Social Business as Hospitality: Customers Relationships are the only Competitive Advantage

Posted on December 30, 2012. Filed under: Uncategorized |

Recently a number of activities have in one way or another highlighted this point:  the only real sustainable advantage we can have is based in the relationships we have with our customers.  This may be obvious to many, but it was an ‘ah ha’ moment for me, bringing together a number of concepts that I’ve been thinking about.  This blog is intended to pull together some of these ideas and explore where it leads.OLYMPUS DIGITAL CAMERA

First is the thought that customer relationships are a basis for competitive advantage.  I recall from my marketing and sales days that getting a new customer is much more difficult and expensive than keeping an existing customer.  No where is that more true than in a turbulent, high velocity ecosystem like we find today in just about every industry.  Keeping a customer is critical, and that means finding ways to constantly add value to the relationship we have with our customers.   Keeping customers must be a core competency of a business today, whether the enterprise is a B to B or B to C.  We can even extend this idea to non-profits and governments…keeping the equivalent of customers, donors and ‘the public’ engaged, connected and supporting the entity must be a core competency.

I heard a similar idea from Jim Stikeleather,  Chief Innovation Officer at Dell, who, in a recent presentation he gave to the Society of Information Management, said something like

“The only competitive advantage is the relationship you have with your customer and you should be willing to be whatever they need you to be to meet their needs.  That means you need to be able to reconfigure almost instantly so you can provide the products and services necessary to maintain that relationship.”

Keeping customers is not a new concept.  Marketing is built on finding ways to get and keep customers.  But thinking about customer relationships as competitive advantage, and perhaps the only competitive advantage, puts new emphasis on the activities necessary to preserve these relationships.

But what is new is the way companies can preserve these relationships today—they must re-configure themselves so they continually add value to the relationship.  A friend and colleague of mine, Dr. Nick Vitalari, has recently published a new book entitled ‘The Elastic Enterprise, in which he describes a new business model that wildly successful companies like Amazon.com, Ebay,  Facebook and more have used to get to the top of their field and stay there for so long.  They are elastic.  They can give and take as necessary to provide whatever their customers want.  They do that with a business platform that allows them to grow and contract as necessary and with an ecosystem of partners who provide expertise, innovation, and, well, partnership, to bring to the customer whatever they like.    Being an elastic enterprise is exactly what every company needs to be to continuously provide added value to existing customers.  It’s the way to evolve, grow, innovate and delight customers instantly.

But in between delighting customers with new products and services is the relationship-building activities necessary to know the customer and to know what to provide the customer.   It’s more than just knowing the demographics of the customer base.  It’s about connecting one-on-one with customers throughout the business cycle, throughout the value chain.  In short, it’s about what I believe is at the core of social business.

Social business to me is the infusion of social capabilities into business processes.  It’s about finding ways to engage, collaborate and innovate within the business processes of the enterprise. This is a new concept.  This is a new way to think about social, about business activities, and about how the very core of business is done.  We know about sales and marketing efforts and about using social capabilities for increased sales.  This is about building relationships at every opportunity of the business…operational processes, HR processes, innovation processes, financial and accounting processes, and more…just about every process in the business can be made more effective and be a point for relationship building and value add by infusing it with social capabilities.

Today we have tools that didn’t exist before: social media, social networks, social innovation platforms, blogs, micro-blogs/tweets, video-sharing, instant-photo-sharing, and so much more.  These social technologies (I like to call it “social IT”) provide a new, and increasingly critical way to collaborate, engage and innovate with customers (see my earlier blog about this).  Increasingly, social IT and the platforms they create are the primary way and, dare I say, the only way in some cases, to connect with customers.

Another friend, Marnina, a professional chef and hospitality industry guru, said something that crystallized the idea of building customer relationships and how that’s different from what most enterprises do with social media.  She described the difference in providing hospitality versus service.  Marnina said,

“Hospitality means treating customers like guests, where you get to know them and they get to know you.  It’s about a deep relationship.  Customer service is different than guest services.  Customer service is a helpdesk that answers questions.  It’s transactional.  Guest services is hospitality.”

