CIO And The Future Enterprise

When the concept of outsourcing was introduced, many organisations started moving their non-core business processes to providers and focused on the core. The concept was fueled by IT outsourcing companies and BPO setups and the world has witnessed meteoric rise in the outsourcing businesses. Today, we outsource for various reasons and the concept continues to evolve with the passage of time.

Businesses are facing the pressure to control costs, be more competitive and all this while facing risks which are higher than ever before. Businesses also see disruptions in the market and have to match the changes in the ecosystem. I think agility will drive this growth and sustenance. Doing more with less is seen as the mantra for future.

More from Biztech

The question is how do the CIOs and IT envisage this change for their respective organisations? How is IT contributing towards agility and doing more with less? What is your vision about future of enterprises?

Hollow Brands

Outsourcing has helped in creating much leaner organisations. I am not sure whether it has added to agility but some enterprises have seen a cost advantage and some have been able to keep the lights on much more efficiently they have done before. Few have managed to create a competitive differentiation in the market. But due to commoditisation and consumerisation, the change will happen towards more ‘hollow organisations’. This is further fueled by the multisourcing concept which will bring paradigm shift on how organisations will work in future.

A hollow organisation would believe in realising value without any assets through its brand equity and supply chain. The underlying infrastructure to support the products and services will come from variety of outsourcing activities. The real essence will be in modularisation of rest of the ecosystem to ensure that services are more like commodities. Usually the expertise will rest in switching the suppliers “at will” where required. Since business runs on IT, the change has to happen in IT.

So what happens when IT becomes modular and outsources everything? For a CIO as an individual contributor, it would mean that business services should be managed through variety of providers that can be replaced. CIO will act more as a demand manager and ensure that demand is fulfilled through the contracts with suppliers and partners.

Will The CIO Be Outsourced?

A question which comes to everyone and I keep debating on it is whether the CIO can be outsourced or not. There are a lot of people who believe that the CIO will get replaced by CMO but generally I disagree to this view point. I am not sure whether we have reached that stage as of now where we can replace a CIO. But if the decisions are as simple as pick and drop from wide range of features and services available, may be in few years down the line I might have to humbly eat my words and change my views!

The current wave has converted organisations as communities and business as ecosystem. In future, if the hollow organisations continue to evolve, there is a possibility many of them will consolidate into one entity and I strongly believe that consolidation and M&A will be easier for hollow enterprises. For example, there could be lesser differentiation between telecom, media and IT and boundaries between organisations will continue to become thinner with technology evolution. This will trigger a consolidation at some time when purpose and means align. That means, more organisations collaborate and thrive as a community along with suppliers providing more empowerment to consumer in terms of flexibility and choice. This would also mean constructive destruction of business for bigger value realisation. The agility will be inherent within this as boundaries diminish.

I know for sure I am stretching my imagination a bit too far but future grows in the wombs of history and we cannot ignore evolution as a natural phenomenon. Status quo is against the laws of nature. In the new world order, the job descriptions, architecture, business strategy will change completely. Many of the roles which are relevant today will not be relevant tomorrow. We will have new type of SLAs relevant to the new world order, new sourcing arrangements, new means of managing supply chain, new performance metrics relevant for new set of people and business etc. It is sometimes better to envisage where the change is going to be and predict future employability.

Challenges

There will be few things which will continue to challenge this evolution. Organisation cultures will come as a barrier, individual interests and priorities will prevent progress, there will be vested interests of vendors and partners who would always like to be indispensable, inability to quickly change gears will continue to threaten. But I feel next two to three years will be crucial in the evolution and by then, some of these will be more of an established fact.

In Conclusion

The organisations that envisage these changes have to ready and bring changes now in order to be aligned few years down the line. Many of these changes should be thought and incubated in advance to prevent any possible disruptions. CIOs need to think ecosystem changes and create strategies to adapt and adopt especially in areas such as SOA, BPM, open source, etc. Overall, change management will be the key to creation of hollow enterprise or organisation.