Digital is disrupting the world around us, keeping many of us CIOs on our toes.
Case in point: Digital transformation is building a new global economy. Just over the last decade, McKinsey Global Institute has seen global trade in digital services double, raising the world GDP by at least 10%. Today, digital represents half of total global services exports.
All this growth translates into incredible opportunity for us as CIOs. And, instead of just reacting to these changes, we need to proactively transform our organizations ahead of the digital transformation curve. The danger of not leaping ahead? Your business could end up like the more than half of the Fortune 500 companies that have disappeared since 2000 because of digital.
In this first article of my CIO Point of View (POV) blog series, I am going to explore the challenges facing enterprise CIOs and propose strategies that, hopefully, will benefit you in your own digital transformation journey.
Some of the growth and scaling challenges that digital presents to CIOs
In order to respond to growth and scale challenges in the new digital world, I see four areas where CIOs need to channel their focus and priorities.
1. We must protect our enterprise and our services against an ever-increasing cyberattack landscape.
Cyberattacks are only growing in frequency, volume and complexity. According to Gartner, in just two years, 60% of digital businesses will suffer major service failures due to the inability of IT security teams to manage digital risk. At Equinix, reinforcing our cybersecurity is a corporate-wide effort, across every organization. We recently introduced Equinix SmartKey™ to give enterprises a global SaaS-based, secure key management and cryptography service, offered on cloud-neutral Platform Equinix™, to simplify data protection across any cloud architecture.
2. We need to enable business agility harnessing the power of artificial intelligence and analytics.
As CIOs, we must empower our employees to optimize their performance. This means launching new modes of IT and business processes. For example, IDC predicts that within just the next year, 40% of digital transformation initiatives will use artificial intelligence (AI) services, and by 2021, 75% of commercial enterprise applications will use AI. This is why we’re increasing our company’s digital capabilities by introducing AI, machine learning (ML), robotics process automation (RPA), chatbots and other innovative technologies. In addition, one of my top priorities as CIO is leveraging business intelligence and analytics. At Equinix, we are shifting our mindset from treating intelligence as reports for “after-the-fact” to embedding that intelligence in the business process itself. In fact, in a recent Wall Street Journal article, I discuss how we are using AI to create analytical models that will help us better address a common business problem êŸ· increasing customer satisfaction and retention.
3. We need to leverage the power of hybrid cloud architectures, standardization and automation to support continuously growing and scaling business requirements.
Like many digital businesses, we’ve adopted a cloud-first platform philosophy because it provides a more agile and secure way of launching and scaling IT capabilities. Increasingly, we’re creating efficient and cost-effective hybrid-multicloud architectures, built on an interconnection-oriented approach that integrates both private on-premise and multiple cloud platforms – because not one cloud fits all. We find when creating hybrid/multicloud architectures, you need to evaluate and choose the best cloud capabilities for your application or IT use case. And, first and foremost, we keep the end-user experience in mind by providing our people access to scalable cloud-based services to increase their efficiency and productivity, wherever they are and whenever they need to be there. At the same time, we’re enabling global consistency, standardization and automation (e.g., deploying RPA for scale) across our business processes and platforms to drive greater efficiencies and save on costs.
4. We need to deliver a superior experience to our employees and customers.
According to Gartner, nearly three-fourths of consumers say they stop doing business with a company because of a bad experience. That’s huge, especially given that the expense of attracting new customers is 6X to 7X more than keeping existing customers. As CIOs, we play a key role in enabling an extraordinary experience for our customers, helping them connect with our people and services in simple, seamless ways. That includes helping our employees serve customers better. At Equinix, we put the customer at the center of everything we do, starting with how we are transforming our IT organization for digital. In partnership with our Chief Customer Officer, Laura Ortman, my organization is working on our customer experience improvement journey, which includes deploying new global customer collaboration and listening capabilities to create greater value through a customer-driven experience. Ultimately, we want to integrate the customer journey lifecycle into each touchpoint of our customer-facing processes and systems.
The importance of culture in driving digital transformation
In the face of these challenges, the culture that you create in your organization also plays a very critical role. I’d like to begin this blog series by proposing some strategies for how to create a mindset and culture that will help you achieve your company’s digital transformation objectives.
