The newest buzzword in IT is digital enterprise – a company with all-digital customer interactions, processes, jobs and information that's fast and easy to access. A panel of CIOs and a CMO at the recent CIO Perspectives Chicago event talked about how companies are becoming fully digital and addressing the challenges associated with it.
New Customers and Interactions
Companies that go through digital transformations do risk losing some traditional customers. Increasingly, though, customers expect to interact with companies through digital channels. For example, Cars.com started as a digital company – it was originally created as an online classified ad service – but has evolved its customer base to include car dealerships, consumers looking to buy cars and advertisers looking to target potential customers.
Bill Swislow, senior vice president of product and CIO of Cars.com, says consumers have adopted digital quickly – 20 million people use the site, and 90 percent buy a car within weeks – but the B2B side of the business has been slower. That should change. "We not only are able to monetize when [customers] are on our site, with modern technology around tracking and cookies, but we can resell other publishers' ads," he says. "We know what [visitors] did on our site and can follow them as they go to other sites."
New Revenue Streams and Investments
Mohit Kapoor, CIO of credit information provider TransUnion says the company has always been data-driven but tries to differentiate itself by acting faster upon data and analytics. For example, TransUnion helps people evaluate whether their health insurance covers certain benefits; more often than not, Kapoor says, people are actually covered but don't realize it.
Previously, it took the company a month to gather the data. Now, with advanced analytics, it can figure out the answer in less than six hours. "This was tangible, real, revenue-generating business that was two to three people within the analytics group working with IT," he says. "They figured it out and we gave them the environment. Now it's a pretty significant business – with little investment."
Shifting Company Culture
To become a fully digital company, people and internal processes have to evolve and embrace the change. IDEX, for one, wants to move past its traditional, specialty engineered pumps, fire suppression equipment and flow meters and grow earnings 15 percent each year, CIO James MacLennan says. "How do we create information as a product or service? It's a huge culture shift," he says. "I'm used to creating products that are all about distribution and logistics – and we're changing that to bits and bytes."
Data-driven Products and Services
The days of digital meaning a website or ecommerce are long over. Many companies that didn't traditionally offer digital products and services now see valuable opportunities to do so. Marquette Group, a digital marketing and advertising agency, used to provide clients with mostly print ads and only a small percentage digital. Now they are 60/40 thanks to new digital efforts.
The IT and marketing departments at Marquette Group worked together to roll out a tool called LeadStream, which lets clients target customer ads based on location. Once users post location-based ads, they can log into the tool and view the performance of each based on KPIs and corporate metrics.
Since the system is built on software as a service, David Lenzen, executive vice president of sales and marketing, says the company can easily deploy it over and over again with different clients. "This allows us to build critical mass at a location and say to a company, 'We're working with 500 of your locations, allow us to create a new market opportunity.'"
Technology Infrastructure and Tools
Culture change and employee productivity in the digital enterprise can't start without the proper technology infrastructure and tools in place. At TransUnion, Kapoor says pre-screens for new customers happen faster online. "You have to do it in real-time, when they are still there," he says. "Now, we're able to tie somebody from their cookie to their ZIP code. It's very different with the customer than it was two to three years ago."
[Related: The CIO and CMO Perspective on Big Data ]
Swislow says Cars.com gets insights into buying behavior when customers are at a dealership shopping for a car. He says being able to see how many people search for a certain type of car on a given lot lets the site create customized offers for, say, someone looking at other dealers or cars.
CIOs Overlapping, Partnering With Other Executives:
In many cases it's key for the CIO and CMO to partner on digital initiatives. Part of this, however, includes a shift – and sometimes an overlap – in the CIO role and other C-level roles. When Marquette Group COO and CIO Duane Anderson started his career, being an IT employee was clearly defined. "Now, folks we hire into marketing are just as tech savvy as IT," he says. As for his own dual role, Anderson explains, "I'm consolidated with operations because the business didn't want to hear from a few different people why it wasn't working."
Kapoor adds that C-level executives should be able to take on any executive role. "If you don't get technology, you can't be C-level anything," he says. “At the end of the day, you're trying to solve a business issue. Technology is enabled – but if you don't join together, it's hard to survive."
This story, "6 Ways CIOs Are Moving to the Digital Enterprise" was originally published by CIO.