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Shall we fight or befriend the digital giants?

Shall we fight or befriend the digital giants?

CIOs need to discuss this with their CEOs in the year ahead, says Gartner.

Even if an industry is not directly challenged by the new digital giants, the expectations of customers will be so radically changed by their experiences in other domains that the industry agenda will be redirected

“Digital and information technology capabilities are no longer support services to a business. They have become important innovation, growth, revenue-winning and competitive disruption tools,” says Gartner.

Thus, CEOs have an important role and increasingly unavoidable responsibility to personally lead or actively support and empower the leaders of digital business change, it adds.

In a new report on CEO information and technology resolutions for 2017, the analyst firm cites ways CIOs can help their CEOs become more effective at achieving digital business change.

One of these is to declare whether the company is 'fighting or friending the digital giants', according to Gartner analysts Mark Raskino, Graham P. Waller, Ivar M Berntz and Stephen Prentice.

The report cites a 2016 Financial Times article wherein Thomas Buberl, the incoming CEO of French-based insurance company AXA, was quoted as saying: "Today our competition is Allianz and Generali, but tomorrow it could be Google and Facebook."

Other business leaders will face this situation with the likes of digital giants that include Amazon, Tencent, Baidu, Alibaba and Uber. These digital giants will create platforms, facilities and ecosystem business opportunities with traditional industries.

“Each company must decide whether its industry will be entered and whether to try and repulse competitors or partner with them,” the report states.

“Even if an industry is not directly challenged by the new digital giants, the expectations of customers will be so radically changed by their experiences in other domains that the industry agenda will be redirected. In some cases, industries might actively reach out to digital giants to court them.”

“Whatever the situation, your people need clarity of position,” says Gartner.

“Otherwise, they could make some big strategy mistakes — for example, trying to build a technology platform that can never win, or becoming dangerously dependent on the cloud technology services of a giant that later attacks your sector.”

In the report, Gartner suggests organisations take the following actions:

■ Decide your essential position — to fight or partner with the digital giants?

■ Make that position clear to the board of directors and the executive team.

■ Decide whether this strategy approach should be made public or remain private.

■ Don't use "co-opetition" as a weasel word to evade this important policy question.

Amazon CEO Jeff Bezos
Amazon CEO Jeff Bezos

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Tags strategyCIO roleGartnerGooglecareerdigitalamazonbaidualibabaTencentUberdigital disruptionCEO and CIOscxMark RaskinoDXdigital ecosystemCIO Agenda 2017

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