CIO-Driven Transformation

There’s Never Been a Better Time to Seize the Opportunity

There’s Never Been a Better Time to Seize the Opportunity

Why Digital Transformation Is a Golden Opportunity for CIOs

Translating Hype into How

Buzzwords tend to draw a lot of attention before they’re fully understood. An innovation launches a trend, from which a phrase is coined, which becomes the top-of-mind topic du jour in boardrooms. Generally, everyone agrees on why the topic is important, but the practical aspects—the what and the how—often lack clarity.

This is true of the increasingly urgent buzz around digital transformation. While there is universal consensus as to why transformation is a business imperative (Uber versus Yellow Cab, Netflix versus Blockbuster, or Amazon versus physical stores, for instance), it has become clear that the manner in which an organization addresses “what” and “how” could very well determine whether that organization will live to see the buzzwords of 2020.

This presents CIOs with a unique opportunity to become the key enablers, arbiters, and architects of digital transformation. The CIO has the ideal perspective and firsthand knowledge to make a business case for transformation. Moreover, the CIO is uniquely equipped to build a cohort of business leaders and technology experts that can help lead the organization down the path of digital transformation.

Buzzwords tend to draw a lot of attention before they’re fully understood. An innovation launches a trend, from which a phrase is coined, which becomes the top-of-mind topic du jour in boardrooms. Generally, everyone agrees on why the topic is important, but the practical aspects—the what and the how—often lack clarity.


This is true of the increasingly urgent buzz around digital transformation. While there is universal consensus as to why transformation is a business imperative (Uber versus Yellow Cab, Netflix versus Blockbuster, or Amazon versus physical stores, for instance), it has become clear that the manner in which an organization addresses “what” and “how” could very well determine whether that organization will live to see the buzzwords of 2020.

This presents CIOs with a unique opportunity to become the key enablers, arbiters, and architects of digital transformation. The CIO has the ideal perspective and firsthand knowledge to make a business case for transformation. Moreover, the CIO is uniquely equipped to build a cohort of business leaders and technology experts that can help lead the organization down the path of digital transformation.

This e-book will explore:

What digital transformation actually is—and what it means for business

Why digital transformation presents an important opportunity for CIOs

How to start—and continue—a digital transformation journey

What digital transformation actually is—and what it means for business

Why digital transformation presents an important opportunity for CIOs

How to start—and continue—a digital transformation journey

01

Defining and Designing Digital Transformation

The CIO’s Balancing Act

The CIO’s Balancing Act

It’s a tall order to balance the demand for rapid change, a limited budget, and the requirement to mitigate the impact on day-to-day operations. This places the CIO in the unenviable position of being stretched in many directions, such as between the opposing forces of business initiatives and organizational inertia.

Balancing these tensions, however, has the benefit of giving the CIO the best possible perspective from which to guide the organization’s digital transformation. And in doing so, the CIO will see his/her role change from “‘purveyor of technology’ to the ‘agent of change’ for the enterprise.”1

It’s a tall order to balance the demand for rapid change, a limited budget, and the requirement to mitigate the impact on day-to-day operations. This places the CIO in the unenviable position of being stretched in many directions, such as between the opposing forces of business initiatives and organizational inertia.

Balancing these tensions, however, has the benefit of giving the CIO the best possible perspective from which to guide the organization’s digital transformation. And in doing so, the CIO will see his/her role change from “‘purveyor of technology’ to the ‘agent of change’ for the enterprise."1

The CIO must partner with business leaders to define the initial, most attractive opportunities for digital transformation. At the most basic level, this involves determining the technological and organizational requirements to enable three fundamental capabilities:

Create delightful customer experiences.

Transform processes and business models.

Empower
workforce efficiency and innovation.

The CIO must partner with business leaders to define the initial, most attractive opportunities for digital transformation. At the most basic level, this involves determining the technological and organizational requirements to enable three fundamental capabilities:

Create delightful customer experiences.

