IBM: For CIOs, the Customer Is King

 
 
By Darryl K. Taft  |  Posted 2014-03-16
 
 
 

According to a new IBM study, more and more chief information officers (CIOs) are realizing they need to listen to the whims of their organizations' customers more than any other influencing force.

With consumers engaging more directly with businesses through mobile and social media, more than 60 percent of CIOs will focus more heavily on improving the experience of customers and getting closer to them, according to the report.

The report, entitled "'Moving from the Back Office to the Front Lines—CIO Insights from the Global C-suite Study"' is based on face-to-face conversations with more than 1,600 CIOs from 70 countries and 20 industries worldwide. The research, conducted by IBM's Institute for Business Value, reveals that customers drive CIOs to turn their focus to the front lines.

"'The study reveals the emerging reality that there is no longer any real distinction between the customer experience and contemporary business strategy,"' Peter Korsten, global leader of the IBM Institute for Business Value, said in a statement. "'The quality and nature of the front-end experience has become the point of entry to the most valuable information any enterprise can possess—information about its customers, employees, or any other relevant constituent group."'

More than 80 percent of CIOs report they are shifting their focus to the front office where marketing, sales and service managers work directly with customers. To do so, they are investing in new technologies to gain deeper insights into customer data. Examples of these items include sentiment mining and social network analysis to identify unique behavioral patterns and reliably predict critical trends.

Moreover, IBM said CIOs at outperforming enterprises recognize that technology factors can have a key impact on their organizations. This focus on technology represents a notable shift over the past five years; in 2009, CIOs ranked technology factors as their sixth-biggest pressure point behind categories like market factors and macro-economic changes.

"There have been significant changes over the past eight years," Nick Smither, CIO of Ford Motor Company told IBM as part of the study research. "One big change is accessibility. IT didn't always have an equal seat at the table. Now, my peers are far more tech-savvy."

The IBM study showed that 66 percent of CIOs surveyed said they believe their IT departments have mastered the basics of technology within their firms. This investment in knowledge and skills is freeing up CIOs to look at new platforms that enable them to build a "'Customer-Activated"' enterprise, IBM said.

Meanwhile, as customer engagement becomes a critical driver for CIOs, cloud computing has increased in importance, with 64 percent of CIOs naming the cloud as part of their visionary plans, compared with 30 percent in 2009. Likewise, mobility solutions have also experienced a jump in importance, with 84 percent saying mobility is their top focus, compared with 68 percent in 2009. With these factors as drivers, two-thirds of CIOs surveyed said they are now exploring how to better serve and collaborate with customers using cloud computing and social networking tools.

In addition to CIOs focusing more on customers, the IBM study indicated that more CEOs are committing to customer service as a key driver.

"'A growing number of CEOs believe customer influence shouldn't be confined to activities in which customers have traditionally participated, such as developing new products or services,"' the study said. "'Instead, CEOs stand ready to relinquish absolute control of what is typically considered their domain—developing business strategy. In fact, CEOs told us customers exert a bigger influence on their organizations' business strategy than all but the C-suite itself."'

IBM conducted its in-person analysis with more than 4,000 C-suite leaders by using a global team of business strategists, consultants, data scientists and statisticians.

IBM's analysis also showed that chief financial officers (CFOs) who use big data and analytics tend to be much more effective than those who do not.

 

Rocket Fuel