The audio of the podcast can be found on the ThinkFWD website.

In the podcast Mark asked me to delve into the details of my Future of the CIO framework, shown below.

I discuss the driving forces shaping the environment, the shifts in the IT function, and the emerging new role for CIOs.

As I point out in the podcast, I believe that there is a growing divide in the roles of CIOs.

Some CIOs and IT functions are being marginalized as the business leaders come to believe that technology is a commodity and that technology functions should be performed increasingly efficiently, starving them of resources.

Other CIOs are leading their boards and executive teams in understanding the critical role of technology in their organizations’ future success, and playing a key role in shaping not just their strategies, but also the very nature and shape of the organization in a connected world.

The Chief Information Officer used to be a functional support role. Today and moving forward it is and must be a key leadership role in driving the future of their organizations.

The primary themes of the report were around spotting opportunities, innovation, transparency and trust, personalization, and 24/7 availability, and the implications for business.

One of the interesting insights from the study was on what executives believe their organizations can best do to foster innovation.

Source: EMC Information Generation

Top of the list was increasing co-operation between departments, recognizing the imperative of innovation across boundaries.

Fourth on the list was empowering staff to see a bigger picture, which is a pre-requisite for understanding the context that enables relevant innovation.

Another question looked at the major technologies that will impact how their organizations function over the next 5-10 years.

Source: EMC Information Generation

Big data analytics was probably rightly at the top of the list in terms of potential, though it is probably only a minority of companies that will truly tap that potential.

Automation will, in many industries, indeed substantially change the nature of work and the roles of employees.

I am not convinced that all of the executives’ responses represent an accurate reflection of the challenges and opportunities. For example getting employees to come up with more ideas will not drive the success of many organizations.

However the top responses to these two key questions absolutely point to fundamentally important issues that will drive the success of most large businesses in coming years.

APIDays was founded by Mehdi Medjaoui in Paris in 2013, has since been run in Barcelona, Berlin, San Francisco and now Sydney, with the event in Paris last year attracting 800 delegates.

Below are the slides for my keynote on The Flow of Innovation. As always, note that my slides are designed to support my presentation and not to stand alone, but still may be of interest to people who did not attend my keynote.

In my keynote I noted that in a world in which we are moving towards a truly fluid economy, driven partly by powerful twin technological and social trends towards openness, networks are at the heart of everything.

Business innovation can be applied across five domains: product or service, marketing, process, organization, and business model.

APIs can dramatically enable innovation in each of those five domains, and I gave a number of examples of each. However the most important impact is at the organizational and business model levels.

In my book Living Networks I wrote:

In today’s world of blurring boundaries and increasing ambiguity, organizations are nothing more than vehicles for creating and appropriating value. In a capitalist world, shareholders own the legal entity called the company. The managers of the company apply its financial and other resources — in combination with other organizations — to create value that end-customers are prepared to pay for. They also must negotiate terms of engagement with other companies so that they can extract a fair share of the value created by the firms working together. The key difference in thinking from previous conceptions of the organization is that value is created by the network, not by the organization. The art of management is now about positioning the firm to extract value from its participation in a broad economic network.

APIs are a means to open out the organization. They are a fundamental tool to enable value creation across organizational boundaries.

One of the reasons I loved being part of the APIDays conference is that everyone involved in APIs has an implicit understanding of the importance of transcending boundaries. These are not people who are perpetuating existing systems, they are enabling new structures for value creation and organizations.

Innovation has become a flow, and must be a flow.

There are critical strategic implications of APIs and of adopting more open and flexible configurations of organizations, that must be on the agenda of the board of directors. Governance must be undertaken an enabler of innovation and value creation as well as of risk control.

The potential is to drive innovation, growth, competitive advantage, and massive success.

One of the ideas I shared briefly was on how micro-payments between connected devices could enable an entirely new layer of the economy.

Payments between things
Imagine that the roads are populated by driverless cars. You might be in a hurry, and be prepared to pay a little each time another car makes way for yours to go past. Other car passengers may not be in such a hurry, and be happy to receive payments.

An agent system could be programmed with your parameters and entrusted to negotiate with other cars on whether it makes or receives payments.

Similarly, if our skies become filled with drones as deliveries take to the skies, these could negotiate priorities using micro-payments.

These examples reflect that in the ‘economy of individuals‘, many of us now receive payments as well as make payments.

