Digital Disciplines. Wiersema Fred

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increase in data traffic. Wired data is growing by well into the double digits annually, but mobile data is growing at 60 percent per year.17 Mobility is growing for many reasons, such as convenience and speed. The ability to do something now ties into our innate need for instant gratification, which surfaces in behavioral anomalies such as hyperbolic discounting, where immediate results are perceived as being of significantly higher value than those requiring a wait. And, time compression is important for businesses as well, whether to create differentiated customer value or to reduce supply chain costs such as inventory carrying costs. Consequently, the mere act of making a function available on a mobile device can be a market hit: CUNA Mutual developed a smartphone app allowing car buyers to get a loan while at the dealership – generating a billion dollars in loans in only two years.18 Put differently, mobile by itself can support operational and information excellence, not to mention when used in conjunction with other technologies.

      In turn, there is a need to store and process that data, helping accelerate the growth of cloud computing. Amazon Web Services, at the time of this writing the largest cloud provider, already stores trillions of “objects” – documents, photos, databases, movies, etc. – in its S3 Simple Storage Service.19 Companies such as Amazon, Google, and Microsoft each are estimated to have hundreds of thousands, if not over a million servers.20

      Underpinning it all is our innate, inescapable human need to be connected and to care about others and what they think. As UCLA professor Matt Lieberman, cofounder of a field of study called social cognitive neuroscience, puts it, “We are wired to be social.”21 Originating as a mammalian need for mothers and their infants to stay connected, he argues, this orientation drove language, growth in the neocortex, and ultimately homo sapiens' immense abilities in problem-solving, pattern detection, and collaboration. And social media is not broadcasting or marketing in a traditional sense. It is all about two-way interaction, connection, relationships, and engagement.

      Social media increases the value of all four digital disciplines. It enhances collective intimacy, by strengthening bonds between company and customer. It accelerates innovation, by enabling collaboration, providing early customer and partner input into needs and wants, and supporting co-creation of solutions. Connection to social networks is often an essential part of today's leading solutions; even cars – and sharks – now connect to Facebook or Twitter. It impacts multiple touchpoints in driving information excellence, including product awareness, purchasing, delivery, use, billing, and return processes. In the old days, consumer purchasing decisions would be based on history with the vendor and word of mouth. Today, those decisions are based on vendor relationships and social selling, often created and maintained by social media, and referral marketing – that is, word of mouth, which has become word of Twitter, Foursquare, Instagram, Facebook, TripAdvisor, or Yelp.

      The Leadership Agenda

      The digital disciplines are not merely a matter for IT managers to squeeze in between discussions of approved mobile devices and upgrades to the email system, but a board-level agenda item. In fact, according to a recent McKinsey survey,22 a majority of executives believe that the most important technology issue for the board to address is a strategic discussion regarding the impact of technology on the company's industry. Even the venerable Wall Street Journal just retitled its Marketplace section – after 27 years – to Business & Tech, explaining that “…it's likely that your company's next CEO is currently a CIO…”23 If she isn't now, she will be soon: the most popular class at venerable liberal arts icon Harvard College is now “Introduction to Computer Science,” handily surpassing “Principles of Economics.”24

      Unfortunately, only a quarter of CIOs self-report as true chief information officers. This minority focuses on driving innovation, aligning with the business units, and developing business strategy. A substantial fraction of the rest of CIOs are more like computing implementation organizers; managers, rather than leaders. Their focus is on IT operations improvement, systems deployment initiatives, and cost control.25 The good news for all these CIOs and the companies that employ them is that the four digital disciplines can turn managers into leaders, cost-cutters into revenue-generators, and also-ran companies into market leaders.

      Some have argued that “IT Doesn't Matter,”26 because IT has become ubiquitous. Therefore, the thinking goes, it is accessible to all, and therefore can't be strategic, because everyone can employ it. But how could IT not matter when much of the greatest revenue growth and wealth creation globally has been through IT and IT-enabled companies: Alibaba, Amazon, Apple, Baidu, Facebook, Google, Instagram, Tencent, and Tesla? Sure, some IT doesn't matter: conference room reservation systems and expense reporting apps are probably not the key to competitive dominance.

      But Mark Andreessen, one of the most successful venture capitalists,27 serial entrepreneur and creator of Mosaic, the first usable browser, has declared that “software is eating the world.”28 He points out that newly hatched software companies are beating the incumbents: Amazon in books; Netflix in movie rentals; Apple (iTunes), Spotify and Pandora in music; Zynga (at that time) in entertainment; Shutterfly in photos; Google in direct marketing; Skype in telecom; LinkedIn in recruiting; Square and PayPal in payments.

      Andreessen keenly observes, “Software is also eating much of the value chain of industries that are widely viewed as primarily existing in the real world.” He points out, “In today's cars, software runs the engines, controls safety features, entertains passengers, guides drivers to destinations and connects each car to mobile, satellite, and GPS networks.” And, he continues, software is critical in retail/distribution, logistics, oil and gas, agriculture, financial services, and so forth.

      Mary Meeker, Internet guru and a partner at Silicon Valley's legendary venture capital firm Kleiner Perkins Caufield & Byers, calls this effect “re-imagination.” In other words, longstanding industries are being rethought from the ground up. Of course, this also means that legacy players are in danger of being re-imagined into oblivion. The details of her annual Internet Trends report change each year, but the underlying message29 doesn't: exponential growth of connectivity due to mobile and fixed broadband; exponential growth of data; previously unheard of adoption rates for new devices such as tablets and smartphones; new-age monetization through mechanisms such as mobile advertising.

      Because of the effects of software and reimagination, digital strategies are now core to virtually any business and corporate initiative. This is one reason that Laura McClellan, an analyst with Gartner, the prestigious global technology research firm, predicted30 that by 2017, the chief marketing officer will spend more on IT than the chief information officer. Although her conclusions have been fodder for debate,31 they may not be much of a surprise to CIOs; after all, a substantial fraction of enterprise IT projects are already funded or approved by business units.32

      A related force is the consumerization of IT, as employees desire the latest devices with the coolest features and the greatest flexibility at work that they already have at home. Long gone are the days when enterprises were the first to have expensive functionality such as mainframes and green-screen terminals or data communications gear, which eventually trickled down to consumers. Now enterprises eventually deploy what consumers already have.

      And,

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