The sesquiannual gathering of Cutter Consortium clients and consultants just took place in Cambridge, Mass., on November 15-16. The main theme was “digital transformation,” including the new business models centered on “digital data streams” and the implications of this transformation for the CIO’s organization.
Cutter Fellow Prof. Karim Lakhani presented a Harvard Business School case study on “GE and the Industrial Internet.” It tells of GE’s decision to create a new entity devoted to applying IoT technology to industrial environments (manufacturing, transportation, electricity generation, etc.). There was a lot of discussion of how some other companies missed the transformation to digital services, in part by underestimating in the early 1990s the explosion in the number of smartphones.
At the same time, some participants expressed a cautionary view. First, we still need products (“I can’t eat or wear data”). Secondly, the digital transformation has been progressive, perhaps starting with the dematerialization of financial instruments many years ago already. But several speakers gave examples of new forms of value creation through data.
Cutter Fellow Vince Kellen, who is also CIO at University of California San Diego, led a workshop on the evolving role of the CIO in this new world. Some of the key suggestions for new/increased responsibilities were:
- manage privacy and data residency when a company collects and stores so much information about its customers;
- “ingesting” startup companies or fostering internal innovation without killing those groups through corporate bureaucracy;
- leadership in the upcoming “human/machine teaming” that comes with big data analytics, natural language processing, machine learning, augmented reality, etc.;
- decommissioning the accumulation of legacy systems;
- navigating the contrast between the need for extremely stable processes to keep the “IT utility” running 24×7, and an innovation capability that, on the contrary, must constantly try new things that will often fail;
- bringing together IT and OT (operational technology) in industrial companies.