Change in digital technology is a fast-paced, evolving and a persistent threat requiring ongoing ‘Digital Conversations’ among the C-suite. Beyond traditional investments in areas such as social, mobile, cloud and data mining and analytics, Entertainment, Media and Communications (“EMC”) companies have additional challenges in the form of investing in new content production and distribution technologies to meet ever-changing consumer preferences. Three key changes introduced to the EMC CIO by digital transformation are:
• Direct customer engagement allowing access to customer data that can be used to gain consumer insights and enhance customer experience.
• A proliferation of content formats, types and versions that need to be accessible on a constant stream of new Consumer Electronic devices through a broader array of channels and service providers.
• Consumer demands for content to be available anytime, anywhere and on any device with a more customized and personal experience.
"The exponential increase in digital content and new higher resolution 4K images are causing EMC CIOs to consider scalable cloud technologies to store, transcode and distribute content"
In our recent survey of CIOs across 12 countries, we found that 59 percent of EMC companies are concerned that the speed of technological change will potentially threaten their growth prospects (according to PwC 2013 Digital IQ Survey).
There are no simple answers to fully alleviate this concern, but having strong collaboration including intertwining business and information technology strategy, increasing participation in social media and mobile, and investing in innovation will improve any EMC company’s Digital IQ. In fact, we found that companies across all sectors with strong collaboration between the CIO and the C-suite are four times as likely to be top performers. These companies clearly have a higher Digital IQ, which is the measure of how companies understand the value of technology and weave it into every aspect of their organization. EMC executives can help raise their company’s Digital IQ by considering the following questions:
1. How often do your firm’s C-suite executives discuss how information technology can support the move to digital to help increase its share of the global EMC business? Are “digital conversations” taking place regularly? Are senior decision- makers aligned with the business strategy?
2. Is your firm’s CEO a champion of information technology to help meet its goals?
3. Beyond setting corporate strategy, does your firm have an effective roadmap that lays out steps to achieving the strategy— blending together strategy, operations and technology—and the costs of doing so?
4. Are information technology investments being made with overarching business goals in mind, or are these decisions happening in a silo?
5. Is IT helping to break down the business silos by providing solutions that work across the entire value stream, enabling cross business unit processes and decision making?
6. Is IT engaging in pilot programs to develop a deeper understanding of the “art of the possible”—the ways that new, emerging and disruptive technologies such as social, mobile, big data and cloud may be leveraged to enable new business opportunities and greater business benefits?
As demonstrated in these questions, understanding the business strategy and the overall costs is important to ensure information technology maps to over-arching business needs and to allow companies to adapt quickly to market changes to maintain competitive advantage.
As far as investment areas, we have found that the majority of EMC companies, particularly in the Asia-Pacific region, see the potential of Big Data in providing a competitive advantage. And the industry is fairly aggressive in its use of social media focused on marketing and publicity. While investments by EMC companies sometimes lag behind overall respondents, the industry often spends more for social and mobile for customers. As well, software for managing images and video is among the fastest-growing segment of the content management market. The exponential increase in digital content and new higher resolution 4K images are causing EMC CIOs to consider scalable cloud technologies to store, transcode and distribute content.
Looking ahead, the industry may more aggressively invest in social, mobile and analysis technologies. Defining priority technology innovations are most often explored through an ad hoc team, dedicated group or a third party – fairly similar to what we found with the overall respondents. Industry specific concerns due to disruptive technologies must also be considered in defining investment plans. Areas to consider include content type, production, distribution, revenue windows, and customer consumption. In this time of rapid change, EMC CIO’s must factor in:
• Changes in distribution window timing, supported by advanced analytics techniques, adjusted over time based on feedback loops of consumer data,
• Changes in monetization models,
• Strategies to foster collaboration through social media that engages consumers and motivates internal teams to push boundaries within an ecosystem that is in constant state of flux,
• Maintaining a level of intimacy with consumers across proliferating devices,
• Completely digital production from camera to screen,
• Content production and distribution in the cloud, in a manner that better equips you to know what content you have and the rights available to monetize it,
• Spectrum shortages,
• New entrants offering storage, workflow, and processing of multiple formats, and
• Fully functioning, highly secure collaborative digital supply chains.
These, in addition to general investment strategy issues, result in a more complex environment than ever that often requires a new set of IT competencies. In order to increase Digital IQ, EMC CIOs need to develop and manage to strategic plans that are tightly aligned with the business strategy. In addition they need to stay abreast of disruptive technologies and innovate on ways that they can advance and support the business. Approximately 55 percent of EMC companies in our survey have a single multi-year roadmap for the business. Even though over half of our companies have this common characteristic of top performing companies, almost half need to focus on building their Digital IQ.