THE DIGITAL CIO

Now is your time to lead business transformation

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UNPRECEDENTED
OPPORTUNITY
AWAITS THE CIO
 As CIO, your
own journey Theres little question that digital is the new language of business. In a
recent survey, 80 percent of senior executives reflected that an investment
to digital mastery begins
in digital transformation within their organization is very important to
with shaping a powerful future success. However, only a third plan to hire a chief digital officer within
digital vision for the the next two years.1 Instead, CEOs are looking for a strong digital leader to
business a vision emerge within the business, with the skills and perspective to drive a holistic
digital strategy and roadmap for future success.
that reimagines how the
organization creates In its 2016 CIO Leadership Playbook, Gartner shares that CEOs are most
likely to look to the CIO to fill the gap in digital leadership.2 In many ways,
assets that deliver goods,
the CIO is in the best position to drive an organization-wide strategy that
services, and experiences brings people, data, and processes together to create new business models
that customers perceive and deliver competitive advantage. This ability to connect the dots to
as valuable. see the big picture is more important than any other success measure for
digital leadership, according to Forrester.3 Tellingly, Forbes Magazine says
organizations in which CIOs were part of overall development strategy
outpace their competition 2:1.4

Nigel Fenwick et al. Craft Your Digital Vision.

Forrester. February 9, 2016.

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PROFILE OF THE
SUCCESSFUL DIGITAL CIO
At Microsoft, we see that the most effective digital CIOs
share these leadership traits:

INNOVATION INFLUENCE VERSUS STRONG PARTNERSHIP

MINDSET CONTROL LEADERSHIP BETWEEN IT AND
STYLE THE BUSINESS

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 INNOVATION MINDSET

To get the In a recent survey of senior executives, the Economist Intelligence Unit (EIU)
found that only 7 percent say the CIO plays a leadership role in identifying
money you need for opportunities to innovate. When asked to identify the primary role of IT, 14
tomorrow, you have percent said leading technology innovation, versus 86 percent who cited more
to make traditional IT functions such as maintaining and integrating legacy systems and

changes operating as a service provider to the business.5 To lead the digital shift, the CIO
will need to look beyond these traditional practices and transform IT from within.
in how IT
When asked to identify the CIOs biggest challenge in transforming the
operates today organization to a digital business, Gartner Research Vice President Donna
Fitzgerald wrote, the digital transition for IT requires giving up a service
mentality and instead adopting an investment mindset. Supporting the legacy
systems of the past cant be allowed to consume all of the money necessary
to thrive in the future."6 For example, CIOs are investing in modernizing IT
end-to-end. Historically, IT has taken an incremental approach to modernizing
systems as new technology and processes arise. However, according to
McKinsey, organizations that instead take a holistic, end-to-end approach
to IT modernization will be more effective at creating and supporting viable
digital businesses. An end-to-end approach can help reduce the amount
Gartner, Smarter with Gartner, "Analyst Answers: of time required to translate business ideas into new products and services,
The CIOs Biggest Digital Transformation
Challenges." September 23, 2016. helping the business reduce time to market by up to 60 percent.7

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INFLUENCE VS. CONTROL LEADERSHIP STYLE
IT functions
Many IT departments have been reluctant to embrace new ways of working,
even stifling innovation and collaboration in favor of maintaining cross-
that recognize
company standards and cost efficiency. This approach may have once been the value of bringing
the norm, but fostering innovation and disruption is now essential for CIO shadow IT under the
success, according to Deloittes 2016-2017 Global CIO Survey. Interestingly, IT umbrella are viewed
when assessing their own leadership competencies, only 47 percent of CIOs
by the business as being
surveyed consider influencing internal stakeholdersan essential skill
for leading changeas a strength; however, 64 percent consider it an ideal less intimidating and
characteristic.8 much more
For the CIO, the key to being an influential leader is to empower users and business
instill trust and freedom in the workplace. Its about creating an environment intimate.
where the business feels like it can come to IT with creative ideas. For
example, progressive CIOs are realizing they must influence digital business
and shadow IT, not control itwhile helping drive innovation around IT
best practices.9 Gartner analysts Kurt Potter and Stewart Buchanan write,
While traditional, governance and control strategies would be prudent for
centralized IT and major segments of decentralized IT, with digital business
and shadow IT, influencing it will more likely product the most positive
Stephanie Overby. How to Embrace the
outcomes with business units.10 Benefits of Shadow IT. CIO.com. June 6, 2016.