We seek to provide something similar to hospitality where our customers feel special, and where they feel we care about them, and what their needs are.  So back to the original thesis of this blog: If customer relationship are the only source of lasting competitive advantage, then our enterprises must become competent in hospitality, in maintaining and growing those relationships.   Therefore we must invest in building social businesses and develop the competencies that enable us to have deep customer relationships.  That’s so very different than using social IT to sell and to market.  It’s more than just a transaction.  It’s at the heart of what I think will drive every enterprise to become a social business.

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Instant Learning as a Competitive Advantage

Posted on October 30, 2012. Filed under: Uncategorized |

My friend, Luis Suarez, tweeted the following from the Knowledge Management World conference in Washington DC:

To see where he got this idea, I tracked back his tweet to the keynote session at KMWorld; titled, “KM Saves Lives”, a panel discussion led by Patrick Lambe, an author and KM specialist from Singapore, and including Gary Klein, senior scientist at MacroCognition, Nate Allen, entrepreneur within the US Army and part o the National Defense University iCollege, and Nancy Dixon, principal researcher at Common Knowledge Associates.

Apparently in this session, this distinguished panel discussed the concept that KM is no longer just a back room support function, but, through illustrations in military, health care and emergency response, that KM practices can have impact on people’s lives, and have implications for organizational effectiveness in a broader context.  But it was the tweet that got my imagination going.

I’ve always believed that learning can be a distinguishing advantage for individuals and a competitive advantage for organizations.  At the individual level, being able and willing to learn new things enable us to grow and adapt.  Certainly every graduate student knows that the extra time they spend working on their advanced degree gives them an advantage over their lesser-degreed peers.  And today, social IT enable us to quickly find and collaborate with others outside of our normal social groups.  Those who master this capability find that they are continually learning, better able to bring more innovations to their daily work, and more adaptable to the changes that life presents to them.

But Luis’ tweet also suggests that rapid learning gives organizations a competitive advantage—something I’ve written about before.  The idea of instant learning is a core from my book on the Zero Time Organization, published more than 10 years ago (see my blog).  Organizations who develop a competency in learning instantly also develop a capability that allows them to reconfigure themselves as necessary to respond to the changes in their environment.  Instant learning is achieved with the right platform—technology and processes—that enable individuals in the organization to find the right information at the right time.  Our research back in the 1990s highlighted the way Dell Computers brought assembly information right to the station on the production line at the moment it was needed by the worker.  This enabled the workers to learn ‘instantly’ how to build the system, and gave Dell a way to have multiple products manufactured on the same production line- clearly a component of their competitive advantage.

In my world, IT have once again changed the way organizations learn.  Certainly data warehouses and the associated analytical processes that allow organizations to ‘learn’ from the information they collect provide a basis for rapid learning and increased effectiveness.   Tom Davenport and others have documented many examples of organizations who now compete based on their analytical maturity.

Social IT also enables organizations to learn more rapidly.  An internal social network, like that created by Jive connects individuals together to collaborate and learn from each other more quickly.  An activity stream, like that created by Salesforce.com’s Chatter facilitates serendipitous connections that are fundamental to thinking outside the box and making links between work activities that can benefit from learning from each others.  An innovation platform like Dell’s IdeaStorm or Starbuck’s MyStarbucksIdea.comgive their organizations a way to quickly learn about potential innovative ideas and the popularity of those ideas.

Can your company learn instantly?  What would it take to create instant learning within your enterprise? What is your organization’s learning plan?  Does it include social technologies? Companies without a robust social business strategy lose the opportunity to rapidly learn.  And as Luis’s Tweet suggests, that may also slow down success and effectiveness.