Transform processes and business models.

Empower
workforce efficiency and innovation.

Create Delightful Customer Experiences

The seemingly infinite potential of technology has created a digital appetite among customers that even digital-native companies find difficult to sate. As a result, every advancement—regardless of industry—sets a moving standard against which even unrelated organizations are tacitly measured.


A CIO whose strategy is to simply catch up runs the risk of falling further behind. A transformative CIO must seek to implement a customer experience architecture that is built for flexibility and unpredictability.

By providing a simplified omnichannel experience to each customer, digital businesses are increasing customer loyalty. At the same time, businesses are gaining deep insight that helps improve products and services and predict future purchase behavior. The CIO’s objective should be to empower innovations that delight the most demanding customers while simultaneously helping the business achieve current objectives.

Create Delightful Customer Experiences

The seemingly infinite potential of technology has created a digital appetite among customers that even digital-native companies find difficult to sate. As a result, every advancement—regardless of industry—sets a moving standard against which even unrelated organizations are tacitly measured.


A CIO whose strategy is to simply catch up runs the risk of falling further behind. A transformative CIO must seek to implement a customer experience architecture that is built for flexibility and unpredictability.

 

By providing a simplified omnichannel experience to each customer, digital businesses are increasing customer loyalty. At the same time, businesses are gaining deep insight that helps improve products and services and predict future purchase behavior. The CIO’s objective should be to empower innovations that delight the most demanding customers while simultaneously helping the business achieve current objectives.

2/3

A global Accenture study found that two out of three consumers have switched service providers because of poor customer experience.2

Gartner predicts that 90 percent of companies will compete primarily on customer experience.3

Transform Processes and Business Models

The impact of the Internet of Things (IoT) is just now being realized. A virtually infinite stream of data from an ever-increasing number of connected devices presents vast potential for both advancement and displacement. The development of new business and revenue models is imperative and inevitable across virtually every industry.

A CIO committed to digital transformation would not only enable new business models as they arise, but would also plan to actively test and deploy novel, data-supported opportunities at a moment’s notice. The benefits stretch across every industry and major business area. They include faster time to market, increased agility, new revenue streams, and significant business process improvement.

However, fully realizing these benefits will require a deep investment in real-time analysis, automation, and optimization. The goal is to create an organizational architecture that is custom built to adapt to any stimulus at any time while reducing risk and exposure.

50%

Percentage of CEOs who expect widespread disruption within their respective industry4

Empower Workforce Efficiency and Innovation

To successfully transform their companies, CIOs must seek to create a culture where the workforce is digitally engaged, empowered, and inspired. They otherwise risk depreciating what is perhaps their business’s most important asset—innovative employees.

There is a romantic notion that innovation happens in an incubator (or a garage), generally at the hands of a few brilliant nonconformists with designs to reshape society. But in reality, most innovation is the result of tireless trial and error to address a perceived inefficiency. And who better to perceive an inefficiency than the employees who experience it on a daily basis?

The modern workforce is populated with modern consumers—a reservoir of digital natives who share the expectations and standards of your customers. By making it easier for these employees to learn about, collaborate on, and engineer the positive experiences they expect, an organization can boost productivity and workforce satisfaction. The organization itself can become an internal incubator that accelerates innovation.

A global study by Gallup found 87 percent of employees are “disengaged”—at a cost of US$450–$500 billion per year.5

Jump in earnings per share when companies reduce employee dissatisfaction to 10 percent. 5

2/3

A global Accenture study found that two out of three consumers have switched service providers because of poor customer experience.2

Gartner predicts that 90 percent of companies will compete primarily on customer experience.3

Transform Processes and Business Models

The impact of the Internet of Things (IoT) is just now being realized. A virtually infinite stream of data from an ever-increasing number of connected devices presents vast potential for both advancement and displacement. The development of new business and revenue models is imperative and inevitable across virtually every industry.


