CIO AND DIGITAL TRANSFORMATION UNRAVELLED

IDC recently completed Directions, its regional briefing on information technology, nation macro-economics and IT spending, digital transformation, future role of CIO. Excerpts

In February, IDC successfully staged its regional industry briefing, Directions 2023, for top executives of the information technology industry in Dubai, UAE. Arun Shankar, previously Editor with Enterprise Channels MEA, engaged in a deep dive conversation with Jyoti Lalchandani, Group Vice President and Regional Managing Director META, IDC, to highlight the key takeaways and action plans for regional CIOs.

Centres of influence

[EC MEA] Digital transformation is driving innovation and creating additional centres of influence. How is this impacting the role of the CIO, technology investments and technology decision making?

[JYOTI] We think that the ecosystem of decision makers for IT investments was previously very concentrated. Now we are going to see that ecosystem expand. We are going to get different sets of stakeholders beyond just the IT organisation. It is going to be line of business, sales, marketing, customer experience, products. On one hand, you are going see expansion in the decision-making ecosystem beyond IT. Within IT, we are going to see other stakeholders of CXT, AI,

DevOps, and the infrastructure teams, application teams. All of them are going to become critical stakeholders for vendors and suppliers to engage with. It is going to become a lot more distributed in terms of stakeholders, and they are going be what I call key influencers in the technology lifecycle.

[EC] Will the overall budget and investment into information technology still be concentrated with the CIO and IT organisation?

[JYOTI] I see that changing. I think IT costs and delivery costs are going be embedded within business. We are going to see IT embedded within various business units within an organisation. The role of IT is going to be, how do I deliver end-to-end services regardless of the business unit.

Today the CIO is an important stakeholder, but you have digital transformation leaders, sustainability officers, senior compliance folks. Technology is so embedded across business units, across functions, that it is no longer an operational part of the business. It is now embedded across the enterprise.

Automation

[EC MEA] How is the nature of automation transforming in organisations today?

[JYOTI] Automation is playing the role of enabling the organisation to scale at a much faster pace. Since we have a skills challenge on one side, there is a lot of task-based automation that has been the norm for quite some time. We are going to see a shift from task-based automation to more end-to-end process automation.

With AI enabled and AI embedded within automation, that means machines are able to predict and even, in a ubiquitous manner, actually deliver the service, by predicting the service. We think automation is going to be a critical component in the longer term.

[EC MEA] When we talk about automation across the enterprise are we still referring predominantly to robotic process automation?

[JYOTI] We have moved beyond that. We are talking about AI enabled automation, which is end-to-end process automation. A lot of investments today are for specific task-based automation like account receivables, customer onboarding, KYC, and others. A BOT goes in and does a manual task removing all repetitive operations.

End-to-end process automation with AI enabled backend means that the system is able to predict and proactively take action. So, it is not just predicting but taking autonomous action.

[EC MEA] As per IDC results, the top priority for the CIO remains, IT service management and not digital transformation. Is there a contradiction?

[JYOTI] What does IT service management mean? It means delivering IT as a service to the organisation. It means how do I provide end-to-end IT delivery services? So that continues to be the number one priority and also it gives you a sense of the shift where as a service is becoming one of the mantras for the IT organisation.

In addition to that, the other priorities for the IT department were of course skills, digital capabilities in emerging technology areas, and outcome-based pricing.

Digital sovereignty

[EC MEA] What is the modern-day concept of sovereignty considering the development of a multi-polar world with multiple global spheres of influence and control?

[JYOTI] Digital sovereignty is going to be a very important shift, in the way organisations approach technology and their investments. We started to see some signs of digital sovereignty as soon as the European conflict broke out.

A lot of our initial focus on sovereignty was really data sovereignty, and then cloud, with questions like where is the data located and where is the datacentre located. And so on. And beyond that, there is supply chain sovereignty. The questions is about do we diversify our supply chain in order not be overly reliant on, one or two or three country partners.

This has led to assurance sovereignty. If you look at public services or banking services or retail services, it is access to critical infrastructure and critical services delivery. Countries are thinking about what does it mean in terms of, how do I get access to these critical services and so on.

We are now talking about end-to-end sovereignty. It is no longer just a data discussion, but a digital sovereignty discussion. The focus is shifting from geopolitics to geoeconomics in that sense.

[EC MEA] How will global geoeconomics impact technology decision making at the country and nation level?

[JYOTI] The fact remains there is going to be a lot of questions on the data side and on the supply chain side. How sovereign is the data? What is my level of influence on the data? How can I control the data? What access do I have on the data? These are going to become critically important.

If you think about digital infrastructure and if you think about underlying national level security infrastructures, they are all technology enabled. Technology is going to become one of those areas of focus for public sector and governments around the world.

We see globalisation reducing quite dramatically and there is a lot more nationalism, and there is a lot more protectionism. We can see that countries are looking for how do I get more in-country value for something. Countries want to diversify supply chains, and not be overly reliant on few partners, these are going to be important areas.

Demand and supply imbalance

[EC MEA] Considering the recessionary pressures in the macro environment, how are CIOs going to balance their investments in legacy and digital IT environment?

[JYOTI] We think organisations are going to continue investing in digital because for some, it is a journey that began two years ago and organisations are already reaping the benefits of that.

Organisations have realised that over time we are going to see a shift between the revenues that they generate from traditional business models and new digital business models. They are optimising some of the costs in the traditional areas to reinvest in and repurpose those investments around digital initiatives and digital programmes.

Digital transformation is going to continue to lead the spending agenda of organisations. How they reprioritise the investments is going to be interesting because they are going to focus a lot more on efficiencies in the backend. Automation and AI enabled automation is going be critically important.