VANCOUVER – CIOs can help CEOs deal with increased complexity in their organizations by using analytics to foster creative leadership, reinvent customer relationships and build operational dexterity, according to a research study from IBM that was presented at the 7th annual CIO Association of Canada’s Peer Forum on Thursday.
Paul Bellack, partner and national leader of the Technology Strategy Practice for IBM Global Business Services in Canada, told the audience there were major implications from its annual study of CEOs around the world. Its survey, which generates responses from approximately 1,500 chief executive officers, showed that most heads of companies value technology more highly than their own IT executives. CEOs ranked technology as second in a list of factors that have a significant impact on the business that also included market forces, marcoeconomics and people skills. CIOs put technology at No. 6.
More importantly, Bellack said that most CEOs are seeing greater complexity in companies they manage. Seventy-nine per cent told IBM they expect to see complexity increase, and of that group, 49 per cent are unprepared for the complex challenges they may face. This works out to a 30 per cent “complexity gap,” Bellack added, which CIOs may have an opportunity to fill.
The key, said Bellack, is helping senior management take risks that will disrupt legacy business models and pointing out the technologies that could up-end them. “What’s your iTunes?” he asked the audience, recalling consulting work he once did for a local Vancouver record store company that has since filed for bankruptcy. “What’s your Netflix? CIOs need to be able to see those things.”
Analytics through the successful use of business intelligence software is an essential ingredient, Bellack said, as it allows companies to make better decisions faster and to cope with ambiguity. He gave the example of Bath and Bodyworks, a mall retailer which was experiencing high foot traffic but little in the way of sales. “They put counters on the doors so they would know how many people were entering the store, and then they would track the conversions – how many people actually bought something,” he said. “They would report on the conversions every 15 minutes. You can imagine how quickly the store performance went up.”
Lots of organizations talk about getting closer to customers, but Bellack said CIOs are best positioned to make it happen. If someone goes to Canadian Tire, he pointed out, they might pick up a new tire for their car, a tire jack, some gloves from its subsidiary Mark’s Work Wearhouse and then fill up with gas before going home. That customer will be in Canadian Tire’s database half a dozen times. “It’s about bringing it all together,” Bellack said.
In a panel discussion that followed Bellack’s presentation, former BCAA CEO Bill Bullis said there should be no surprise that there were untapped possibilities for partnerships been IT executives and senior management.
“There should be no ‘CIO agenda,’” he said. “It’s like Paul said about Netflix and Blockbuster’s bankruptcy. My first thought was, ‘Where was the CIO in all of that?’”
Even as more organizations are adopting business intelligence so that CIOs can provide CEOs greater insight about their company’s performance, Bellack showed stats that indicated where the barriers are. Thirty-eight per cent said their organization lacked understanding about how analytics could help, 34 per cent said they lack the resources and 28 per cent cited skills shortages. Only 21 per cent indicated concerns about return on investment.