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The Transformative Innovation-Operational Excellence Dilemma

Posted on September 27, 2012. Filed under: Uncategorized |

Can an organization successfully pursue both transformative innovation and operational excellence at the same time?  A recent blog by Maxwell Wessel, a member of the Harvard Business School think tank, Forum for Growth and Innovation, suggests not.  The blog, Why Big Companies Can’t Innovate, is the first of a series of findings from research to develop and refine theories around disruptive innovation.

In his blog, Wessel suggests “Big companies are really bad at innovation because they’re designed to be bad at innovation.”  He then tells the story of baby food company Gerber’s failed innovation of “Gerber Singles,” a product for adults, as a means of illustrating the point.  He writes,

For those who would admonish Gerber for their approach to transformational innovation, it might be wise to consider that the company did exactly what it was designed to do: create operational efficiency. This deeply-rooted tendency goes all the way back to a corporation’s typical life cycle. In it’s infancy, it’s designed to bring innovation to the market. A start-up’s success is not gauged by earnings or quarterly reports; it’s measured by how well it identifies a problem in the market and matches it to a solution….But that’s not what life is like within a mature organization. When corporations reach maturity, the measure of success is very different: it’s profit.

For executives who want to secure growth through innovation, the answer lies in recognizing the limits of their organization and empowering groups to function with very different goals and operational metrics

Wessel’s blog suggests a paradox of the impossibility of having operational excellence and transformational innovation at the same time.  Mature organizations designed for operational excellence do not have the right environmental factors to cultivate a culture of innovation.

How does your organization manage this dilemma?  Can you dial up innovation processes and operational excellence at the same time?  Can you reconcile the pursuit of different goals, profit and successful innovation, at the same time?

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A New Generation of Connected Customers and Employees

Posted on June 29, 2012. Filed under: Uncategorized |

The connected generation has different expectations than the rest of us.  They expect their customer experience to be delivered in person, and on every device they use to access our companies.  When we don’t provide the expected services, they notice and they tell their network.  Likewise, when we provide outstanding services, their community hears about that, too.  And they hear about it instantly.

Brian Solis, author of The End of Business as Usual and principal analyst at Altimeter Group, wrote about this.  In a recent article appearing in the Washington Post, Corporations Meet Generation C,  Brian noted

You’re at a concert and you notice nearly everyone in the audience is either looking down at their phone or holding it up in the air. A question slowly dawns on you: “What’s the point?”… While these people may seem distracted, they are, in fact, very much a part of the occasion. Multitasking is a way of life for them, but there’s something more to it than just a love affair with smartphones and tablets. These “always on” audiences share real-world experiences as they happen with friends and acquaintances who, in turn, respond in real time.

This increasingly empowered generation of connected customers, which I often refer to as Generation-C (C is for customer), is changing the face of engagement and is re-writing the book for how businesses market and serve them in the future….Today, customers realize that social networks give them influence over how other consumers view a company and they are learning how to influence companies to listen, respond and resolve problems directly. At the center of this evolving customer landscape are shared experiences….Suddenly, the audience with an audience becomes a formidable foe or ally for any organization. As such, the proactive investment in positive experiences now represents a modern and potentially influential form of consumer marketing and service.

Brian has nicely highlighted the reasons executives cannot afford to ignore connected customers.  Managing the customer experience must include plans for reaching and servicing the connected customer.  As this group grows, and their expectations for instant customer experience on smart phones, tablets, and other devices that access global networks grows, plans must be put in place for meeting these expectations.

But it also begs the question about how this will impact internal audiences.  The connected generation are connected to employees and suppliers-in fact they may also be our suppliers and employees.  While executives have never spent the resources on the employee experience that they spend on the customer experience, this new generation further blurs the lines.   Building a plan for the customer experience of the connected customer can no longer be done in isolation.

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’12: A Year of Innovation

Posted on April 30, 2012. Filed under: Uncategorized |

It’s a year of innovation.  Home runs.  Big wins.  New ideas that produce serious success.  Think I mean 2012?  Let’s hope this year is as memorable in the history books of innovation as 1912.   I noticed that 2012 seems to be the centennial anniversary of some of my favorite brands, so I did a bit of research (and my husband did some too…thanks Yale) only to find that 1912 was a big year for innovation.

