As algorithmic business becomes a disruptor, here is what a CIO needs to do

Fueled by uncountable data (analytics and AI as well) ‘algorithmic business’ will continue to grow and disrupt your business. It is time for CIO to stand up and take charge.

Algorithms, artificial intelligence (AI), bots and chatbots are the new digital disruptors that are already transforming business and creating new industries. To support the new capabilities and business models of digital and algorithmic business, CIOs must design and deploy their digital business technology platform, as per Gartner.

Algorithms Are Moving to the Forefront of the Differentiation Race

Algorithms capture the knowledge that turns raw data into valuable insight, and CIOs must use them to drive speed, scale and consistency in their digital business journey. Applied to huge datasets, algorithms allow highly accurate, personalized offerings, which in turn can drive revenue and differentiation.

Algorithms are already well established in human resources industry. In other industries, organizations are making advanced algorithmic models available via open marketplaces, which ultimately facilitates access to algorithms that are beyond the development reach of many organizations.

Digital Disruptors Will Dominate in the Next Few Years

In parallel, AI has advanced dramatically during the past year. When enhanced with "machine learning" through the application of capabilities such as deep neural networks, AI is starting to outperform humans in some areas. Algorithms, AI, bots and smart things will dominate business interactions during the next few years: AI and bots currently allow platforms to gain a voice, while algorithms and AI will deliver the intelligence to empower a new generation of robots, cobots and drones and self-driving vehicles.

CIOs must embrace those new business opportunities.

Design and Deploy Your Digital Business Technology Platform

The pace of digital disruption demands a new approach to IT. "CIOs must build their digital business technology platform to support the development of digital business," said Steve Prentice, VP and Gartner fellow. "At a minimum, the IT organization needs to be able to design the 'big picture' of all the new information and technology capabilities required to support digital business. The CIO can then work with the rest of the organization to define who — if not IT — will build, fund, support and own these major components.

The five major platforms of digital business are as follows:

• Information systems platform, which supports the back office, and operations such as enterprise resource planning and core systems.
• Customer experience platform, which contains the main customer-facing elements, such as customer and citizen portals, multichannel commerce and customer apps.
• Data and analytics platform, which contains information management and analytical capabilities. Data management programs and analytical applications fuel data-driven decision making, and algorithms automate discovery and action.
• Internet of Things (IoT) platform, which connects physical assets for monitoring, optimization, control and monetization. Capabilities include connectivity, analytics and integration to core and operational technology systems.
• Ecosystems platform, which supports the creation of, and connection to, external ecosystems, marketplaces and communities; API management, control and security are its main elements.

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