CIO Value

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If the CIO is to be valued as a strategic actor, how can he bring to the table the ethos of alignment, bound to the demands of process strategic planning to move IT to the forefront of the organization's future? Alignment refers to linkages within the business model that connect disparate parts of the organization together through information technologies. There are two aspects to consider: affordability and scale. Executing an enterprise-wide information system, generally through Enterprise Resource Planning (ERP) process, is a significant capital investment. Not all units will be mature enough to embrace ERP; the market may not have global solutions. Consequently, alignment needs to be scalable (increase investment as demand increases), and agile (ready to embrace quickly). What follows is an analysis of each of the readings available for this discussion. After these critical reviews, I will provide a snapshot and invite you to tackle the problem and the assessment of these reviews.

A. Bradley, J., J. Loucks, J. Macaulay, A. Noronha, & M. Wade. (2015, July). Disruptor and Disrupted -- Strategy in the Digital Vortex. Global Center for Digital Business Transformation. Retrieved from https://www.imd.org/dbt/whitepapers/disruptor-disrupted. Citation: (Bradley et al., 2015: p#)

1. Major theme of the essay: To survive, companies need to recognize market forces (disruptors) that threaten the corporation’s share of market value (disrupted). The ideas examine the tensions between internal and external environments. The corporation must be smart and ready to move quickly as threats emerge.

2. Arguments used to support this theme Value is created through cost, experience, and platform (delivery). Intrusions into the market here referred to as digital disruptions or the digital vortex, are “value vampires”. They succeed at the expense of others. Vampires see opportunities in the digital vortex known as value vacancies. These opportunities are short-lived and hard won. Disruptors join forces in the market to supply value. This is known as combinational disruption. It is met by digital business agility. When a threat emerges, dominant market forces exhibit digital agility: accessing information processing systems that monitor the internal and external environments. Visualized, the system is an iterative flow of data between the internal business environment (employees, operations, information system assets) and the external business environment (customers, partners, macroeconomics). Decisions are filtered by hyperawareness, informed decision making, and fast execution (Nicolay, figure 1, p. 17). Hyperawareness simply means knowing your market, emerging technologies, and shifts in consumer behavior. Hyperawareness and informed decision making demand good data and big data analysis that create actionable linkages. Informed decision making leads to poor decisions when decision makers cannot surrender their own strategic biases. Biases are defeated by listening. Fast execution demands change management strategies. If a traditional approach to business (operations) is disrupting, it needs to be changed, and quickly.

There are four competitive, defensive strategies: harvest, retreat, disrupt, and occupy. “Harvest” refers to seizing assets from declining business ventures. It can be seen as an admission of failure. “Retreat” refers to recognizing the impending and repositioning the corporation rather than to continue to shore up the inevitable. With retreat, a niche may remain with value. “Disrupt” refers to shifting market placement. It requires agility. Decision-makers know cost trends, customer needs, and the interaction between stakeholders in a digital world. A good way to see the disruption potential is through combinational disruption. A combinational disruption unites cost value (return on investment), experience value (the inside talent), and platform value (the infrastructure required to deliver). The final strategy is “occupy”: hanging onto the market status. How do we stay good at what we do without erosion? Success comes through demanding work.

3. Ideas that support the problem for the week The contrast between disrupted and disruptor provides a rationalization for the aligned information system and the strength of robust data analysis in competitive environments. It provides a rationale for the borderless corporation, that is, the dissolution of departmental silos. There are value vampires inside organizations as well.

4. Ideas that are not useful for discussion of the problem The reading focuses on competitive positions for product/services in the market. It is easy to get sidetracked. The case illustrations do suggest an underlying decision process but the emphasis is on surviving capital markets. The robust infrastructure and data analysis systems are taken as a given. None of the value capture strategies mean a thing without the IT foundation, and the ability to analyze big data without getting sucked into the digital vortex.