As chief information officers (CIOs) and other executives become more deeply involved with digital transformation, one thing that's clear to them is that digital transformation is not an IT project but is instead at the center of business strategy.
Without question, digital is driving the future of business. Consider this: By the end of 2017, revenue growth from information-based products is projected to be double that of the rest of the product/service portfolio for one-third of all Fortune 500 companies, according to IDC.
Hunter Muller: As the CEO of a major technology enterprise, what have you learned about the challenges of developing new product/service offerings and expanding into new markets?
Michael Dell: Listening to your customers is the key to surviving and thriving in business. At Dell, we call it having âbig ears.â From the beginning, we built the company from the customer back, partnering with them to design new products and services. In 33 years of business, customer feedback has proven to be the best crystal ball there is.
Equally important is a willingness to disrupt yourself. We're living in an unprecedented time. Data, the Internet of Things (IoT), and technology have replaced industrialization as the driving force of progress and transformation. To win today, you must be fearless about transforming for the future. That's something I've always embracedâwhether it meant diverging from the business model that fueled our early success or taking the company private after 25 years of being public, or combining with EMC to become the largest enterprise infrastructure company in the world. Business as usual is how you lose in the digital era in which we live.
HM: From your perspective, what should every C-suite executive understand about digital transformation?
MD: I talk to a lot of business leaders from every industry and in every region. None are asking if they should digitally transform. They know their future depends on it. As a matter of fact, 45 percent of them believe their businesses may be obsolete in five years and nearly half don't know what their industry will look like in three. It's creating a lot of digital fear out there. But it shouldn't. When the CEO and board see digital transformation as a business opportunity rather than an IT problem, you are halfway there. Then it's about finding the right IT partner with the expertise and depth and breadth of solutions and services to get you where you want to be.
HM: Thanks to their technical expertise and unique view across the enterprise, CIOs are often deeply involved in digital transformation efforts. Can you offer recommendations as to how CIOs should be thinking and acting like CEOs to help lead digital strategies?
MD: The CIO role has changed because technology's role in business has changed. No longer relegated to the back office, technology is how modern enterprises are gaining competitive advantage, and this aligns the CIO and CEO like never before. A few pieces of advice for CIOs:
- Digital transformation, like any key agenda for the CIO, must be driven from and closely linked to the core strategy of the company.
- Embrace the fact that every business will to some degree be a software business in the future. So start building (or flexing) your software development muscle now to get ahead and stay ahead of the competition.
- Focus on data. The truth is out there, but you have to get good at aggregating, integrating, analyzing, and acting on customer data. The CIO holds the key to this most valuable resource.
- Create a culture of fearlessness when it comes to trying new ideas and technologies. It's never been simpler to pilot a technology solution that can dramatically change an organization's effectiveness or competitiveness.
HM: Despite all that's been written about digital transformation, many executives still don't really understand it. Which aspects of digital transformation are hardest to grasp, and what's the best way of getting executives to understand the strategic value of digital transformation?
MD: Digital transformation is a buzzword that leaves room for interpretation. But at its core, it's really about figuring out how to make the most of all this rich data that today's technology is cranking out at lightning speed. How do you use artificial intelligence, machine learning, deep learning, etc., to turn real time and older time series data into useful insights to make your products and services better and smarter?
When done right, it creates a continuous cycle. You embed sensors in your product (think Tesla or GE) or create a software to deliver a digital service (i.e., Uber or Spotify). The embedded software feeds you real-time data about product usage, performance, customer information, etc. You use those insights to quickly improve your product or service or to innovate new ones again and again. It's a virtuous cycle, and the faster you go through it, the better you get and the greater the distance between you and your competition. That's the definition of strategic value if you ask me.
HM: What additional leadership advice would you offer to C-suite executives that are striving to transform their businesses? What should they be thinking about?
MD: Don't be paralyzed by digital fear. Transformation is within reach of every business, large and small. There's this perception that the advantage is solely with the disruptors. But we're helping giant global retailers, automotive companies, etc., masterfully reshape and digitize for the futureâand their scale is helping them do it.
