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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.

The company also offers clients a way to pull the data about them in the companies' systems and combine it with market data and other data that is not on State Street's systems. "They can relate their data to our data," he says. He calls it a cornerstone application for building a more digital enterprise.

One of the biggest challenges in building that enterprise is keeping up with the pace of change. He says if you had bet him three years ago that big traditional companies would be using the public cloud now, he would've taken the bet. He thought it would be five or six years before they would even start to considering doing that. "I would've lost that bet," he says.

The challenge for IT, and companies, is that the process of digitizing many things — like cars, robotic systems and wearable devices — involves more than computerizing them. "Digitization is broader than computerization," says MIT's Woerner. That makes it easier for businesses to digitize, but harder to manage.

Woerner and one of her MIT colleagues, Peter Weill, have identified three ways that digitization can be managed. One is converged management, where a single department or executive manages all digital investments. The second is coordinated management, where CIOs, CMOs and others team up on digitizing the business. Still others might create "stacks" or siloes to spur specific kinds of digital innovation. In any case, she says CIOs will play important cross-company roles, especially when it comes to ensuring good data governance.

Still, it's no wonder that the digital enterprise has CIOs like Perretta asking fundamental questions about IT. "The question I would ask is 'What's the future of a traditional IT organization?'" he says. "Remember the old typing pool? I wonder, will IT organizations go the way of the typing pool? If everyone is a technologist, what is IT?"

Not that Perretta is losing sleep over the answer.

"I've been doing this since the Carter administration," says Perretta, who is 56. "The most exciting time to be in technology is right now. We have limitless opportunities."

Digital Transformation Starts With the CEO

The digital enterprise has a paradox: It happens because of leadership from the CEO, not the CIO. That's because a company, the whole thing, transforms as it goes from just computerized to fully digital.

"The hardest thing is knowing what the right business moves are, the new business models emerging and how you should engage with your customer," says Mojgan Le­febvre, CIO of Liberty Mutual's Global Specialty business. The answers to these questions drive a company's technology choices.

CEOs do not implement the digital business. CEOs open doors for CIOs to implement it. "We are as much an information company as we are a drug company," says Diana McKenzie, CIO at Amgen. "When the CEO is demonstrating that leadership and vision, it's much easier for that to cascade down through the organization in terms of priorities."

 

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