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 In organizations
where IT is considered STRONG PARTNERSHIP BETWEEN IT AND
THE BUSINESS
a partner in the
business, it is viewed The trend toward companies distributing IT budget for innovation across
the lines of business is continuing. According to Deloittes 2016-2017 Global
as 3x more effective at
CIO Survey, CIOs surveyed reported a decrease of 11 percent IT budget
implementing allocation to support business innovation between last year and this year,
bottom-up highlighting the need for CIOs to closely partner with the business to help
IT innovation drive innovation.11
and creating As funds continue to move towards the business, CIOs need to focus
a healthy IT culture. developing capabilities to deliver business value. Data and analytics is just one
example where IT is taking the lead to help the business improve decision-
making and deliver new services.12 Harnessing the Internet of Things is also
helping IT lead the shift from products to outcome-based services. For
example, by connecting a production line to the cloud for advanced analytics,
a leading manufacturer was able to meet customer demands for faster delivery
of products while decreasing time wasted in the manufacturing process.
Darrin Morrissey. "How CIOs Shape a Digital
Transformation Strategy." Cioinsight.com.

August 22, 2016.

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HOW WE
CAN HELP
At Microsoft, we have developed a rich digital maturity model that will help digital CIOs successfully lead the
business to create a strategy and roadmap for digital transformation. The model helps you engage in digital-era
conversations with the CEO and other business leaders, with the goal of creating new digital value and clarity on the
steps needed to bring digital aspirations to life.

YOUR DIGITAL BUSINESS ASPIRATIONS AND PRIORITIES

ENGAGE YOUR EMPOWER YOUR OPTIMIZE YOUR TRANSFORM

THEMES CUSTOMERS EMPLOYEES OPERATIONS YOUR PRODUCTS

BUSINESS
CAPABILITIES

TECHNOLOGY
ENABLERS

DIGITAL MATURITY ASSESSMENT

The model is organized around four common themes that reflect top areas of investment today. These areas align to
nearly 100 line-of-business capabilities and related technology enablers. The technology enablers are further defined
through the lens of four maturity stages, ranging from lagging to industry best practice. Using this rich model, a
Microsoft advisor will help you lead the business on a digital maturity assessment, uncovering business capability and
technology enabler gaps, and developing a strategy and roadmap to accelerate the digital journey. On the next page,
you can see examples of how digital CIOs are using the model to help the business transform.

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EXAMPLE | ENGAGE YOUR CUSTOMERS
The CIO of a major retailer meets with the chief marketing officer, who wants to deliver a cutting-edge in-store shopping
experience complemented by a compelling and consistent omni-channel experience. Upon completing the digital
maturity assessment, in-store engagement is identified as a digital lever that will deliver the most value. By bridging
the gap in this area with RFID tags, the organization increased revenue and gained a competitive advantage.

CAPABILITIES ENABLERS

Customer data/analytics
Digital advertising/CLM In-store CURRENT STATE
Tech-enabled stores engagement
Customer service In-store analytics TARGET STATE
automation
ENGAGE YOUR Mobile commerce
CUSTOMERS

LAGGING ADAPTING MATURING BEST PRACTICE

Limited to no use of Some use of technology aids Extensive use of technology aids Data from technology aids
technology to inform (e.g. RFID tags) to inform (e.g. RFID tags, motion sensors) across all store locations
in-store processes and in-store processes such as to inform in-store processes as provides insight into in-store
experience design inventory management well as provide feedback into processes and optimizing
experience design customer experience

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EXAMPLE | OPTIMIZE YOUR OPERATIONS
The CIO of a city government meets with the transportation secretary, who wants to reduce traffic accidents during snow
storms. After completing the assessment, they identify predictive maintenance as a critical digital lever for optimizing the
snow removal fleet. By bridging the gap in this area with a GPS and a cloud based monitoring system for the entire fleet,
the city is able to redirect resources to where they are needed most, increasing citizen safety and reducing traffic accidents.

