in Business Strategy, IT+Strategy

What #CIO/#CTO’s need to learn from Software Executives to drive #Digital Agenda


Digital business is here to stay and we are already seeing the positive impacts of it on the economy through what is deemed as digital economy. Even we have a new digital currency, bitcoin that signifies the shift from real world to digital world. Every industry and every sector of the world economy is now attempting to harvest the opportunities available with the digital economy. This race to capture the value, is putting pressure on lot of corporate executives and more so on the CIO/CTO’s. These executives are tasked with making sense of the digital technologies and also impacts on how it could drive growth.

IT/Technology role has become increasing vital to the digital strategy not just as an enabler, like in the past, but more central to the overall strategy. To harness the power of technology CIO/CTO’s need to devise solutions that deliver value to their customers and more importantly revenue. This is a new area for many executives as they are now tasked with building software based solutions using data and interactions and quite frankly some are lost and are just doing things to stay relevant.

My experience in managing software business taught me few things that I later realized are useful for CIO/CTO’s to anchor as they make their transition into #digital business. The issues and challenges faced by a Software executive are the ones that CIO/CTO’s need to embrace, a departure from their traditional enabler thought process to be successful in the digital economy.

  • Proximity to Paying Customer: Software executives are very much aligned with generating revenue (see below for that perspective) and hence are in straight line to the Customers. Whereas the CIO’s in the traditional firms do not have that straight line. Their Customers are very much internal. Software executives are more involved in Sales process and sometimes participate in Customer discussions (During my software executive tenure, I had been to many sales calls and infact had to share our roadmaps with Customers to ensure they know our investment and improvement plans) making them stay close to Customer.
  • Revenue and Software: Software executive is directly responsible for delivering products that produce revenue. Traditional CIO’s are never on the path of revenue generation rather enabling a capability that sold something else. In digital arena, CIOs are expected to drive revenue with technology solutions. This can be uncomfortable for many, however it would become norm in the future.
  • Innovation: Traditional IT solutions typically relied on the innovations driven by the vendors that produced them. With digital products, a company is responsible for driving innovation with its own products, similar to how a software firm has to deliver innovative features and capabilities. Given the short life of digital products with constant upgrades, the capacity to innovate dictates the sustained success in the market place.
  • Technology: Many IT shops today use technology that has been there for a decade or more. There isn’t a push to modernize to bring parity with the industry technologies. This might be fine when solutions are shielded from Customers and or Partners. This is not acceptable in a commercial software company. Keeping up with technology, delivering new capabilities using these new technologies is the life blood. With digital, CIO’s/CTO’s need to have an aggressive agenda to maintain parity with latest technologies, if not they risk losing customers and market place credibility.
  • Skills:¬†Currently many of the IT shops have the skills of implementing a technology solution that someone has developed, akin to a system integrator role. With #Digital, core software development skills are needed, akin to a commercial software company. Executives have to think about how to attract and retain these highly skilled individuals.
  • Scale: Many of IT solutions currently provided by IT reaches their employees and mostly within the wall of the company. This means there isn’t much scrutiny on delivering/deploying solutions. However, with #digital, the reach is far beyond the walls of the company and mostly includes customers and partners. This requires a new way of thinking about creating scale of the IT capabilities (ex: deployment) with limited tolerance and high exposure in case of failure.
  • Support: Currently, much of the initial support is typically handled by the company’s IT support individuals and ¬†then passed onto a vendor that provided the solution. With #Digital, all the support has to be addressed by the company as they own the solution/software. CIO’s need to build strong support capability including staffing with highly skilled resources.

As you see, there are many parallels between Digital and a commercial software firm in terms of focus, emphasis and skills needed to succeed. To be a true digital led business having just the technology in place is not sufficient. Executives need to start thinking about how to take customers perspective to understand their needs and then think of products that could deliver revenue by solving that need with a technology driven solution. This is what every software executive does on a daily basis.

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