Why CTO Conversations Today Must Be Around Cloud, Technology, and Outcomes
Prioritizing the cloud and choosing the appropriate set of technologies can deliver positive outcomes that impact the business. This article features KONE Corporation, a leading global provider of elevators and escalators, and its success story on how it made its elevators more than just a machine but an offering that delivered an enjoyable experience to its users.
Investments in the digitalization of business and IT have gathered momentum over the past few years. About 80% of CEOs who participated in a recent Gartner study said they were investing more in digital technology to combat ongoing economic concerns such as supply restrictions, inflation, and talent shortage.
Now CEOs have reached a stage where they want to see these large-scale investments start to pay off. However, Gartner also found that more than half of these digital initiatives fall short of the senior leadership’s expectations and take too long to generate value for the business.
Aligning priorities with business outcomes is, therefore, becoming a primary concern for CTOs. Moreover, they must look beyond cost benefits and plan outcome-based initiatives that accelerate their innovation capabilities and unlock growth opportunities.
Redefining priorities for the CTO
In the present-day scenario, CTOs are tasked with creating business value from digital initiatives without being distracted by every promising technology or overwhelmed by market pressures. Therefore, CTO priorities must pivot around establishing the right cloud foundation, developing the right technology platforms, and delivering the business outcomes that matter, both for the enterprise and its end clients. It’s certainly not an enviable task but a true test of stamina and farsightedness.
Let’s first talk about why the cloud is a priority. Nearly ubiquitous in today’s context, it infuses agility and scale into the enterprise’s innovation and business growth pathways. However, many tech heads falter in establishing the right cloud foundation to underpin their digital platforms and fail to extract value as desired.
Developing the right technology platforms is another important decision. However, it’s getting more complicated than ever because CTOs are not just choosing between one or two technologies but from an assortment of technologies that continue to evolve. Tech executives can get too caught up in the technical details to see where the real value comes from or if those are returning any value. Enterprises must learn to focus on outcomes that matter.
The power of a solid cloud foundation and the confluence of technologies
In recent years, the world has witnessed the confluence of business forces leveraging their technology backbone – for instance, Alibaba’s pioneering internet-based payment system for e-commerce or Apple’s entry into the credit cards business.
Looking ahead, CTOs should view their cloud foundation as a runway along with a confluence of technology forces to create value for the business. For example, the cloud as a proposition now revolves around how cloud, Edge, IoT, AI, data, blockchain, 5G can combine to address complexities faced by enterprises. At the same time, this powerful confluence allows them to explore uncharted areas of business, unearthing places where the real value resides.
Take the case of KONE Corporation, a leading global provider of elevators and escalators. They used to run on a cloud platform that was built in sequence together with several vendors. Although it was functional, it was hard to scale to all modern-day demands. KONE decided to build on the existing base and create a truly modern cloud and IoT platform with AWS so that the operations were inherently reliable, scalable, secure, and future-ready. Once this platform was up and running, they migrated their existing set of digital services and a fleet of connected equipment to the platform – this was a truly global effort involving 50+ countries, 10+ solutions, a handful of master IoT devices, and around a quarter of a million of connected equipment.
Once KONE switched to the new platform, they had to be 100% confident that the transition would be smooth. More than 500 people were closely involved in the migration effort.
Speaking of what this solid platform enables, Tero Hottinen, Head of Strategic Technology Partnerships for KONE Corporation says…
“An elevator is no longer just a metal box on a rope. When it's connected to an IoT environment, it enables smooth flow of people within buildings, within stations, within cities, within environments.”
With the modern platform, KONE can flexibly provide value-added services to their customers on top of their core offering of elevator and escalator equipment, and easily integrate them into existing solutions such as building management systems for energy optimization.
The KONE 24/7 Connected Services is an intelligent predictive maintenance solution. A quarter of a million devices are connected today, constantly generating data, with machine learning algorithms, providing insights into what might be happening within the elevators. It helps lower call-out rates by 30%, proactively identifies 65% of faults, and reduces entrapments by up to 40%. KONE is also the first in the industry to receive an ISO 27001 cybersecurity certificate for its predictive maintenance solutions.
Beyond concrete values being generated for the customer in terms of safety, availability, and usability, the impact on sustainability has been considerable. As Tero Hottinen concludes, “There’s a significant impact on the carbon footprint reduction when we change even a part of our maintenance operations to digital by reducing both the equipment downtime and the number of unplanned maintenance visits.”
Relying on the partner ecosystem
An enterprise’s digitalization journey negotiates several checkpoints and challenges. From adopting the cloud for re-hosting their IT assets to reimagining their business by investing in a suitable mix of technologies, it means working with multiple service providers. Each of them is a partner who brings specific expertise to support the enterprise along that journey and helps achieve a seamless migration to the target state.
Technology leaders must factor in the role of the partner ecosystem in realizing their priorities. Huge opportunities can be unlocked because of the access to a significant partner ecosystem.
In the future, CTOs will have to focus increasingly on what and where the value comes from, for their end customers. They must lean heavily on their partners to deliver on the how.
It’s the kind of cultural mindset that can translate to digital dividends for CTOs in the future.
