Customer relationships still key to competitive advantage, says Martin Kuppinger

Customer relationships remain important to competitive advantage in a world of continual digital transformation, according to Martin Kuppinger, principal analyst at KuppingerCole.

“But while the importance of technology to the business continues to grow, technological capability is becoming less relevant to competitive advantage as businesses increasingly rely on standard cloud-based services,” he told the European Identity & Cloud Conference 2016 in Munich.

Product quality is also becoming less relevant to competitive advantage than it was in the past, he said, and the hype around business process efficiency has also passed.

According to Kuppinger, there are five essential areas that businesses need to focus us to build competitive advantage in the rapidly evolving digital world.

“Customer relationships continue to be as important as they have always been, but now businesses also need to focus on services, data analytics, identity, product innovation and smart manufacturing,” he said.

Conversely, Kuppinger said, in the digital world, competitive disadvantage is likely to come from failings in security and privacy, and the high cost, lack of elasticity, lack of agility and cumbersome processes of on-premise business applications.

“We are getting closer to utility computing than we have ever done before, and this trend is only going to continue. Competitive advantage is not going to come from anything that falls into the category of utility computing,” he said.

Kuppinger said that as IT moves increasingly into the business and comes under the control of the business, the IT department is becoming less important.

“For this reason, we need to rethink IT and we need to rethink the roles of the chief information officer [CIO] and the chief information security officer [CISO],” he said.

“Competitive advantage is not going to come from anything that falls into the category of utility computing”

According to Kuppinger, a more relevant way to think of the CIO of the future is as the chief innovation officer who is in charge of managing the digital transformation of the business and the underlying infrastructure, while the future role of the CISO should be governance of security, privacy and data protection across business IT, along with operational technology (OT) and the internet of things (IoT).

“In future, everything should be managed as a service, with the CIO taking care of innovation across IT, OT, IoT, information management, including data management and analytics, while the CISO takes care of the governance of information and services,” he said.

Kuppinger said the top innovations for business agility in future include cloud-based identity and access management (IAM), big data analytics, identity relationship management, user behaviour analytics, real-time security intelligence, smart manufacturing, machine learning and IoT.

The top qualifications for a CISO in future, he said, will be risk management and governance, and the ability to show the business options. ..............................