Today these changes require going beyond simply introducing new technologies to digitise the company.  As a result, we asked leading CIOs globally from across industries to explore how they are pioneering successful digital transformations to accelerate innovation and strategic enablement across their businesses.

CIOs’ executive brief: three ways to update IT skills for digital transformation

Keep your own IT skills current. “Read, read, read as much as you can,” advises Theresa Payton, CEO of Fortalice Solutions and former White House CIO. “Then ask yourself, ‘what am I going to do—while I’m transforming the business—that allows me to transform myself in my role?’” Take a multi-tactic approach to building IT staff skills. Wondering whether to train, hire or outsource? All of the above, advise IT leaders. “The skills of those who report to the CIO are much more technical than they used to be,” says Marc Probst, CIO of Intermountain Healthcare. Engage with tomorrow’s IT experts today. Jaguar Land Rover, anticipating a shortage of skilled engineers, has engaged with more than 2m young people in the UK, encouraging them to consider STEM (science, technology, engineering and maths) education through its Inspiring Tomorrow’s Engineers initiative. Next, the company plans to engage with 2m more young people, this time worldwide, by 2020.

 

The pace at which new technologies—cloud, big data analytics, virtual reality (VR), artificial intelligence (AI), robotics and more—are developing is breathtaking. But if you really want to hear CIOs gasp for air, ask them about the new demands CIOs face as they seek to turn clever IT innovations into real-world business transformation.

CIOs must manage increasing IT complexity and the growing demands of business stakeholders. As Simon Bolton, CIO of UK-based Jaguar Land Rover also notes, modernising business strategies and aligning them with emerging technologies remain a CIO imperative: “My biggest aspiration is to help Jaguar Land Rover to be seen as a technology leader outside of the company within the automotive space.

“We’ve seen the industry changes: electrification, connected cars, autonomous driving, etc. We need to transform our business so that we’re ready to maximise those opportunities. In today’s world, where customers’ expectations are changing very quickly, we need to have systems that can respond to those changing requirements.”

CIOs face the dual challenge of maintaining business critical systems while adapting the business to leverage new technologies. Renata Marques, Latin America CIO of Whirlpool, advises CIOs to “have a very solid and stable foundation that doesn't consume the agenda of innovation and digital transformation.”

And yet many CIOs and their staff are not necessarily prepared for all of this change and the major implications for the workforce and skills. In a recent survey conducted by McKinsey, more than 60% of business executives said that due to advancing automation and digitisation, they’ll need to retrain or replace more than a quarter of their workforce between now and 2023 [1]. 

To make many of these changes successfully, integration of business and IT knowledge will be essential. Ritesh Sarda, CIO of Sun Life Financial Hong Kong says:

“Technologies without the business acumen or those that fail to solve the relevant business problem are absolutely useless. I think CIOs have to become more business savvy and have to be integrated and engrained into the business so that we know how we can use technology to resolve business challenges and make things forward-looking from an industry perspective."

 

New demands = New opportunities

Although balancing traditional business needs with the desire for innovation is always a challenge, the same changes that have reshaped the role of the CIO have also created new opportunities for workforce transformation.

Indeed, one reason CIOs need new skills is the way IT has moved beyond the back office and into customer-facing products and services. Consider today’s new cars. Essentially rolling data centres, they’re equipped with computerised engine components, Wi-Fi networks, GPS navigation, backup cameras, lane-departure warning systems and more. Tomorrow promises even more onboard IT, including electric batteries, voice-activated controls and self-driving capabilities.

Alongside these new tools, customers’ growing IT savvy puts even more pressure on CIOs. At Jaguar Land Rover, designers work on a seven-year product life cycle. For traditional automotive designers and engineers, to create a highly complex vehicle, that may seem like the blink of an eye. But for today’s consumers, it’s more like an eternity.

One path forward may be the adoption and implementation of Agile practices. “We need to do all we can to remain agile,” Mr Bolton says. “That’s becoming ever more challenging as technology moves faster and faster. As a company, we need to wrap our heads around this and make sure we’re all going forward at that speed.”

Ms Marques of Whirlpool brought in an Agile coach into the IT function to train her team once a week: “We started to transform our projects by adopting Agile methodology and delivering technology to the business in a different way. This is something that we’ve worked on a lot, not to just to speed up our process, but to create this future of innovation.”

Mr Bolton of Jaguar agrees that these changes bring new opportunities for workforce organisation. Historically, Jaguar Land Rover’s strengths have been engineering, manufacturing and design. Today, the company seeks to add to those strengths by placing greater emphasis on technology.

“Increasingly, we’re going to have to demonstrate real leadership around technology,” Mr Bolton says. “That requires a shift in skills, not just in the technology function, but across the company.” 