Here’s just a partial list of companies, states, brands, and products celebrating their 100 year anniversary this year.  All are the results of innovative thinking in 1912.

In January 1912, New Mexico achieved statehood and close behind, on February 14, 2012,  The State of Arizona .  No new states had joined the Union since 1907, when Oklahoma became a state in 1907.  After Arizona, it wasn’t until 1959 that Alaska became a state.

Oreos were first baked in March 2012 at the Chelsea Market bakery in Manhattan.  Speaking of cookies, Girl Scouts were founded in March 1912.  March was also the anniversary of the cherry trees in Washington DC.  The Mayor of Tokyo City gave a gift of 3000 trees to grow the friendship between Japan and the U.S.

Alolph Zukor, owner of a New York nickelodeon, got the American distribution rights for the movie Queen Elizabeth staring Sarah Bernhardt, and opened on July 12, 1912 as the first full-length drama and that catalyzed Zukor to start the Famous Players Film Company, which produced several classics the following year (The Count of Monte Cristo is one of them).  He later merged with a film distributor, Paramount Pictures.

Fenway Park, the oldest major league ball park still in use, and home to the Boston Red Sox, celebrated it’s 100 birthday in April 2012.

Chevrolet made their first car, the ‘classic six’ named after race car driver Louis Chevrolet.

LL Bean Leon Leonwood Bean created a direct marketing mailer for his new hunting shoe in 1912, creating an innovative way to sell.

The President of the Associated Advertising Clubs of America, George Coleman, decided to form a National Vigilance committee in 1912 to focus on regional and national advertising after seeing the success of a number of local clubs started earlier in the year, and founded an innovative way to help customers trust the businesses claims, The Better Business Bureau.

Another innovative sweet, Lifesavers, was created in 1912. Chocolate maker Clarence Crain was looking for a candy that would not melt in the hot summer sun.  He came up with the idea of making a mint hard candy, and to differentiate his mints from others, so he punched a hole in the middle, and the result was a ‘mini life preserver’ which he called Life Savers.

An innovation in American Football change the game forever: the forward pass.  The rules up until 1912 said that a forward pass could only be thrown 5 yards behind the line of scrimmage and go no further than 20 yards.   But in 1912, the rules were changed; the ball could be thrown from anywhere behind the line of scrimmage to as far forward as they wanted…and the Hail Mary pass was born.

Innovations in 1912 changed the way rash was collected.  The garbage truck was invented.

Cellophane (clear plastic) was patented and first commercially produced in 1912 by Swiss chemist Dr. Jacques Brandenberger, DuPont later acquired the patent rights.

To be fair, 1910 seems to be a decade of innovation.  1911 was the year IBM was founded,  Norwegians were the first to reach the South Pole that year too.

A hundred years from now, in 2112, will leaders look back to 2012 with the same awe and respect that we have for leaders in 1912?  Let’s hope so.  What will it take for 2012 to be our  year of great innovation?  What are you doing in your company to make it so?

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The Genie is Out of the Bottle

Posted on March 30, 2012. Filed under: Uncategorized |

This month’s blog comes from a recent post by JP Rangaswami, currently Chief Scientist at Salesforce.com, but formerly Chief Scientist at British Telecom and before that Global CIO at Dresdner Kleinwort Wasserstein. He is a Fellow of both the Royal Society of Arts and the British Computer Society. His blog, Confused of Calcutta, is an interesting compilation of the thoughts of this brilliant colleague.

