In an ideal world, it’s always desirable for a company to be in a position where it is either the industry leader or placing rival companies on the defensive with disruptive innovation.
But, alas, we don’t live in an ideal world and because of the frenzied pace of disruption in today’s markets, many organizations often find themselves scrambling to respond to new business models and other forms of business innovation introduced by competitors.
There are numerous difficulties associated with organizations’ ability to respond to disruption. According to the KPMG Global CIO Advisory Pulse Survey 2014, the top challenges in addressing digital disruption are lack of critical skills (65%), limitations of IT systems (64%), and cultural resistance (56%).
Because CIOs sit at the intersection of technology and the business, they are extremely well-positioned to serve as trusted advisors for identifying and responding to disruptive innovation.
Still, in order for a company to respond effectively to various forms of disruption that surface within an industry, this requires agility – both in the nimbleness of the IT organization and from a budgetary perspective.
Forward-thinking CIOs are repositioning the IT organization to enable IT staff to adapt to the changing landscape and tackle disruptive threats and opportunities as they emerge. CIOs need a deep bench of talented employees who can be redirected to respond to new business challenges when they arise.
To help make this possible, savvy CIOs are outsourcing support for “run-the-business”-type activities such as network management and application maintenance while creating more engaging opportunities for FTEs for “grow-the-business” opportunities. Crafting business-focused roles helps to keep IT workers motivated while establishing a company’s IT organization as an attractive destination for would-be employees.
Of course, budget needs to be allocated to act on disruption. This includes arming the enterprise with the flexibility to disperse funding more easily as competitive threats and opportunities are presented.
One way to do this is by creating a more nimble IT/business budget fixed IT costs are gradually reduced while capital is increasingly freed up for discretionary IT/business spending. In the face of continued pressure to reduce IT spending, shrewd CIOs have been able to reduce fixed IT costs in a number of ways (e.g. consolidating data center servers, storage, and network equipment). In addition to the aforementioned IT skills outsourcing, the growing use of cloud and SaaS is enabling enterprises to lower their legacy software licensing and maintenance costs.
“Agility can mean many things to a bunch of people,” says Greggory Garrett, CEO & Managing Director at CGS Advisors LLC in an HMG video. “For me, it’s the ability to not only react quickly but also to be provocative and get around the corner before your competitors.”
- Forward-thinking CIOs are developing a deep bench of business-focused IT staff who can respond to disruption as it occurs.
- CIOs can also identify areas for sourcing “run-the-business” skills such as network management in order to focus full-time staff on “grow-the-business” opportunities.
- Recognize opportunities to reduce fixed IT costs (servers, storage, software) where savings can be redirected to discretionary IT spending, including opportunities to drive disruption.