Data Giants: Plans to make the Physical World an extension of the Digital World. [shutterstock: 304381934, ra2studio]
Every organisation needs a digital platform strategy, according to Gartner. It will take bold, modern leadership by CIOs to develop business ecosystems to improve their organisations and tackle some of the world's biggest challenges.
During Gartner Symposium/ITxpo, which is taking place here until Thursday, Gartner analysts are discussing how CIOs can use the capabilities of new digital platforms to deliver results, and explaining how they define the CIO’s new leadership role.
“CIOs must realise that old organisational strategies will inhibit digital transformation,” said Don Scheibenreif, vice president and distinguished analyst at Gartner.
He said the future organisational structure is cross-functional and bimodal. The term “bimodal” refers to the practice of managing two separate but coherent styles of work: one focused on predictability, the other on exploration.
“Get rid of all habits that would inhibit your bimodal leadership,” added Scheibenreif. “Turn bimodal IT into a continuous process, not for just a single set of projects, but as an ongoing discipline.”
Scheibenreif told the audience of nearly 6,000 CIOs and IT leaders to pledge themselves to develop their “beginner’s mind”, and rely less on outdated best practices. “True leaders also create team diversity and establish cognitive diversity in their team,” he added. “Cognitive diversity in a team pushes new thinking and creates breakthrough results that are a critical part of a business leader’s strategy.”
Gartner analysts used the example of a train operator questioning established best practices and reinventing a core process. The traditional perspective of the management team was that becoming really good at maintenance kept costs down and train availability high. However, the “beginner’s mind” of the train operator questioned why maintenance had to be scheduled. With a fresh perspective, it was then decided to “listen to the train” using Internet of Things technology, and to provide maintenance only when needed.
Digital platforms enable companies to pursue business models that bring together multiple buyers and sellers. The digital platform business model is used by the world’s most valuable companies. “Business ecosystems aren’t just for digital-only or mega-companies,” said Mark Raskino, vice president and Gartner Fellow. “Every company will compete as part of a business ecosystem.”
For example, in the agricultural sector tractor companies will build ecosystems to bring together partners of all sizes to provide connected services. When these ecosystems collaborate the result will be greater market access for ecosystem partners, higher crop yields and sales for farmers, and new streams of revenue and increased customer loyalty for agricultural organisations.
“Organisations are digitalising all the things we use — appliances, automobiles, hospitals, payment methods and so on,” Mr Raskino said. “The digital giants, such as Apple, Google and Tencent, will take the ecosystem business models they have developed in areas such as e-commerce, music, apps and search, and extend their tentacles into the connected world we have collectively created. They plan on making the physical world an extension of the digital — on making it a world they control.”
As products and services become more digital, more physical things are connecting to technology platforms that are controlled by, and viewed from, software. When this happens, the digital giants step in between many companies’ products and services and their customers.
This represents a difficult situation for many companies. They will have to decide either to work with the digital giants or fight them. Most consumer companies will choose to work with them. But Gartner predicts that industrial companies will create their own ecosystems centred on heavy industries such as manufacturing, construction and mining. “A battle between ecosystems is inevitable,” Mr Raskino concluded.