That said, non-IT employees aren’t as far behind as they used to be, and like many consumers, both IT and non-IT staff have gained technological sophistication too. “One of the changes we’re going through,” notes Mr Bolton, “is we’re insourcing—not for every skill—but we’re bringing back in certain areas of technology that we’ve outsourced over the past few years”.

Marc Probst, CIO of Intermountain Healthcare, a not-for-profit health system based in Salt Lake City, Utah, has had a front-row view of the dramatic changes in overall familiarity with technology. Technical positions at Intermountain that formerly reported into IT and Mr Probst have shifted to its clinical and financial business units.

For Mr Probst, that means assuming a new role. “I’ve become more of a co-ordinator,” he says, “and a technical resource to make sure the things they’re doing fall within our security parameters and don’t blow up the system. It’s really different.”

Ms Marques of Whirlpool similarly describes the importance of being a technical resource for the business and understanding its strategic needs: “Our role as CIO is to be the conduit—to convert all the technical knowledge into a single strategy and not have a lot of different technologies everywhere not in conversation with our business.”         

                                                                         

The value of reskilling and mentorship

Though IT employees still generally have a better understanding of technology than other employees, given the fast-changing nature of technology, many CIOs find that their current IT staff members still struggle to keep up with consumer or colleague expectations. It’s a rare IT department that employs experts in big data analytics, AI and VR. Yet these skills are increasingly in demand. Some even say the IT industry faces a talent shortage.

Two ways forward may be hiring for greater diversity and improving mentoring and internal training. In theory, that should not be difficult. One person advocating for those changes is Theresa Payton.

“Recruiters tell me, ‘there’s a war for talent, and we just can’t find qualified people.’ I reply, ‘Well, maybe it’s because you and the hiring managers are all looking for the same people. There are only so many unicorns to go around,’” says Ms Payton, CEO of cyber-security firm Fortalice Solutions. Ms Payton was also formerly the CIO at the White House under George W Bush’s presidency from 2006 to 2008—and the first woman to hold that position.  

Instead, Ms Payton recommends that CIOs start by considering the personal qualities they’re looking for in new hires, what she calls “non-negotiables”. The rest, she maintains, can be gained with training.

Ms Payton practices what she preaches and has implemented a mentor-protégé programme at her cyber-security firm. She explains the rationale: “Take advantage of your own amazing people and have them be responsible for some of the retooling and retraining of your workforce. Make it part of their workday. Build it into your resource plans that you’re going to train, coach and mentor the next generation. Doing that creates that cross training, that esprit de corps.”

Ms Payton also works hard to keep her own skills and knowledge up-to-the-minute. While working in Washington, DC, she got into the habit of waking at 3:30 am to read and make other preparations before the day’s first briefing. “You have to constantly be a student of the job,” she says. “Stay close to the business, and stay close to the technologies.”

 

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To learn more about The EIU's Pioneering Leadership programme, find a full range of insights, including more Q&As, articles and an in-depth report, here.

[1] McKinsey, “Retraining and reskilling workers in the age of automation” January 2018. https://www.mckinsey.com/global-themes/future-of-organizations-and-work/...

In theory, new technologies drive digital transformation, but CIOs often find it’s not that easy. In fact, adopting new technologies to drive business results requires the CIO’s strategic involvement from the very beginning, from choosing the technologies to ensuring they’re working effectively across the enterprise.

“The CIO must be totally cognizant of all emerging technologies and solutions coming onto the market,” says Ritesh Sarda, CIO of Sun Life Financial Hong Kong. “But at the same time, technologies that fail to solve a relevant business problem are absolutely useless.”

Indeed, a recent survey of CIOs conducted by executive recruiter Harvey Nash and professional-services firms KPMG found that enterprise digital strategies were described as “very effective” by fewer than one in five IT leaders [1].  In another survey, conducted by IT advisory firm Gartner, more than 90% of respondents said their organisations haven’t yet reached “transformational” levels of maturity with data analytics, even though those companies’ CIOs have identified that technology as their number one investment priority [2].

 

Innovating with the customer in mind

Some CIOs, however, are doing an excellent job of identifying and evaluating new technologies for digital transformation. Increasingly, their organisations are doing the same with customer-facing products and services and implementing new technologies across their companies’ operations.

That’s the case at Whirlpool. The world’s leading home-appliance provider, Whirlpool ships more than 70m products a year, many of them digitally enabled. Various Whirlpool appliances now interact with artificial intelligence (AI) tools for analytics, automatic ordering services and several virtual assistants for voice control. Renata Marques, CIO of Whirlpool Latin America, and her IT team recently helped to develop a “smart” beer cooler, not yet on the market, that replenishes consumers’ beer supplies by detecting when beer is running out, then automatically ordering more from a partner marketplace. Moreover, the company recently acquired a mobile app called Yummly; it uses image recognition to inventory the food in a consumer’s pantry, then recommends recipes using only those ingredients on hand.