A CIO committed to digital transformation would not only enable new business models as they arise, but would also plan to actively test and deploy novel, data-supported

opportunities at a moment’s notice. The benefits stretch across every industry and major business area. They include faster time to market, increased agility, new revenue streams, and significant business process improvement.


However, fully realizing these benefits will require a deep investment in real-time analysis, automation, and optimization. The goal is to create an organizational architecture that is custom built to adapt to any stimulus at any time while reducing risk and exposure.

50%

Percentage of CEOs who expect widespread disruption within their respective industry.4

Empower Workforce Efficiency and Innovation

To successfully transform their companies, CIOs must seek to create a culture where the workforce is digitally engaged, empowered, and inspired. They otherwise risk depreciating what is perhaps their business’s most important asset—innovative employees.


There is a romantic notion that innovation happens in an incubator (or a garage), generally at the hands of a few brilliant nonconformists with designs to reshape society. But in reality, most innovation is the result of tireless trial and error to address a perceived inefficiency. And who

better to perceive an inefficiency than the employees who experience it on a daily basis?


The modern workforce is populated with modern consumers—a reservoir of digital natives who share the expectations and standards of your customers. By making it easier for these employees to learn about, collaborate on, and engineer the positive experiences they expect, an organization can boost productivity and workforce satisfaction. The organization itself can become an internal incubator that accelerates innovation.

A global study by Gallup found 87 percent of employees are “disengaged”—at a cost of US$450–$500 billion per year.5

5x ROI

Jump in earnings per share when companies reduce employee dissatisfaction to 10 percent. 5

02

A Golden Opportunity for the CIO

Create Consensus Through Collaboration

Create Consensus Through Collaboration

Much of the focus on digital transformation has a dire overtone—and understandably so. The prospect of disruption is real, with countless examples front and center. But many business leaders, while bombarded with these messages, see only the expense and complex technology behind digital transformation—often underestimating its benefits.

However, a CIO who sees the benefits of transformation, and is intent on making a business case for it, can prove that the effort and expense are dramatically outweighed by a virtually limitless upside. This presents an unprecedented opportunity for the CIO to lead the collaboration between the business and IT and create consensus around a path to success.

Much of the focus on digital transformation has a dire overtone—and understandably so. The prospect of disruption is real, with countless examples front and center. But many business leaders, while bombarded with these messages, see only the expense and complex technology behind digital transformation—often underestimating its benefits.

However, a CIO who sees the benefits of transformation, and is intent on making a business case for it, can prove that the effort and expense are dramatically outweighed by a virtually limitless upside. This presents an unprecedented opportunity for the CIO to lead the collaboration between the business and IT and create consensus around a path to success.

On average, digitally enabled organizations experience:

higher profitability6

increased revenue6

higher valuation6

On average, digitally enabled organizations experience:

higher
profitability7

increased
revenue7

higher
valuation7

Moreover, because digital transformation requires cultivation of cross-organizational collaboration, CIOs need to transcend traditional responsibilities and establish the cross-leadership relationships needed to enact dramatic change throughout every level of the organization.

CIOs have never had a better opportunity to add value to their organizations—if they embrace the challenge.

-Bob Evans, "The Top 10 Strategic CIO Issues for 2016," Forbes BrandVoice, Jan. 4, 2016.

Moreover, because digital transformation requires cultivation of cross-organizational collaboration, CIOs need to transcend traditional responsibilities and establish the cross-leadership relationships needed to enact dramatic change throughout every level of the organization.

CIOs have never had a better opportunity to add value to their organizations—if they embrace the challenge.

-Bob Evans, "The Top 10 Strategic CIO Issues for 2016," Forbes BrandVoice, Jan. 4, 2016.

03

Six Considerations to
Unlock Digital Transformation

Build a Strong Foundation for Transformation

Build a Strong Foundation for Transformation

Driving digital transformation is not an easy task. Line-of-business (LoB) leaders are looking to change their business processes and achieve tangible business outcomes, but to do this, they need to collaborate closely with IT leaders. The key for the CIO is to align the business environment and technology to enable positive digital business outcomes.

