For a snapshot of the expectations that many enterprises have for CIOs today, scan recent online job postings. For example:
“Serve as our lead technology strategist in educating senior leaders on external trends and industry developments.”
“Work closely with other C-level executives to create strategic plans for the business’ future growth.”
As enterprises look to grow and stay competitive, they often turn to digital business. “Enterprises frequently commission plans for digital business from internal strategists and external consultants,” said Jorge Lopez, vice president and distinguished analyst at Gartner. “However, most CEOs and boards of directors lack expertise in digital business and will, therefore, trust CIOs to play a major role in building and vetting these plans.”
A digital business plan can succeed only if leaders act on it.
If you were handed a digital business plan, how would you evaluate it?
Mr. Lopez recommended that CIOs ask five questions about any draft under their review.
1. Does the plan enable us to set the rules of competition?
First, evaluate if a digital business plan even fits the definition of digital business – which is “the creation of new business designs by blurring the physical and digital worlds,” said Mr. Lopez. Creating a new digital channel to sell your company’s traditional products, for example, doesn’t pass the test. Building a smartphone app to turn cars into a mobility service (as is the case with Uber) does.
2. Does it prioritize the opportunities?
The tools and mechanisms that drive digital business (such as sensors, analytics and cloud services) can open up many opportunities for your enterprise. When a digital business plan doesn’t specify top-line priorities, it’s difficult for senior executives to decide what’s important. They might choose the easiest, least expensive projects, which won’t ultimately transform the business.
3. Does it define the operational changes that will be needed?
Introducing new business models and capabilities might require changes in staffing, organizational culture, and even the way the enterprise presents itself to the world. For example, as part of its Industrial Internet vision, GE is selling sell its Appliance and Lighting units and creating a new unit to build analytics capabilities. Any plan should account for these types of necessary changes.
4. Does it assess the costs and risks?
No CEO or board of directors will agree to a plan without knowing the costs and risks. Both should be quantified. In addition to the initial investment to acquire new technologies and develop new products, the plan should consider the costs of integration and maintenance that will be necessary as technologies develop. It should also address how to protect information assets that will be more exposed to outside threats.
5. Will it move the board and the CEO to act?
A digital business plan can succeed only if leaders act on it. What you evaluate should be aspirational, focusing on the CEO’s and board’s top-level objectives. For example, an idea for a digital product that allows the enterprise to enter an adjacent market – such as Under Armour’s move into mobile fitness apps – is likely to resonate, while a sales force automation project would probably be too tactical.
Once you’ve reviewed a plan that doesn’t fulfill the above criteria, you might need to send it back with a list of questions to complete the picture for the board and CEO, or revise it yourself (or reach out to another appropriate leader), said Mr. Lopez. You might also need to reject the plan, and commission another strategist or consultant to create a new plan with more explicit instructions about what it should include.