CAPABILITIES ENABLERS

Data-driven supply
chain and logistics Yield optimization CURRENT STATE
Digital asset Predictive
management maintenance TARGET STATE
Intelligent process Remote monitoring
OPTIMIZE YOUR and quality control
OPERATIONS

LAGGING ADAPTING MATURING BEST PRACTICE

No use of predictive Predictive maintenance Predictive maintenance Predictive maintenance

maintenance available for <50% of implemented for all government implemented for all
government and contract and contract fleet government and contract
fleet fleet. Predictive analytics
used to optimize schedules

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PARTNERING FOR SUCCESS
Microsoft and our extensive ecosystem of partners are here to help you lead your digital transformation journey. We
have worked with IT leaders at some of the worlds largest organizations and would welcome the opportunity to share
our digital maturity model with you and your leadership team.

Lowes partners with Microsoft to The Sao Paulo State Court of Justice ExpressJet and Microsoft improve
redefine home renovation and Microsoft construct a modern, safety and boost pilot morale
sustainable court
Lowes wanted to help customers ExpressJet wanted to provide pilots
imagine how kitchen projects would The State Court of Justice in Sao with real-time weather data and make
look in real life before embarking on Paulo (TJSP) needed help designing daily tasks more efficient. Together
a remodel. Lowes partnered with a long-term plan helping the court with Microsoft, ExpressJet equipped
Microsoft to create an augmented operate more efficiently, better serve pilots with an electronic flight bag
reality experience, enabling customers the State of Sao Paulos citizens, and loaded with weather, mapping, and
to experience a holographic comply with federal law. By partnering flight information, helping pilots
representation of the kitchen, adjust with Microsoft to develop the long make more informed decisions while
options instantly, and share designs term digital government strategy and eliminating the burden of a flight bag.
online. The solution brings customers plan, judge productivity increased by Pilots can also stay current on news
a new way to experience full-scale 50 percent and the quality of citizen and keep in touch with coworkers and
design and appliance options while services were improved with 70 percent family while on the road.
maximizing store floor space. faster response times.

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GET STARTED TODAY
Visit enterprise.microsoft.com/cio
Attributions
1
The Rise of Digital Leadership. IIC Partners. September 7, 2016.
2
2016 CIO Leadership Playbook. Gartner.
3
Organizing Your Digital Future. Forrester, December 2, 2015
4
Ben Kerschberg. How CIOs Can Use Crowdsourcing to Drive Digital Business. Forbes. September 19, 2016.
5
Why CIOs must look beyond departmental walls to inspire innovation. The Economist. 2016
6
Gartner, Smarter with Gartner, Analyst Answers: The CIOs Biggest Digital Transformation Challenges. September 23, 2016.
7
Driek Desmet, Markus Lffler, and Allen Weinberg. Modernizing IT for a digital era. McKinsey. September 1, 2016
8
Khalid Kark, Mark White, Bill Briggs, Anjali Shaikh. Navigating Legacy: Charting the Course to Business Value (2016-2017 Global
CIO Survey). Deloitte University Press. November 10, 2016.
9
Sarah K. White. Empower your employees by embracing shadow IT. CIO.com. September 13, 2016.
10
Gartner, Coming to Terms with Business Unit IT to Prepare for Digital Business. Kurt Potter, Stewart Buchanan. April 21, 2016.
11
2016 State of the CIO Survey. CIO.com. December 21, 2015.
12
Hugo Moreno. 5 Keys To CIOs' Digital Transformation Success. Forbes. September 15, 2016.

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