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Strategic implications of the new normal

How CIOs are navigating the next 12 months

In early September, a select group of IT leaders took part in a virtual roundtable discussion moderated by ServiceNow CIO Chris Bedi. Bill McDermott, ServiceNow’s president and CEO, delivered opening remarks.

The participants represented some of the world’s biggest, most successful organizations. The conversation explored the challenges that CIOs, CDOs, and other IT executives face as they accelerate the deployment of digital services in the COVID era and beyond, while positioning their organizations, employees, and customers for success.

People + software

McDermott outlined several core priorities for senior leaders in business and government. First, it’s all about people. Coronavirus has refocused all organizations on the health and well-being of their people, McDermott said. “In the COVID-19 environment, to achieve your company mission, you’re focusing more on people, their health and wellness, and the sustainability of your organizations more than you ever have before,” he said.

As a prime example, ServiceNow recently deployed a comprehensive return-to-work solution for a major ride-share company—from preparing and monitoring returning employees to implementing a reconfigured office environment to accommodate COVID health protocols. “Emergency response management is becoming a big idea in the COVID and post-COVID world,” McDermott said.

[Read also: The next normal for CEOs]

Second, McDermott argued that all companies need to think of themselves as software companies. “Every company is now trying to become a software company, build a software factory, and have the intelligence and speed to be faster than competitors,” McDermott said. That’s why digital transformation represents a $7.4 trillion market over the next three years, according to IDC.

Though 9 out of 10 companies have a digital-first strategy, only 4 in 10 are prepared to deal with digital disruption in the form of competitive products or services, research shows. Business models are fundamentally changing, and business model innovation through digital transformation is the name of the game.

Earlier this year, he said, as the pandemic provoked a massive increase in streaming video, one global entertainment company invested in an abundance of premium content to quickly launch a new streaming channel that, as a result, now has 60 million subscribers.

Customer experience, the employee experience, and IT as an innovative disruptor are coming together in new business models to beat larger, slower incumbents, McDermott said. “Systems of record are now being invested in, so that decision makers can deliver faster,” he added. “We’re excited because we feel we’re at the epicenter of digital transformation.”

What’s on a CIO’s mind?

During the discussion period, several IT leaders from global companies echoed the sentiment that McDermott expressed in his opening remarks: “Getting companies ready to move fast is everything.”

So how do you do that? Or in the words of ServiceNow CIO Chris Bedi: “How do we break down silos and create integrated operation teams by brands that can get the data from the start, see the trend and have the ability and authority to react across the supply chain?’”

Four major themes emerged from the discussion.

1. Clock speed

More than ever, companies need to reduce time-to-value to remain competitive. The CIO of a global consumer staples company said the pandemic has made everything move faster. “Our desire is to spot the consumer trend as quickly as possible and respond to that,” he said. “The pressure to go from six weeks to one or two weeks is a big theme.”

Before the pandemic, the group CIO of a global energy company said, “If you had told us what we would have to do, I would have said there’s no way our systems will be ready. We hadn’t even theorized what could be done.” But “change management for critical areas dropped to zero,” he said. “We rolled out things faster than we ever had.”

2. Data, data, data!

How can CIOs and IT leaders leverage data, AI, and machine learning to turn deep insights into rapid results for their organization and its customers?

The CIO of a global shipping company said the pandemic had forced his organization to stop using data for transactional purposes and start using it for deeper insights that can transform the business. “We were looking at applications rather than the clairvoyance that data can bring when you unleash it,” he said. “The one thing we’re really having to transform is the idea of data first. I know that sounds trite,” he added. “I think that’s a huge move that we’re all making.”

The CTO of a large insurance company noted that 2020 has combined a global pandemic with historically destructive fires in the Western United States and a litany of hurricanes on the Eastern seaboard. “We’re looking at the data to see [future] risks for customers,” he said. “How do I use data to find patterns that help us run our businesses or serve our customers differently?”

3. Process mining

The COVID shutdown and shift to distributed work has been a moment of reckoning for many business processes. It has also created pressure to rethink them, and to find solutions faster than previously thought possible.

While COVID is horrible, it will prove to be the biggest digital accelerator that could have happened.

Think of COVID as an exam question, said the CDO of a global computer technology company: Did your digital transformation strategy have the right objectives?

“For us, it’s how to be a digital first responder and demonstrate that these strategies were the right ones,” the CDO said. The sudden change that coronavirus brought to business allowed his organization to evaluate “how that platform of action complements the data model, how we need to organize around data flow and not systems, how we need to mirror a changing market,” he said. “While COVID is horrible, it will prove to be the biggest digital accelerator that could have happened.”

Different industries face unique digital transformation challenges. The president of a major industrial conglomerate asked: “How do you allocate resources today, from a digital transformation perspective, against those businesses where we can create the most value/superior returns in the long term?”

“That’s what keeps me awake at night,” the executive said. “Are we optimizing something that doesn’t have long-term value? Or are we allocating resources in a way that will create long-term value for all our industries?”

4. Simplification

The pandemic provided a golden opportunity to reduce inefficiency by automating processes. However, the group agreed that sometimes an organization needs to slow down and streamline before committing boldly to automation. “Until COVID, we were all on this treadmill,” said the CIO of a major aerospace company. “Now, it’s about stepping back and saying, ‘Let’s do this right the first time.’”

Slowing down to speed up can have a positive impact on the bottom line, said the CIO of a global consulting company. As an example, he noted that his firm had retooled its billing process to eliminate inefficiencies that slowed the customer’s ability to pay. “We asked for too much information, and made it too hard for people,” he said. “We simplified the process and automated more aspects [of it]. That took cycle time out of the billing process.”

Now, he said, “we actually get paid more quickly by our customers, thank you very much.”