This necessitates a single conversation between business and IT. Therefore, the most effective way to begin transformation is to establish clear points where the priorities of business and IT converge.

Driving digital transformation is not an easy task. Line-of-business (LoB) leaders are looking to change their business processes and achieve tangible business outcomes, but to do this, they need to collaborate closely with IT leaders. The key for the CIO is to align the business environment and technology to enable positive digital business outcomes.

This necessitates a single conversation between business and IT. Therefore, the most effective way to begin transformation is to establish clear points where the priorities of business and IT converge.

At Cisco, we identified six key considerations that underpin a successful digital transformation in virtually any organization. Here’s what we found:

At Cisco, we identified six key considerations that underpin a successful digital transformation in virtually any organization. Here’s what we found:

Facilitate New Business Models

Digital business changes a company’s operating model, helping the company do business and make money in ways that were previously unimagined. Digital approaches help enable new data flows, insights, and capabilities. But to convert digital capabilities into new growth opportunities, companies need to converge fragmented business processes and rethink the way work gets done.

Organizations are seeking new routes to market—to develop innovative offerings and revenue models—through digital business. This means shifting internal IT efforts to be more supportive of LoB requirements. Naturally, this results in a cultural shift, with IT and the LoB working closely together and sharing a conversation focused on delivering positive business outcomes.

Facilitate New Business Models

Digital business changes a company’s operating model, helping the company do business and make money in ways that were previously unimagined. Digital approaches help enable new data flows, insights, and capabilities. But to convert digital capabilities into new growth opportunities, companies need to converge fragmented business processes and rethink the way work gets done.

Organizations are seeking new routes to market—to develop innovative offerings and revenue models—through digital business. This means shifting internal IT efforts to be more supportive of LoB requirements. Naturally, this results in a cultural shift, with IT and the LoB working closely together and sharing a conversation focused on delivering positive business outcomes.

Simplify Everything; Deliver IT as a Service

To support digital business, IT needs to establish itself as a services-based organization. This requires the CIO to implement a culture in which IT is run as a business. IT service owners assume responsibility to deliver a particular service to the enterprise. They need to make sure that it runs well, delivers the right user experience, meets cost targets, and manages security risks. An IT service owner is responsible for everything pertaining to that service.


Ownership is reinforced through regular reviews to track key performance indicator (KPI) service metrics such as

delivery, costs, quality, user experience, and risk on a service-by-service basis. These insights help management make better decisions and weigh trade-offs based on business goals.


At Cisco, every service offered by IT is expected to reduce cost by 5 percent on an annual basis. These savings are, in turn, reinvested in the form of an innovation budget. By allocating these funds to innovation, IT can expand its focus beyond day-to-day work to begin to transform every project and big initiative.

To support digital business, IT needs to establish itself as a services-based organization. This requires the CIO to implement a culture in which IT is run as a business. IT service owners assume responsibility to deliver a particular service to the enterprise. They need to make sure that it runs well, delivers the right user experience, meets cost targets, and manages security risks. An IT service owner is responsible for everything pertaining to that service.

Ownership is reinforced through regular reviews to track key performance indicator (KPI) service metrics such as delivery, costs, quality, user experience, and risk on a service-by-service basis. These insights help management make better decisions and weigh trade-offs based on business goals.

At Cisco, every service offered by IT is expected to reduce cost by 5 percent on an annual basis. These savings are, in turn, reinvested in the form of an innovation budget. By allocating these funds to innovation, IT can expand its focus beyond day-to-day work to begin to transform every project and big initiative.

Build Modular IT and Automate

Modular IT involves breaking code into reusable chunks and simplifying and reusing code whenever possible to improve efficiency and control costs. This modular approach supports digital business by speeding time to capabilities that can be continually developed and redeployed to support any service.

