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CEOs want their CIOs to transform their businesses with the use of digital systems and services. But if European CIOs want to help their companies steal a competitive lead through tech into the next decade, then they will have to take a pioneering approach to innovation that draws on a wide pool of internal and external expertise.
Almost half (44%) of global organisations are undergoing some kind of major digital change that will fundamentally affect their organisation, according to this year’s annual IT leadership research from recruiter Harvey Nash and consultant KPMG, which polled just under 4,000 CIOs and technology executives across 84 countries.
The research suggests that radical transformation results from growing expectations by the board and CEO of faster revenue growth, more value-generating innovation and changing business models, all enabled in part by stronger internal and external partnerships.
Albert Ellis, chief executive at Harvey Nash, said European CIOs who want to encourage innovation must get people to think creatively, and CIOs who want to drive transformation must ensure that innovation is ingrained within their company’s DNA.
“What works is getting people into a structured environment, such as an innovation think tank, and rewarding the process of good ideas or behaviours,” he said. “If you put the right infrastructure in place, you do get innovation. But if you do find an individual that comes up with good ideas, then you do need to reward that success in some way – and that means all the people who have been involved in the creation process.”
One IT leader who is taking a structured approach to creativity is Michael Cole, chief technology officer (CTO) for the PGA European Tour, who is actively hunting for innovations that his team can use to build the intelligent golf course of the future.
The PGA European Tour, which is responsible for managing and operating men’s professional golf in Europe, is currently running an innovation contest alongside technology partner Tata Communications to help identify more opportunities for digital transformation.
The innovation contest, which is down to its final stages, is supporting startups as they search for innovations in connectivity and data. The finalists are focusing on how to transform the game through multilingual content for global audiences, second-screen viewing using augmented reality, and enhanced real-time engagement with TV audiences.
“Golf is technically complicated, but with that complexity comes opportunity,” said Cole. “I think that’s why we will set ourselves apart from other similar competitions, because we are unique in sports and we have unrivalled opportunities. But we are also building on a platform of world-class tournaments, with leading industry-leading expertise.”
Kristian Hjort-Madsen, who joined the executive board at Danish banking and insurance firm Alm Brand in October 2018, agrees that European CIOs need to think differently if they want to push digital transformation. As CIO and chief innovation officer and on the board, Hjort-Madsen thinks his role is novel when it comes to IT leadership.
Read more about innovation in the IT department
- To compete in the digital age, businesses will need to work quicker, partner where appropriate and upskill staff, according to McKinsey & Company.
- NatWest is kicking off a tech apprentice programme, with its digital innovation hub set to play a key role.
- German investment banking giant Deutsche Bank is opening a division focused on innovation as part of its plan to digitise all business operations.
“I think it’s unusual to have someone responsible for innovation and digital on the executive board,” said Hjort-Madsen, who spoke at a recent TBM Council event in London. “A lot of the stuff I’ve been doing is about bringing IT and business together. As digital leaders, we’ve been talking about this sort of stuff for ever – this is my third agile transformation. But at Alm Brand, we’re doing it a bit differently.”
The organisation’s collaborative approach draws on agile methodologies and cloud technologies to encourage people in all lines of business to think about how to develop creative solutions to its customers’ challenges. Hjort-Madsen said CIOs who push hard at the beginning of a transformation strategy are likely to deliver better results in the long term.
“If you’re really aggressive when you start working in a new way and you’re very disciplined around things like lean and scrum, and you have the business working in that way, it becomes so powerful,” he said. “Be honest with the board about how aggressive you want to be, how big the cultural change will need to be and how many people you will need to bring in.
“The big issue for us is how to enable our people to work collaboratively. We have aggressive targets, but we need a lot of great ideas on how to get there. That’s why incremental changes are important. Listen to your customers, show your solutions and pivot on those in a much more dynamic way.”
Like Hjort-Madsen, Nik Puri, senior vice-president for international IT at delivery firm FedEx Express, said an agile approach can help businesses think more creatively about digital transformation. His business is using the specialist management tool Appito to assess and communicate the cost of IT services for planning, budgeting and forecasting purposes.
“I need visibility across 200 countries – you want to know how much is being spent,” said Puri, who also spoke at the TBM Council event and is based at FedEx Express’ European headquarters in Amsterdam. He said Appito provides insight into the operational value of technology systems and services.
“It’s allowed me to have a discussion with the CFO where I can say which department is spending the most on IT,” he said. “We wanted to make sure we had a baseline. Then we looked at application optimisation – because we knew we could deliver value.”
Puri said the data from Appito allows him to have quick, productive conversations about the value of IT across different regions and areas of the business. Executives can then think much more carefully about IT spending. He added that they can optimise their portfolio of supplier partners, even potentially in some of the most pioneering areas of digital-led transformation.
“We always step back and ask what the headline would be 10 years from now – do we have the means to deliver those capabilities?” he said. “In most cases, we don’t have that capability. But as it’s so far out, people are willing to work with you and you can create a cross-functional team to think about technological changes. And then, once you know the architecture and capabilities that are required, you can go to the business and say, ‘forget 10, let’s do it in three years’.”