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Top CIOs start the journey to the 'digital enterprise'

Michael Fitzgerald | Oct. 29, 2014
The buzzphrase 'digital enterprise' can be a bit mushy. What does it really mean? And how do you get there? Here are five emerging models.

Snapshot wasn't cheap, and it wasn't clear what the company would get in return for developing it. That's one of the challenges of moving to a digital enterprise, Voelker says, adding that Progressive faced similar challenges in the 1990s, when it pioneered automated underwriting. "That was an expensive thing to do," he says.

Progressive is fortunate for a variety of reasons, Voelker says. For one thing, its CEO, Glenn Renwick, once worked at AT&T Labs and has experience as a CIO. In addition, the company sells a service, not a tangible product. Even so, the digital enterprise of the present, let alone the future, presents big challenges. "IT didn't know just how happy times were when there was nothing much to worry about as long as you had Internet Explorer and a fast Internet connection," he muses.

To get to the truly digital enterprise, virtually every consumer-oriented company "needs to take all that business logic that is digital and locked up in our legacy systems, by which I mean any system more than 10 days old," and expose the APIs, Voelker says.

Moving the business's logic into an API form makes it possible to mash together applications, so that Progressive can create a mobile app that gives its customers roadside services or renter's insurance from Progressive partners, without making the customer leave its app. "It sounds straightforward, but it's not the way legacy systems are constructed," he says.

Getting the logic out of the legacy system is the way Voelker is preparing for the connected cars and smart roads of the Internet of Things. "That next frontier is out there," he says.

5. The Digital Supply Chain

Banks and factories seem worlds apart, but State Street's Perretta talks a lot about factories. He's especially focused on their just-in-time logistics, which rely on sharing information across supply chains. "As we get more sophisticated, the type of data we share with clients is not unlike how manufacturers share logistics data with their customers," Perretta says. "I'm better if I can see your supply chain. And if you're my partner we can benefit from that."

State Street's push to the digital enterprise includes piloting an application that lets employees see across its data infrastructure to follow a transaction from origination to completion. It's an infrastructure meant to let State Street personnel answer client questions about accounts at any point during the day, from wherever they are.

Perretta compares the way State Street's systems track transactions to the way General Electric monitors its aircraft engines, "It's like instrumentation," he says. "We track every transaction, every person and process who touches the transaction as we process it around the world."


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