His recent blog, Why It’s Over suggested that “it’s over, the waves won’t be turned back, the genie won’t go back into the bottle, the changes we’ve seen over the past three or four decades are here to stay, the trends will sustain.” His reasons (which are fleshed out in his blogpost) are:

1. Soon everyone on the earth will be connected to the Internet
2. People choose how they connect to the Internet
3. People choose how they will engage with the “content”
4. People choose where they engage from (even if it’s not where they really are)
5. It’s getting harder to pass bad law
6. It’s getting harder to stop people from connecting and congregating
7. The possibilities are infinite
8. New paradigms, new problems, new solutions
9. People still make shoes, not money
10. It’s over if we want it to be

He then references Alan Kay .

Alan Kay once said, probably around 1968, “The best way to predict the future is to invent it”. When I met him some years ago, he’d changed his mind: he amended his words to “The best way to predict the future is to prevent it”. The West has been in the business of preventing the future for a long time now. They’ve gotten pretty sophisticated at it. The East runs the risk of following in the West’s footsteps… Which leaves the stage open for Africa. A land of incredible need, incredible possibilities. A land that may show the rest of us what the internet is really about. Because they want it. Maybe they want it more than anyone else.

I’m struck by the similarity to a message I heard at SXSW, by Matt Barrie, CEO of Freelancer.com.  In his talk, he shared a similar vision.

The Internet is delivering its next tectonic shift upon society – disruption of the global labor markets. There are 7 billion people in the world, but only 2 billion people on the Internet. The other 5 billion are connecting now, at double and triple digit rates. Remarkably, they live today on around $8 a day or less. The first thing they are looking to do when they connect is raise their standard of living- by finding a job online. This is the vanguard of an economic revolution that is sweeping emerging economies and the developing world.

JP’s blog puts forth a powerful vision for the future, and a challenge for those of us in the West.  Along with Matt’s point of view, it raises an important question.  Are we ‘preventing the future’?  As a society, we in “the west” (and maybe even those in “the east”)  have clearly reached some type of inflection point in our use of the internet.  And the rest of the world is just catching up now.  Executives who see this vision will have the jump on the rest who are busy blocking the future so we can keep control over it. Are you an enabler or a block?  Which do you want to be?

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Expectations for a Speedy Website

Posted on February 29, 2012. Filed under: Uncategorized |

A recent article in the New York Times raised an issue that has been on my mind for a while:  How fast is fast enough for website response times?

The research cited in this article supports the need for speed and the impact website performance has on user perception and behavior.  Users expect sites to respond instantly or they click away from them.  And the expectations seem to be increasing–they want faster response times.

The article, written by NYT Technology Journalist Steve Lohr, reports that users of websites have become incredibly impatient and expect web pages, whether on a mobile phone, tablet or laptop, to respond instantly.

How instant does your website need to be?  According to this article, web page typically takes on average 9 seconds to load on a mobile phone, and 6 seconds on an average personal computer (the US seems to be a bit faster, at 3.5 seconds, on average). A Forrester Research study in 2009 found that online shoppers expected pages to load in 2 seconds, and many left if it took more than 3 seconds. According to this article, 250 milliseconds is the magic number now for competitive advantage on the web.  If a site is much slower, users will navigate away.  The research found that 4 out of 5 users will click away from a video site if the video stalls while loading.

Expectations are continually rising, forcing companies to rethink their online presence and speed up the response times of their sites.  The research found that a response time of 4 seconds used to be enough, but more recently users click away if the response time is more than 2 seconds.  Some suggest the 2 second rule is not even adequate any longer.

Successful speedy companies have policies and practices that focus on, and reward, speed.  For example, Google, famous for it’s speedy searches of the Internet, has organizational components to insure fast response times.  Google has a “Make the Web Faster” program, a companywide speed budget, and a policy that new products must not slow down Google services.

How important is speed to your customers and what do you do to meet those expectations?  And what is the tradeoff for your business–what do you have to sacrifice in order to speed up your website’s response time?  It’s something to think about if the consequence is the loss of customers whose impatience keeps them from doing business on your site.

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The New Normal: Social Business

Posted on January 31, 2012. Filed under: Uncategorized |

Recently, I ran across a very interesting blog of 101 examples of investments in social business…using social tools to collaborate, engage, innovate and run your business differently.  We’ve addressed the IT leaders’s role in leading social business.  But the blog I found this week was really eye opening and thought provoking.