Today’s CIOs are expected to innovate continuously to solve business problems. This is a new strategic role where CIOs must think and work in innovative ways to help their company’s employees perform at their very best and consistently contribute to the growth of the organization. And our new responsibilities as CIOs range from introducing deployments that fuel productivity to driving improvement initiatives across every business function in the company.
In addition, we need to create a data driven culture. Data is the new currency of the digital economy. As CIOs, we must figure out ways to harness the power of our data for the good of the enterprise. Disruptive companies like Amazon, Uber and Airbnb thrive on using data to determine what customers want to buy and what buying experience they expect. We need to use our data to drive insights that can help differentiate ourselves and our products and services-and in many cases, help create and implement entirely new revenue models.
Last, but vitally important, we need to create a design thinking culture of rapid prototyping and “failing fast.” Being willing to innovate and test new products and services is the secret to digital transformation. We test out new digital technologies quickly, and if a proof of concept (POC) doesn’t give us the results we need, then we learn from that experience and move on to the next technology POC.
How we’re implementing these strategies at Equinix
We’ve adopted these strategies within our global IT organization, and the following are examples of how we’ve deployed them within Equinix.
A large part of our role at Equinix is to introduce technology leadership by testing and implementing digital capabilities into traditional business processes for better outcomes. This is where we increase our company’s digital capabilities by introducing innovative technologies such as AI and machine learning, robotics process automation (RPA), chatbots and other technologies. My global IT organization continuously evaluates leading-edge technology and proactively implements innovation to solve business problems.
To harness the value of our data to identify revenue opportunities and increase our value to our customers, we manage a Data Science Lab that enables us to analyze our most complex problems for better strategic business decisions. In partnership with our marketing organization, we’re working on a use case that focuses on building prediction models to forecast customer buying propensity and improve customer lifetime value. This improves the accuracy of our bookings forecasting, maximizes our yield, uncovers new revenue opportunities and enhances customer lifetime value.
Equinix Global IT is “Customer Zero” in the initial feedback loop to product teams for all products and services. My objective is to pilot our emerging concepts internally and provide feedback to our product organizations before we put them in front of our customers. Our Equinix-on-Equinix program is where we use our own technology inside Equinix to showcase the value of implementing our and third-party digital solutions within Equinix. Ultimately, this demonstrates their value to our customers.
The rise of the new digital CIO
The main takeaway for CIOs is that digital transformation and the opportunities it creates are transforming our role … for the better. For all of us, no matter the industry or where you are in your digital transformation journey, your position as CIO has a whole new meaning in this digital world. And if you haven’t felt the impact of that yet, don’t worry, you will.
The statistics bear this out: According to Gartner, CIOs surveyed in 2017 reported that their responsibilities are shifting, with nearly 40% being tasked with digital transformation and 34% of CIOs driving innovation in their enterprises. Taking on additional responsibilities like these is a crucial step in establishing a digital leadership role in the C-suite.
What does this mean for today’s CIO? It means you should start changing the way you think and the way you and your organization work to create greater value for your company. You must embrace the role of “Digital CIO” to enable your company to survive and succeed in a fast-changing digital world. This could mean taking on anything from holding a seat at C-level executive meetings, to identifying greater revenue opportunities, to increasing customer value, to driving IT scale and optimization-and so much more.
As Equinix CIO, I live this new role every day. I am measured on business outcomes, such as enhancing employee and customer quality of experience. And, as Customer Zero for all of Equinix’s products and services, my global IT organization is the ambassador for digital transformation by demonstrating the value of Equinix’s products and services for our customers and prospects.
My experience as a Digital CIO has been extremely rewarding because my team contributes to the success of our organization more than ever before. And with the pace of digital, we’ll only have more opportunities to make a significant impact in the future.
In my next article on how digital keeps CIOs on our toes, I’ll discuss how IT organizations need to drive greater efficiency and scale capacity.
In the meantime, you can learn more about how digital is impacting Interconnection Bandwidth growth in industries around the world from our Global Interconnection Index.