I sit in the C-Suite. (Not now, but I used to.)
I am not the CIO or CTO. (Not now, but I used to be.)
I am a retailer (for my purposes here).
I was just asked three questions at an investor conference:
- “What’s your technology plan?”
- “What new technologies are you tracking?”
- “How will these technologies drive revenue and profits?”
These questions – I was just told – are fundamental, especially as everyone aspires to “digital transformation.”
He’s how I would answer if I sat in the C-Suite and had smart CIOs, CTOs and business unit leaders on my team.
“What’s Your Technology Plan?”
“I plan to keep my technology infrastructure (email, storage, office applications, etc.) running fine. I will move most of it to the cloud in 2016 and 2017: I am told that I have no business being in the technology business, anyway, so what not move it all to Amazon, Microsoft, Google, or Rackspace? It’s cheaper and they back everything up. My auditors assure me it’s safe. I agree with the recommendations from my team about moving both infrastructure and applications to the cloud. This will save us money and enable us to focus more on the business than the technology that enables it. Honestly, I cannot wait to divest my technology business. (Laughter).
“I will listen more closely to what the business units are telling me about technology, and I will pay much closer attention to what my competitors are doing with technology. I will go to more technology briefings and receive more technology demonstrations. My HR director tells me that IT needs to become a “core competency,” so we plan to invest in awareness and training – and to make technology a filter through which we pass investment and acquisition decisions. I will ‘touch and feel’ a lot more technology in 2016 than I did in 2013, 2014 and 2015.
“I want to keep technology costs from rising too quickly while at the same time investing in new technologies. I realize that I must spend more money on security – maybe a lot more money. I also realize that it’s a challenge to stay competitive while spending less. But since the cost of technology has generally fallen, I think I can invest more – and more wisely.
What New Technologies Are You Tracking?
“I read Wired, Forbes and Fast Company. Does that help? (Laughter.)
“We have a list of technologies we plan to track and pilot. I developed the list from reading, from talking with my Chief Information Officer (CIO), my Chief Technology Officer (CTO), from competitor intelligence and the people who run the business units. I have spoken to vendors, and technology consultants. I have been told the technologies on my list are ‘game changers.’ We will determine if they work for us through an active piloting program.
“I need to know a lot about analytics. Big data analytics. Unstructured data analytics. The integration of structured and unstructured data to get a full view of my processes, customers, suppliers and employees. I need to know a lot about analytics tools, especially those that enable predictive analytics. I need to make sure that my data people can identify, collect and organize structured and unstructured data, because if they can’t we cannot see enough into our operations, cost or profitability. We have already planned several major analytics pilots in 2016.
“I need to know how to leverage the Internet of Things otherwise know as the ‘IOT.’ Our retail supply chain can benefit from the connectivity and processes that the Internet of Things enables. Always-on sensors can change our business, making us more adaptable, efficient and profitable. We plan to integrate our connected devices to specific locations to learn more about where our customers are, what they do and how we can attract them to make additional purchases. This initiative will dovetail with our analytics initiatives. We have already three IOT pilots.
“As I already mentioned, we need to spend a whole lot more time, money and effort on digital security than we have in the past. Our customer data is growing and we need to make our customers feel that we will do whatever we can to protect their personal data. While we will spend whatever it takes to assure the security of customer, supplier and employee data, we cannot guarantee security. No one can. Unfortunately, this is the world in which we live. We also plan to spend more on physical security, given the state of the world and the nature of new threats.
“We’re going to rethink the way we organize technology at the company. In the 1990s – long before I arrived – technology reported to the Chief Financial Officer. There was one Chief Information Officer who controlled everything. The business units were unhappy because they never got to make decisions about what technology would serve them best. We’re going to change all that: the business units will each have their own digital technology officers. This is a major organizational change that will take us a year to implement, but we expect much more organizational harmony and therefore productivity.
“We plan to retire all of our desktop personal computers and move everyone to mobile devices, especially laptops, tablets and smartphones. Our sales and marketing professionals will initially make the most use of the new devices. Within a few years, all of our employees will be completely mobile.
“We plan to listen more closely to what our customers are saying about our products and services. We will expand our investments in social media including all outward bound communications – and not just through the usual social suspects, like Facebook and Twitter. We will invest in descriptive, predictive and prescriptive analytics based on the analysis of social and other unstructured data.
“The cost of business travel is skyrocketing. Worse, travel is difficult, stressful and often unproductive. We therefore plan to invest in global teleconferencing systems that will immediately connect all of our manufacturers, suppliers, distributors and employees. We plan to reduce the cost of business travel by 50% over the next two years.
“We also plan to reduce our infrastructure costs by closing and combining some offices while encouraging employees to work from home. We have received many requests for this kind of flexibility. When done right, working from home can save us money and simultaneously increase shareholder value – and enable us to fully exploit our new teleconferencing investments.
“We will centralize our physical infrastructure as we decentralize our digital infrastructure.
“We also plan to establish an Innovation Lab at the company, though we do not plan to staff it with only company employees. In fact, we plan to pursue open innovation that leverages the ideas of the best minds regardless of where we find them. We plan to invite Visiting Technologists into the company on a rotating basis. We have already spoken to faculty as several prominent universities who will spend their sabbaticals with us over the next few years.
“We plan to launch an internal university to keep abreast of emerging technologies and to keep everyone aware of the most impactful technologies. We will exploit advances in online training. We also plan to work with a set of universities to customize masters programs in analytics, digital marketing and technology management. These programs will be delivered onsite and online. We will continue to pay for employee education and training because we believe that learning is essential to success – especially in a fast changing industry like ours.
How Will These Technologies Drive Revenue and Profits?
“One of the outcomes of the technology strategy I’ve been describing is deeper knowledge about our customers. Technologies like analytics and social media will enable us to segment, locate and market our products and services. Personalization and customization is the objective here. Segmentation can be monetized. We anticipate significant up-selling and cross-selling opportunities. Location-based selling will become a major revenue stream.
“Our products and services will all – eventually – be mobile. Our customers will be able to find us 24/7, no matter where they are, or what device they’re using. We will fully participate in the digital “buy-it” revolution.
“We plan to reduce our technology capital expenditures by 50% over the next five years while increasing our technology operating expenses by 25% over the same period of time. We also plan to reduce of spending on physical assets by 50% over the next five years. We expect to have fewer offices and much smaller travel budgets. If well executed, our technology plan will contribute significantly to our bottom line.
“New performance metrics will be defined and employed to assess the return on all of our technology investments. Our open innovation initiatives will enable us to pilot emerging technologies quickly and cheaply. These metrics will be published.
“We will also pursue growth through acquisition and divestiture. There’s no reason why we should wait to develop capabilities we can acquire. The open innovation approach will help us reduce the “NIH” (not-invented-here) syndrome that plagues so many stubborn companies. We have no commitment to building everything in-house. In fact, in order to be as agile as possible, we plan to exploit the good efforts of everyone we can find.
“We will profitably grow by shrinking.
“Thank you for your time. I have invited my CIO, CTO and business unit presidents to take any questions you might have for them. I am also willing to answer any questions you might have about the overall organizational and investment pivots we plan to make.”
This article was written by Steve Andriole from Forbes and was legally licensed through the NewsCred publisher network.