19. Do you Need/Have a CIO (Chief [Profit] Information Officer)?

The “Digital Haves” (often startups) are eating companies who think “IT” is only about automating past activities to save costs.  For more on “Digital Haves”, find free on the net: McKinsey Global Institute’s report: Digital America: A Tale of the Haves and Have-Mores (published 12/15).

Amazon v. Traditional Distributors and Retailers

Amazon’s (AMZ) digital-invention already threatens all players in physical product channels.  Via “digitization”, AMZ has the best and lowest cost web interface, warehouse cost/pick, and 1-hour local delivery-cost per mile.  AMZ will underprice most popular, profitable SKUs and deliver them faster.

But, less visibly, AMZ is teaching next generation buyers to:

  • Do product learning and buying 24/7 on their mobile devices.
  • And, to avoid interacting with both inside and outside sales reps between 9 and 5.

Who is Your “Digital-Have Strategy” Champion?

Go to “Google Images” and search for “digital strategy”.  Who on your team is addressing Chief Profit Information Officerthe opportunities these “images” outline?

Don’t just copy “best, digital-capability practices”, however.  The costs will be high for unfocused benefits in the minds of your most profitable customers. Instead: enlist your most profitable, progressive customers to co-create specific web interface services that they value and will reward the most. (And, what digital, order-entry system and service/price terms will you create to convert unprofitable, small-customers with their small, gross-margin-dollar orders to profitability?)

Do you know who your most profitable and unprofitable customers and customer segments are? If not, then first get best, customer-profitability analytics. The new, revealed opportunities overwhelm most distributors’ current in-house skills.

CIOs have a three-step challenge:

  1. Get and master customer profitability analytics to then
  2. Digitally reinvent value for most-profitable customer segments and reduce service costs for un-profitable segments.
  3. And, finally consider new digital-value beyond Profit-Core Renewal.

Finding Your New CIO

Promoting from within or hiring from outside at a wage that fits your operating expense budget may not get enough talent.  Get someone with a track record of digital innovation or renewal. If their cost is “high”, see the premium as a forward investment. But, give your champion goals that justify your upfront investment in them.

Further Inform CIO Questions By:  

  1. Requesting a demo of the best, customer-profitability-analytics, web-service for distributors from Waypoint (waypointanalytics.net)
  2. Getting fluent and visionary with Cost-To-Serve Math (course offering at: iklarity.com)

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