Peter Kim, one of the early thought leaders in the use of social tools to create a social business, is the Chief Strategy Officer for the Dachis Group.  His blog lists 101 examples of benefits different companies have achieved using social tools.

What intrigued me about this blog is the breath of companies who have experimented with social tools.  Not all of them are BtoC.  Not all of the examples are brand extension.  Not all of the examples involve direct sales revenue.  Some are about transforming the business. Others are about innovation.  Others still are about building deeper relationships with customers and community.  All have documented quantifiable business benefits.

If you have any doubt about the new normal, the new way business is being done using the lens of social business, this blog might convince you.  If you need further convincing, check out Brian Solis’s blog from last October.  Social business is more than using social tools for marketing.  It’s really a whole different way of doing business—a ‘new normal’ way to engage every person who interacts with your organization—to engage your extended community.

Has your executive team embraced the concept of social business?  What would be a stretch-goal for your company to achieve that might be attempted with a well-designed social business experiment?  Maybe it’s time to do that experiment.

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Social Business for a B2B

Posted on December 28, 2011. Filed under: Uncategorized |

Most think of the social as a consumer space play in part because social media applications dominate.  For companies with a large consumer base, brand management, relationship development, engagement and marketing all benefit from investments in social IT. But what about in the B2B space?  Certainly the value proposition is not the same—there are a limited number of customers, the business model is much more focused and there isn’t any need for the kind of brand extension we see in social media today.   How should executives in companies without direct ties to consumers think about social business?

Investments in social IT can be just as beneficial, or even more beneficial, to a B2B.  Social business is not just for engaging customers to sell more products or services (although clearly this is a big opportunity for many companies).  Social business is about using new tools and platforms (which we call social IT) to support collaboration, engagement and innovation.  We wrote about these ‘big 3’ in an earlier blog.

So how does this play out in a B2B?  A B2B has customers and those companies are still businesses made up of people.  And we’ve seen even the most technical people engage in communities.  That means there is opportunity for value from investing in a social business strategy.

Leading edge B2Bs can take advantage of social IT and begin to create a social business in several ways.

Internal collaboration: Building a robust platform for connecting individuals within the company.  We’ve been chasing the knowledge management holy grail forever.  Using a social network within a company provides a way for employees to both find experts, share documents and collaborate on projects.  But the added features present in social IT allows individuals to create and organize their own space in a manner that better aligns with their way of working.

External collaboration: Social platforms provide that needed link between employees and customers.  Technical support for customers is one example.  The B2B builds the platform for collaboration where customers and employees both share experiences, answer questions and engage in dialogue that supports the entire community.  We’ve seen examples on Twitter, where customer support monitors and responds to tweets from customers, and customers support each other over the same space.  We’ve seen examples in LinkedIn and Facebook, and in private communities created just for the B2B and their customer base.  We’ve seen branded communities that grew out of listservs where those with technical expertise respond to and collaborate with other customers just because they are members of the community.

Innovation process: B2Bs use social IT platforms to solicit and prioritize innovations, features and next generation products. Innovation platforms give all members of the community an opportunity to suggest enhancements to existing products and comment on enhancements suggested by others.  Members of the community can ‘vote’ on innovations they like.  Innovation platforms prioritize the ideas giving managers valuable information to incorporate into the decision-making process on which features to incorporate into the product and contribute to the community with information on how they will proceed.

Customer Engagement: This is where social really shines for B2Bs, but in an unexpected way.  Community members of the B2B are invested in the products/services offered by their suppliers.   Often they have become specialists in the use of their suppliers products/services, and the community is a unique way to share and be recognized for that expertise.  Further, we have seen engagement in the B2B community contribute directly to recommendations, repeat purchases, and new purchases because the more active someone is in the community, the more satisfied and loyal they are.

