SECTIONS - Executing on the IoT
August 10, 2015

Inside the Shake up: The Internet of Things' Impact on the CXO

By Special Guest
Scott Nelson, EVP and CTO, Logic PD

There’s no question that the Internet of Things is here to stay.

One topic within that needs addressing is how the IoT is disrupting the C-suite. I work with and observe executives struggling to meet the IoT expectations of shareholders and customers alike. The IoT experience is unique because it isn’t just about a new technology, but how entire business models have to change because of the technology. Every member of the C-suite is at risk unless they make big changes in response to the demands of IoT.

Let’s take a look at how the IoT impacts each member of the C-suite.

Change, of course, starts at the top. For success in the IoT, CEOs must become more tech-savvy and collaborative. Transformative offerings like Uber and the customer service expectations of the digital economy are helping the CEO understand the changing expectations of their users. If they are not aware of how analytics applications like Mixpanel and KISSmetrics are going to impact the daily operations of their business, they need to get help from someone who does. Because of the complexity of the technology, and the integration and speed with which it changes, strategy must be more collaborative.

CEOs need to understand digital business models to make the investments necessary to compete.

With regard to accounting and revenue, CFOs must adapt to the new demands of the digital business models. CFOs must grow comfortable with the fact that their revenue is going to be determined by customers’ usage behavior, not operations and sales. Their forecasting ability will depend on how well the R&D and marketing teams work together to design products that drive adoption and avoid churn.

CFOs in an IoT world must develop new processes for accounting, forecasting, and valuation of both business and investments.

The real-time nature of IoT creates a great opportunity for chief marketing officers to leverage the need for real-time market data. Think about how often your favorite app changes on your iPhone. That is not just because they are fixing bugs but because they are tweaking their value propositions based on real-time market data derived from new analytics engines.

The IoT connects the marketing of the product to the delivery and experience. CMOs should incorporate the duties of a chief digital officer and be fluent in both IT and operations. Some are calling this new role the chief digital operations officer. Regardless of title, the CMO, CIO, and COO all have the opportunity to evolve and expand their roles to meet the additional responsibilities of a digital business.

Gartner has been advising its primary customers, CIOs, about the need for bi-modal functionality and flexibility, but the change needed is more radical than that. I think its reconsidering career paths. Information technology functions are evolving in to operational technology functions. As such, COO’s must be capable of facilitating IT decisions and step up their big data game. IT and traditional operation process functions are no longer C-level functions but will report to the leader of OT. In the same way IoT is forcing CEOs to become more tech savvy, the COO must become more digital tech savvy.

CIOs will lean on their CTOs to help them transfer new products and technology into operations. They must know both digital marketing and big data analytics to understand how to drive growth and avoid churn of their digital offerings. The race is on with the CMOs to own the responsibilities or become the CDOO that will gather or develop the domain knowledge necessary to move from big data gathering to big data analytics. The transformation from producing gross profit from selling products to gross profit from data analysis from the use of those products will be critical.

Ironically, the member of the C-suite we haven’t heard much about regarding the IoT is the CTO. I constantly see my peers under increasing pressure to adapt to this new technology space. However, the IoT has given CTOs the opportunity to take a more critical role in the success of their companies. CTOs can no longer focus solely on technology and engineering and avoid the day-to-day financials and market data of the business. The IoT is a seamless, integrated business model with a technology deployment. If CTOs do not understand the user from a revenue and costs standpoint they will not choose the appropriate technologies to create products that grow the business.

The IoT is no longer a technology discussion about how to make things talk to each other. Leaders of every company must rethink how their company goes to market and their role in leading and sustaining the transformation. Strong C-suites will leverage each other’s strengths and help each other grow to survive and flourish in the new world the IoT is creating.

Scott Nelson is executive vice president and CTO of Logic PD (

Edited by Ken Briodagh

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