues that they've addressed. They also provided access to a massive knowledge base that can be used to respond to customers with the right answers in real time.
What's happened has been a very dramatic transition. T-Mobile has gone from worst to first in the area of customer satisfaction and renewals. Their service organization has seen their first time problem resolution rate go from less than 15 percent to more than 94 percent. What’s really exciting is that T-Mobile is using these same cloud apps to listen for concerns from customers of their competitors and interjecting themselves into those conversations to woo them over to T-Mobile.
Plenty of other companies around the world are following suit. According to research firm IDC line of business (LoB) executives will be involved in 80% of all new IT investments. They will function as the lead decision makers in more than half of those investments by 2016. They are defining new, competitive business models that can grow revenue and deliver advantage in the market.
While this may seem to project a dim future for the CIO, that is not what we are seeing in the field. If anything, the CIO remains at the center of crucial business decisions only in a born again role.
Extending for advantage
Kaeser Kompressoren is an interesting example. This is a global manufacturer of compressors that go in just about everything you can imagine. Like many companies, Kaeser has built its business atop of core ERP applications from SAP. A few years ago, seeing the proliferation of the Cloud, the IT department shifted its focus to working with functional leaders on identifying business objectives and determining how and where Cloud applications could help to accelerate them.
They extended their core HR system with cloud solutions from SuccessFactors to accommodate more flexible operating models and engage employees in new and innovative ways, ensuring they have the right people in the right roles at the right times to deliver on their goals.
They connected procurement and AP systems to the Ariba Network to fuel a more efficient and collaborative commerce process from sourcing and orders through invoice and payment. Kaeser used social collaboration tools embedded in SAP Jam to drive greater collaboration and capture innovation both internally and externally among key partners.
Falko Lameter, Kaesar’s chief information officer says:
With SAP’s cloud solutions, we can easily integrate our partners and SAP processes, allowing us to share information and gather insight from across the business.
Lameter’s words are telling. They provide a clear indication that today’s CIO is a completely different animal. Notice that he didn’t talk about integrating software, but instead focused on partners and processes.
While every CIO has his own reasons for moving to the cloud, fewer and fewer are doing so on the basis of cost savings and efficiencies alone. Instead, they, like Lameter, are focusing on innovations that can prepare their business for tomorrow and drive outcomes.
And in the process, transforming their role. The Chief Information Officer will soon be dead. Long live the Chief Innovation Officer…
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