Leaders in B2B companies can find significant value in social IT investments.  Like all information systems investments, leaders must insure alignment with business objectives, compatibility with existing enterprise systems, and a clear strategy that insures value is obtained.  It’s still early days for social IT, but it’s not the bleeding edge any longer.  B2B leaders must join the social revolution and reach out to their communities on social platforms.  Their competitors are already exploring the possibilities.

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CIO’s Role: Necessary or Superfluous?

Posted on November 30, 2011. Filed under: Uncategorized |

Recently a very insightful blog by Marc J. Shiller, with a provocative title, “The Role of the CIO: Why You Deserve to be Demoted,” crossed my desk.  It’s about all the rhetoric around the CIO role.  He’s noticed that lately there seems to be more focus than ever on the future of the CIO role.  “If you look at the volume of material being written about and discussed on the role of the CIO, it seems that CIOs are obsessed with this issue. That’s especially clear if you do a similar search on “the role of the CFO,” or even “the role of the CEO.”  he observes.  His blog then outlines the three reasons for demoting the CIO:

  1. “Today’s business managers are tech-savvy. They have grown up with technology, they understand it and they want to make their own technology decisions. They do not need a CIO slowing things down and making it more complicated. And don’t bother offering yourself as a “consultant” to the business. If they want a consultant, they will hire one with the specific expertise they need. After all, such consultants are a dime a dozen.
  2. “IT is ubiquitous and no longer offers a strategic advantage. It has become a commodity that can be purchased on-demand and in the cloud. (Notice your own words being turned on you.
  3. “What can’t be bought in the cloud can be bought from an outsourced vendor. From desktop support to payroll processing and on to nearly every business process, there are plenty of competent outsourcers out there to get the job done.”

His solution is a return to focus on the roots of the CIO, a focus on information, which helps counter these three reasons, since information is the real asset that is managed by the CIO.

This blog is particularly insightful and worth reading, if you haven’t found it yet you can find it here.  But it misses one really important aspect of the CIOs role and the role of information systems in our organizations.  Information management does not exist in a vacuum.  It’s part of the overall business toolkit just like financial management, people management, process management, and operations management.  We cannot look at IT assets, whether data, information, systems, hardware, or the IT staff themselves, outside of the context of the business organization. All of these components must be in alignment with the corporate strategy.  When taken out of context, and manipulated without thought of the consequences of the impact on the other components, it’s a recipe for disaster.

At the same time, IT assets represent significant investment for any organization.  To manage IT assets as silos, without regard to the interaction between them is also a bad idea.  How many networks does an organization need?  How many relationships with the cloud provider does an organization need?  Who manages the corporate level issues that balance out the cost savings gained by centralization versus the local control offered by decentralization? An overall IT strategy must be put in place to insure that corporate interests are addressed.  Local decisions on technology, applications, and outsourcing may be the best solution for the organization but the economies gained by corporate solutions must be considered before letting “1000 flowers bloom”.  Without someone charged with overall responsibility for the information systems strategy, a corporation is essentially moving ahead without a rudder to guide the ship.

So where does that leave the CIO?  What is the CIO’s role today?  All of the ‘reasons’ suggested by Mr. Shiller are, in fact, true.  Decisions can be made locally by more IT knowledgable managers than ever before.  Purchasing resources in the cloud or from outsourcers can provide local solutions, perhaps far superior to what the internal staff can provide. But to examine them out of context of the organization without an overall plan is similar to suggesting that no overall financial planning is necessary or that no overall people management is necessary.  It’s folly.

The CIO’s role is to create, communicate, and execute the information strategy of the enterprise, making sure it’s aligned with the corporate strategy, and in balance with the plan for people, finances, and operations.  That might mean being an information advisor rather than an information provider.   It might mean a completely different skill set than CIOs of even 5 years ago needed.    But no one else in the organization follows the management of information end-to-end.  And no one else make sure that information decisions at the local level are also in the best interest of the overall organization.  The CIO does that.

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