At Cisco, we considered four areas of modularization. While the specifics at each company will vary, the four areas of modularization are likely common and the examples will spur thinking. They include:

Infrastructure

Instead of custom operating systems and applications, everything now runs on the virtualized layer on a hypervisor in OpenStack. We use common storage services and APIs to engage the infrastructure with Cisco Application Centric Infrastructure (ACI), exposing network capabilities to applications.

Human-to-Machine Interaction

An example of this is the improvement in providing technical support. Each new IT support case opens a collaboration room where the technical support agent can bring in appropriate subject-matter experts to collaborate and solve problems.

Machine-to-Machine Interaction

An example is credit card processing. Once written individually onto many different systems, now payment is consolidated to a single processor, with a single approach across the company.

Data

Cisco has modularized its customer data from 18 separate repositories (requiring custom development for access) to a single customer master producing a single data set.

These modularization initiatives have simplified processes, increased the speed of change, and reduced costs across business units.

Deliver Data that Informs Business Decisions

Digital business generates and takes advantage of a greater volume, velocity, and variety of data than ever before. This powers extraordinary insights, innovation, and business value. But it can be difficult to know where to go to get the right data to solve specific business problems.


In most enterprises, data is broken up in functional areas across the organization. A successful digital business can break down these disparate areas and take advantage of shared, scalable technology so data elements can be connected and act as one.


At Cisco, we moved our data into a single, consolidated, and unified view across the entire company. The enormity of this task meant taking the right approach was crucial.

 

We took an architectural approach, starting with shared platforms. Then we collected and brought together cleaned datasets to establish a single master set. Finally, we provided a simplified platform for business users to access the consolidated data.

Infrastructure

Instead of custom operating systems and applications, everything now runs on the virtualized layer on a hypervisor in OpenStack. We use common storage services and APIs to engage the infrastructure with Cisco Application Centric Infrastructure (ACI), exposing network capabilities to applications.

Human-to-Machine Interaction

An example of this is the improvement in providing technical support. Each new IT support case opens a collaboration room where the technical support agent can bring in appropriate subject-matter experts to collaborate and solve problems.

Machine-to-Machine Interaction

An example is credit card processing. Once written individually onto many different systems, now payment is consolidated to a single processor, with a single approach across the company.

Data

Cisco has modularized its customer data from 18 separate repositories (requiring custom development for access) to a single customer master producing a single data set.

These modularization initiatives have simplified processes, increased the speed of change, and reduced costs across business units.

Deliver Data that Informs Business Decisions

Digital business generates and takes advantage of a greater volume, velocity, and variety of data than ever before. This powers extraordinary insights, innovation, and business value. But it can be difficult to know where to go to get the right data to solve specific business problems.


In most enterprises, data is broken up in functional areas across the organization. A successful digital business can break down these disparate areas and take advantage of shared, scalable technology so data elements can be connected and act as one.

At Cisco, we moved our data into a single, consolidated, and unified view across the entire company. The enormity of this task meant taking the right approach was crucial.


We took an architectural approach, starting with shared platforms. Then we collected and brought together cleaned datasets to establish a single master set. Finally, we provided a simplified platform for business users to access the consolidated data.

Adopt Continuous Delivery

The recipe for faster innovation often entails continuous integration of incremental, small-value developer code, with more frequent delivery of function. Success requires that IT teams get as close as they can to the business for whom they are developing services to deliver the best product as rapidly as possible.

Traditionally, we developed big capabilities with a three-to-six-month rollout. Now, the collective team—business together with IT—determines the minimum viable product and takes on responsibility for its delivery and success. We start with the smallest value we can deliver and test it out. Then we repeat, continuously delivering enhancements. This ensures that IT is building the right thing to support the business.

