How CIOs can drive change
Banerji recommends legacy companies adopt an entrepreneurial mentality and muster the courage to make wholesale changes. "Corporate leaders must possess the humility and vision to see a future beyond the value of their legacy operations and identify ways to introduce innovation into their organizations, even if it means self-disruption. There are huge reserves of untapped innovation in legacy businesses just waiting for the right leadership to unlock it," Banerji wrote in a new Caldwell report.
Banerji says that CIOs would do well to take a page from the playbook of companies such as Amazon.com, whose CEO Jeff Bezos practices a Day 1 philosophy that emphasizes focusing on business outcomes over processes. The idea is to make high-velocity, high-quality decisions without getting bogged down in process while remaining laser-focused on customers.
Not every business is structured in such a way as to practice the Day 1 philosophy but plenty of traditional companies are forging their own digital playbooks. Recognizing that its software can yield competitive advantages, Goldman Sachs created an API-based platform strategy and open-sourced such strategic software as its Securities Database, which computes more than 20 billion prices per day on millions of positions the bank holds in stocks and other securities.
General Electric has created a digital business with a stated goal of becoming a $20 billion enterprise over the next few years, and it’s building "digital twins" or virtual versions of physical engines and other assets. Domino's Pizza, recognizing the way Amazon.com and other ecommerce players were steamrolling retail, created an online pizza tracker as its first step to becoming a digital business. It's also experimenting with voice recognition technology and mobile software.
CIOs are studying such moves and acting with newfound urgency. At the Forbes CIO Summit last month, many CIOs discussed ditching the slow/fast hybrid model of bimodal IT in favor of simply fast models to achieve digital velocity.
Banerji says that while the templates created by Amazon.com, GE and others can help companies achieve the organizational, operational and cultural outcomes they desire, companies must first bolster their digital skill portfolio.
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