: How do you
define digital transformation?
Hackett: Digital transformation
happens at the intersection of
technology innovation and business
innovation. Digital technologies
allow companies to fundamentally
change the way they deliver products
and services—improving product
and service capabilities, customer
experiences, operational efficiency
and agility. It’s about using new
business capabilities — digital
customer engagement, digitally
connected and enhanced products,
digitally optimized service delivery,
and a digitally enabled workforce—
to drive down costs, drive up
customer value, and introduce new
products and services at a pace
unheard of 10 years ago.
: How is digital
changing the role of the CIO?
Hackett: For CIOs who have built
credibility with their peers leading
business and other functional units,
digital transformation significantly
expands their role. The logical
intersection point for end-to-end
business processes, new technology
and large amounts of data is the
IT organization. However, to be
successful requires the CIO to incubate
a new set of capabilities—translating
technology innovation into business
innovation, designing modern digital
architectures, accelerating service
delivery, developing advanced data
and analytical skills, and staying ahead
of cyber threats. Building these new
capabilities while keeping the current
IT operations running smoothly—and
all on a flat operating budget—is a tall
order. In Hackett’s 2017 IT Key Issues
study, 94 percent of CIOs believe that
digital will change the way business
services will be delivered over the next
3 to 5 years. However, only 32 percent
of them believe they currently have the
resources and competencies to execute.
: How do CIOs use
benchmarking now vs. five years ago?
Hackett: CIOs are pivoting from
asking “How are we doing today” to
“What should we look like tomorrow”
as they develop plans to build these
new capabilities. Five years ago,
the main question was “How do I
compare to my peers?” Today, the
questions focus on comparisons to
world-class companies and digital
transformation leaders, and how to
use that comparative data to design
and set realistic, fact-based targets
for new IT organizations.
: What will the
CIO look like in five years?
Hackett: The CIO will focus less on
back-office operations and look more
like a technology product management
executive—shifting from being a
“below the line”/cost-driven executive
to an “above the line”/revenue-driven
one. CIOs will spend less time on the
operations of transactional systems and
more time with business executives and
technology vendors constructing new
digital-based products and services.
The migration of applications and
infrastructure to the cloud will help,
taking away much of the associated
day-to-day transactional activity.
Indeed, the new CIO career path could
include a product management stint in
a software company. This shift away
from the traditional transactional
focus could also move the CIO out
from under the CFO and into a more
operational reporting line.
The Hackett Group is a strategy, operations, and implementation firm that uses the
knowledge gained from 13,000 benchmarking studies to help its clients reach their
goals. Hackett scales its services to meet clients’ needs—on-demand consulting through
its executive advisory membership, on-the-ground consulting through its business
transformation and enterprise performance management groups, and its “gold standard”
benchmarking practice that has benchmarked 93 percent of the Dow Jones Industrials, 87
percent of the Fortune 100, 87 percent of the DAX 30 and 58 percent of the FTSE 100.
Mark Peacock, Principal, IT Transformation Practice Leader, sat down with Erin Hichman, ALM Intelligence’s Lead
for IT Consulting Research to discuss digital transformation and the evolving role of the CIO, among other things.