Earlier this week the Gartner Symposium series stopped in Sao Paulo Brasil and joined more than 1,000 CIOs and IT professionals to discuss business and technology issues. Like earlier symposia, the focus was on how technology creates value in the enterprise. This is what I learned from the discussions, questions and interactions at this year’s event.
The lessons learned this year in Sao Paulo are particularly important as CIOs in different regions increasingly face different situations, strategies and goals. The mood, tone, energy and questions raised in Sao Paulo were different than those coming from Orlando the week before or even Goa India two weeks before that.
IT may be the most ‘global’ of industries, but the context facing IT professionals have become decoupled across the various regions. This is a change from the time before the financial crisis as CIOs around the world faced similar challenges. Here are the unique questions, issues and challenges I saw:
Strategies calling for both growth and cost cutting
Business strategies regarding IT are moving into a world of ‘both and’ in terms of calling for both continued emphasis on growth and cost cutting. While ‘both and’ strategies are not new, the context facing Brasilian CIOs is different. In North America they are adding growth to existing cost cutting strategies, it’s the opposite in Brasil.
Brasilian CIOs face the challenge of continuing selective growth investments while harvesting scale and operational efficiencies from their infrastructure and operations. This is raising issues about ‘how much’ they should continue to invest in growth and transformation projects as they see the run component of their budgets growing and have concerns about IT’s continued strategic contribution.
Technology playing a broader and deeper role in the enterprise
The issues raised by several CIOs in Sao Paulo highlighted the complexity of their role in a fast growing region which expands their expands in the enterprise. CIOs see their companies torn between faster growth in Latin America compared to the rest of the world in general and declines in Europe.
Uneven global growth requires making hard decisions and taking tough actions, particularly when your local company is part of a global enterprise. Issues related to the tension between the need for local growth and investment compared with corporate. CIOs are looking for ways in which they can contribute to resolving this conflict constructively rather than making it a battle between regions within their company.
Diversity disrupting the corporate business model
Growth in Latin America comes from multiple factors creating a diversity of opportunity that tugs at corporate business models. Tensions between local-regional models and the corporate hub always exist, but usually based on compliance and local strategies within an industry segment. What happens when local innovation creates a new industry segment or expands company revenues into areas not considered at corporate HQ?
Seizing growth opportunities in Latin America has created new local business models incompatible with their corporate parent. Consider the Latin American branch of a consumer products company who sees an opportunity to open local retail locations to drive growth. Or consider an industrial products company finding new markets in residential construction. Both illustrate how local growth opportunities stress the need for ‘global’ business models.
The stress raises the question of the degree of interaction, shared services and leverage between local and global IT platforms. It is a stress that goes beyond local tax, regulation and trading requirements, as the new business models are fundamentally different than the corporate standard. It is an interesting challenge, particularly since these local models generate much needed revenue and growth.
Re-examining the role of IT and the CIO in the enterprise.
All of the points above contribute to changes in the role of the CIO and IT. While the ‘role question’ is a persistent issue around the world, it took on a new dimension in Sao Paulo – technology. CIOs asked and discussed the transformation of their role based on the new opportunities created by digital technology – aka the nexus of forces discussed at the event. Digital technology expands the role of Technology in ways that go beyond IT’s traditional implementation and operational role.
CIOs are looking to re-imagine their role and their organization’s role relative to these new demands. This requires a new rationalization of why these roles exist, the production function of technology and what is the future of the current IT organization – including the idea that what we call IT needs a new name.
Based on the conversations I had during Sao Paulo Symposium, the challenges CIOs face are similar to those shared at the Goa Symposium in India. Both regions face the promise of continued growth with continued pressure on costs and profitability. Companies in both regions are actively looking for opportunities outside of their home countries – going global from within their region. This creates unique challenges for companies that face a multitude of changes generated by economic, financial, global and technological disruptions. It was an honor and pleasure to work with these business leaders who happen to be CIOs on these issues in Sao Paulo. My thanks to those who took the time to attend and best wishes for the future.