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How large enterprises can survive digital disruption

Kenny MacIver — May 2014
CIOs need to steer their organizations through the challenges of the digital revolution, says Oliver Bussmann.

From the music business to publishing, from the travel sector to financial services, the competitive landscape across numerous different industries is being disrupted by digital technologies. For senior management, the challenge is to ensure their organization is among the disruptors rather than the disrupted, and their technology leaders have a critical role to play in determining that outcome, according to Oliver Bussmann, group CIO at international bank UBS.

“The CIO has to be in the driver’s seat, managing [the organization] through digital disruption,” he outlines in our exclusive video interview. In his industry, rapid advances in technology infrastructure are driving massive change. In particular, the seven-fold growth in mobile penetration over the past four years is having a profound effect on customer behavior, as is the rise of social media. “By 2018,” he observes, “75% of interaction [in retail banking] will be online or through mobile channels. Already about 50% of our banking clients are using social media as a source of product information.”

And he’s not blind to a new set of disruptors emerging on the horizon. “There is a peak of venture capital investment in start-ups, especially in the financial services industry. So there are changing business models and [new] digital competition coming.”

And that is where CIOs can help. There are different operating models that can be applied to the challenge, but his favorite is a form of “co-innovation” — the notion of embedding dedicated business and IT teams into what’s going on in the start-up community. “In that way they can understand the kind of disruptive technologies that are emerging, and build environments to test drive these internally. The prospect: to learn and see what kind of use cases can be injected in the product and service portfolio.”

That is not the only antidote to disruption, Bussmann stresses. Another operating model is to set up a dedicated R&D environment, manned by business and IT. And a third is to make investments in start-up companies.

“So overall my recommendation is: put IT in the driver’s seat, but together with the business; understand the [emerging] trends and how to leverage them at an early stage; and inject those learnings into the typical product and service lifecycle,” says Bussmann.
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About: Oliver Bussmann
Oliver Bussmann is a transformation CIO and pioneer of business-building social media strategies. Head of IT worldwide at UBS since 2013, he earlier created a revenue-generating IT organization at SAP, earning him awards as European CIO of the Year and Most Social CIO.
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