Over 18 months, we’ve moved from 23 percent continuous delivery to 73 percent.7

Over 18 months, we’ve moved from 23 percent
continuous delivery to 73 percent.7

Embed Security Everywhere

Digital transformation simply can’t happen if the organization can’t keep critical assets safe. As a foundation for transformation, a CIO needs to implement continuous, policy-based threat protection across the edge of the network, throughout the entire infrastructure, and within the data center and the cloud. Pervasive security also has the benefit of accelerating growth and improving development by automating previously manual processes and freeing up resources that can be allocated to innovation.

For example, a common concern with continuous delivery is that quality and security will be sacrificed for speed. So we relentlessly focus on deploying an end-to-end, policy-based security approach to better secure every aspect of our value chain. We ensure quality from day one based on acceptance criteria. We automate test cases and embed checks into the release process.

Through these efforts, we have doubled our delivered capabilities, reduced vulnerabilities by 60 percent, and increased quality by 92 percent.

Digital transformation simply can’t happen if the organization can’t keep critical assets safe. As a foundation for transformation, a CIO needs to implement continuous, policy-based threat protection across the edge of the network, throughout the entire infrastructure, and within the data center and the cloud. Pervasive security also has the benefit of accelerating growth and improving development by automating previously manual processes and freeing up resources that can be allocated to innovation.


For example, a common concern with continuous delivery is that quality and security will be sacrificed for speed. So we relentlessly

focus on deploying an end-to-end, policy-based security approach to better secure every aspect of our value chain. We ensure quality from day one based on acceptance criteria. We automate test cases and embed checks into the release process.


Through these efforts, we have doubled our delivered capabilities, reduced vulnerabilities by 60 percent, and increased quality by 92 percent.7

Summary

Define, Defend, Align, Transform

The digitally transformative CIO is an invaluable asset to an organization—and how effectively an organization empowers its CIO to lead the transformation could very well be the deciding factor in that organization’s success. 

DEFINE


The CIO is equal parts technological and business expert and therefore is likely best equipped to accurately define the need for—and the value of—continuous, open-ended transformation.


DEFEND

 

Because the CIO exists at the nexus of business and IT, the CIO is equipped to serve as an evangelist to both and help ensure organizational buy-in. 

 

ALIGN

 

An effective CIO must extend influence into every process across every aspect of business in order to establish a singular set of shared objectives between business and IT.

 

TRANSFORM

 

Once the organization is aligned around a set of desired outcomes, the CIO guides the transformation initiatives, continuing to partner with business leaders around achievement of business objectives while leading and inspiring the IT team.

 

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Cisco is the only partner that has an integrated portfolio across the entire technology realm: network, data center, cloud, security, collaboration, IoT, analytics, and service provider. We combine this with industry partners to bring a truly robust set of capabilities that can reach every extremity of your value chain, from anywhere a service or application resides to wherever it may be consumed.

The world is changing fast. The choices you make now will decide whether you’re setting the pace in your industry or playing catch-up. There’s never been a better time to transform your business. No matter where you are in your digital transformation, Cisco can help you build a smarter, faster, and more competitive business. Cisco is your foundation for digital transformation, with a comprehensive set of products, solutions, and services for providing connectivity, security, automation, and analytics across your entire value chain.

Let Cisco help you reimagine your business and accelerate your journey toward digital transformation in your organization.

Cisco is the only partner that has an integrated portfolio across the entire technology realm: network, data center, cloud, security, collaboration, IoT, analytics, and service provider. We combine this with industry partners to bring a truly robust set of capabilities that can reach every extremity of your value chain, from anywhere a service or application resides to wherever it may be consumed.


The world is changing fast. The choices you make now will decide whether you’re setting the pace in your industry or playing catch-up. There’s never been a better time to

transform your business. No matter where you are in your digital transformation, Cisco can help you build a smarter, faster, and more competitive business. Cisco is your foundation for digital transformation, with a comprehensive set of products, solutions, and services for providing connectivity, security, automation, and analytics across your entire value chain.


Let Cisco help you reimagine your business and accelerate your journey toward digital transformation in your organization.

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