Ms Marques has encouraged her teams to leverage new technologies for consumer-facing innovation. The Latin America division, based in São Paulo, Brazil, brings in roughly a quarter of Whirlpool’s global sales, which totalled US$21bn last year. “Because digital transformation is part of our strategic agenda,” Ms Marques says, “our IT organisation works closely with engineering, marketing and other business areas.”

And Ms Marques is also adopting Agile, a methodology borrowed from software development, to speed up her new IT projects. Her team recently evaluated a new web platform using an Agile concept known as MVP. Short for minimum viable product, it provides just enough features to garner user feedback. “Agile is something we’ve worked on a lot,” Ms Marques says, “to not just speed up our process, but also create our future of innovation.”

For Ms Marques, “creating a future of innovation” includes a cloud-first strategy that has been key to helping her IT group meet business needs. For example, using the cloud, Whirlpool Latin America recently implemented a new commerce platform for its KitchenAid home appliance brand to improve the consumer experience. The project, though massive, was completed in less than five months. “Without our cloud-first strategy,” Ms Marques says, “we could never have delivered such a big project so quickly.”

 

Partnering for innovation

Partnerships are another way for CIOs to implement emerging technologies for digital transformation. It’s an approach that works well for Sun Life Financial, a Toronto-based provider of insurance, wealth and asset-management solutions to individuals and corporate clients.

Due to Sun Life’s size—it has 33,000 employees, offices in over 25 countries and assets under management in excess of C$930bn (US$736bn)—moving quickly on new technologies can be a challenge. “As a large enterprise, sometimes we cannot innovate that far,” says Mr Sarda, who joined Sun Life in 2006 and became CIO of its Hong Kong unit in 2016. “So we partner with accelerators and incubation centres where we can pick fintechs and partner with them to evolve a business idea.”

These partnerships have led to some innovative results. One partnership has resulted in Sun Life’s adoption of software robotic automation, also known as “tech bots”, to process customer applications that previously involved lots of painstaking paperwork. The software robots now mimic the work previously done by humans, including underwriting, examining historical records and reviewing claims records. “Where there are inherent system deficiencies, we can create bots rather than putting humans in to do the dirty jobs,” Mr Sarda says.

Another project enhanced by partnership is Sun Life’s implementation of chatbots. These AI implementations populate a website to answer customers’ frequently asked questions. Partners are also now working with Sun Life on blockchain, a platform for decentralised applications, and facial-recognition systems for identity authentication. At any given time, Mr Sarda and his team are partnering with as many as ten specialist companies. “Then,” he adds, “we see which ideas eventually become mature.”

 

DIY tech

At Intermountain Healthcare, a not-for-profit health system based in Salt Lake City, Utah, CIO Marc Probst and his team have taken a different approach to new technologies: they build what they need and then turn their solutions into new products and services for the company.

One internally developed IT innovation at Intermountain has even led to the formation of a separate company. Called Empiric Health, it offers software designed to help surgical teams control their costs by assessing how different procedures like supply utilisation or staffing affect health outcomes. “That was actually a piece of software we wrote for our internal operating rooms,” Mr Probst says. “We found it was saving us tens of millions of dollars a year, so our people said, ‘Hmm…this may be something of value to other organisations.’”

And using emerging technologies to drive business innovation can also help create better outcomes for patient health. For example, Intermountain clinicians developed a care process model to guide care provision for acute respiratory disease syndrome (ARDS), an illness that’s often fatal. While the model reduced mortality rates, Mr Probst’s team was able to leverage AI and Intermountain’s data to not only replicate the model for ARDS but also identify additional risk factors to further improve the quality of care.

“That’s one of the very real powers of AI. It took what would have taken months or years and allowed it to happen in days,” says Mr Probst.

As Intermountain shows, digital transformation involves shifting advanced technology beyond the IT department’s walls, bringing IT and the business ever closer. Although sometimes challenging, the introduction of new tech offers meaningful change for patients, providers and staff.

 

Putting it all together

Though every organisation is at a different stage of their transformation, there are several practices CIOs can keep in mind along the way:

Stay aware of new technologies and potential use cases to meet new customer demands; Leverage partnerships for innovation to pool resources and take risks; and Be creative about translating IT solutions into business innovations.

In the end, the opportunities offered by emerging technologies may be well worth their weight in gold.

To learn more about the Pioneering Leadership programme, find a full range of insights, including more Q&As, articles and an in-depth report, here.

[1] KPMG, “Press release, the Harvey Nash / KPMG CIO Survey 2017” May 23rd 2017, https://www.hnkpmgciosurvey.com/press-release/ [2] Gartner, “Gartner Survey shows organizations are slow to advance in data and analytics”, 2018 https://www.gartner.com/newsroom/id/3851963