logisticstechoutlook

Don't Be a Taxi

By David Beckerman, SVP & CIO, The Pasha Group

David Beckerman, SVP & CIO, The Pasha Group

Uber won, taxis lost—don’t be a taxi. The example of Uber ousting taxis is a warning for businesses to adapt to stay relevant. Enterprise IT is no exception.

Enterprise IT is being disrupted and CIOs need to respond with a new approach. Ensuring a digital advantage in the workplace requires CIOs to drive cultural transformation by creating an IT organization and culture that reinvents itself in response to growing technical opportunities and rising business demand. Without a dramatic pivot, technology will be driven outside of IT to the overall detriment of the enterprise. Digital disruption is driving an increase in business demand, at the same time business leaders have access to alternate providers of technical innovation. IT needs to adapt and compete.

When IT Was Technology

When the IT department was the sole developer of systems, a monopoly-based relationship was established. It was necessary for the business to engage IT for improvement and growth initiatives. IT was reactive but performed well when adopting agile methods and reliable outputs, continuously improving project execution. For IT, resource utilization was considered paramount but often resulted in constraints. Incremental improvements were made to operational efficiencies and the customer experience. In this model, IT governance processes are critical to assist with the typical supply-demand mismatch. IT was technology and, as in most monopoly relationships, lost sight that an unintended consequence of governance was rising pent-up demand. Similarly, taxi permits are controlled to maintain a limited taxi supply susceptible to disruption. By artificially protecting the status quo, greatly underestimating overall ridership demand, the stage was set for the unintentional but inevitable digital disruption.

How To Remain Relevant

In today’s digital age, technology requires a much broader perspective and very different skills. Be Uber. Technology is now the business and we are in the midst of a convergence of high demand with many technology alternatives. Technology advantage is often found with partners, strategic alliances, and commercial products. To capture this value, CIOs need to create an external based ecosystem. A culture that promotes external solutions is needed to drive and shape the technology value proposition. This cultural change is the transformational pivot.

“The core competency of a product is to maintain a strategy of competitive advantage over other products”

Products should be the default solution supported by an architecture ecosystem that in turn, supports diversity, integration and product growth. The pivot also affects the IT mindset, changing from a project and milestone orientation to one which is comfortable with uncertainty and imagining possibilities, and is confident that technology drives value. While building internal systems will always have a critical role in an enterprise—combined with execution excellence—the expanded technology landscape will drive an enterprise competitive advantage when managed effectively.

IT groups choosing not to pivot and compete shouldn’t be surprised when they become organizationally marginalized. If IT continues to focus on tuning the governance filter to manage supply-demand, instead of actively improving and changing, they will fall victim to businesses pursuing substitute providers for their technology solutions. The perception that independent technology solutions can be done quickly and simply will create enterprise technical debt. CIOs have an opportunity to respond to this demand by developing a new culture and delivery model that reconciles time to market and innovation with scale. The primary vehicle to drive this change is being a champion of the product and external partner.

Products become the primary instrument to drive operational excellence and customer value. They are inherently positioned to provide a broader range of solutions, innovation, and best practices. The core competency of a product is to maintain a strategy of competitive advantage over other products. Simply, products continue to improve to compete and to meet the changing needs of customers. This differentiation represents an opportunity to provide enterprise value, as well as a source of foresight into industry disruptive technology.

Managing Technology Disruption

Logistics will be disrupted, the only question is when. Most companies do not have the internal capacity or capabilities to leverage a disruptive technology. IoT, AI, Cloud, Blockchains will require investments and expertise. Strategic partners are not only a source of disruptive foresight, they also provide the CIO an opportunity to manage the timing of innovation. A perceptive CIO understands that introducing innovation too late can be as risky as introducing new ideas too early. Organizational development is a key success factor in effectively managing the external ecosystem.

The biggest challenge to the cultural transformation will be organizational change. The product solutions group, in IT, must be committed to competing with business acumen skills, empathy, and an urgency around delivering outcomes and value. What would Uber do? Drive to simplification. The rising role of an Enterprise Product Manager combines business skills with a competency for product capabilities and innovation. The role represents a blended skillset that, I believe, engages the business and shapes the technology demand. The success criteria and metric is not about governance but rather adoption and business value. These business-centric skills are a dramatic shift from the traditional engineering-centric mindset but will yield enterprise competitive advantage.

We’ll never know if the taxi would have won if they responded to disruption. However, we know what happened when they avoided the signals of change. Generally, enterprise leadership want CIOs to adapt. It’s time for IT to modernize by having a business-centric mindset and product focus. Enterprise technology differentiation is at stake.