In another domain, sensors could use agent models to find and pay for the lowest cost bandwidth given particular urgency for data. For example soil humidity and temperature measurement devices spread across farms may need low priority for small variations, but ask for high priority if there is danger of frost damage.

The cost of the fixed cost component of payments
However none of this is readily feasible with our current payment systems, which usually have a fixed price component, commonly in the order of 30 cents, as well as a variable component depending on the transaction amount.

Global payment systems are ripe for disruption, with one of many important drivers being the profusion of devices and potential transactions enabled by the Internet of Things.

That disruption could come from within existing payment systems, but many will seek to bring alternatives from outside. The reality is that the fixed component of payments has no relation to the true underlying cost of making the payment, it is a legacy of ancient systems and entrenched, self-reinforcing business models.

Lack of movement in existing systems could support greater use of Bitcoin and other crypt-currencies, which provide an essentially costless payment mechanism that bypasses current financial structures. There are other possible approaches, and there will undoubtedly be major platform plays in the payments space as technology companies such as Apple get involved.

The potential of machine-to-machine payments
What is clear is that there is an entirely new layer of the economy which could open up once payments with zero or extremely low (i.e. less than one cent) fixed costs are possible.

The potential is immense.

They played this video, narrated by John Hurt, who starred in the film 1984. Apparently American audiences have thought this clip to be highly controversial, however it seems to provide a reasonable view of how things are.

Take Back Control from Respect Network on Vimeo.

The real drawcard for me and many others was that Doc Searls, co-author of the seminal book The Cluetrain Manifesto and originator of the concept of Vendor Relationship Management (VRM), has been deeply involved in the project and is speaking at each of the 4 global launch events for Respect Network.

The vision of individuals controlling their own data was clearly articulated by John Hagel and Jeffrey Rayport in a 1997 Harvard Business Review article The Coming Battle for Customer Information. Yet despite many initiatives since then seeking to bring this to life, none has achieved widespread success.

The Respect Network seems to have a very solid foundation. Founder Drummond Reed has co-chaired the committees for the OASIS XDI protocol that underlies the protected sharing of identity and relationship data, though he emphasizes that the legal infrastructure of agreements is in fact an even more important enabler.

The focus of the Respect Network global launch has been the “Login with Respect” button, which seeks to provide an alternative to the Facebook and other social network logins which enables users to have complete control of their data.

There is a one-time fee to join the Respect Network of US$25. My initial response to this was that this will inevitably limit the uptake of the network. Today’s major social networks have memberships in the hundreds of millions or beyond. To provide an alternative where individuals can expect to find their family and friends means there should be no barriers to entry.

As a counterpoint, Drummond noted that for many, paying for a social network gives people confidence that they are not “the product” that pays for the business. Drummond also changed his language to describe the upfront payment as a ‘crowdfunding’ mechanism, suggesting that at a certain point the network may become free to join. This would be particularly important in allowing the network to reach beyond the developed world.

One of the initiative’s great strengths is its partner network of over 60 organizations, including two very interesting Australian-based platforms, Meeco, an app-based life management dashboard, and Flamingo, which “goes beyond crowd-sourcing and ideation by enabling customers to design the experience they want, beyond product and price, within parameters that the business can deliver”.

At this point it seems that the Respect Network has a better chance of succeeding in empowering individuals with their own data than any other initiative to date.

However one of the real questions is the proportion of people who care enough about their privacy to do something about it. The last couple of years, including not least Snowden’s revelations, have primed us to be far more receptive to the idea of protecting personal data than ever before. Yet it will require a significant critical mass of people to shift from their current online behaviors to help a broader group to follow suit.

I have signed up for my Respect name and I look forward to seeing what it will enable.

Perhaps we are ripe to turn the tables on the companies who are making us the subjects of their big data compilation, and take back control. If so that would be a critical juncture not just in the Internet, but in the relationship between companies and individuals. However it plays out, this space will be very important to follow in coming months and years.

Below are my slides translated into Spanish. I used these slides and presented in English with simultaneous translation. I was very pleased to get to Colombia and Peru on this trip as it helped me to begin to revive my rather rusty Spanish, but I’m still quite a way from being able to do a presentation in Spanish. I will work at it, and hopefully get more opportunities to get back to Latin America before long.

Many thanks to Rafael Rodriguez for the excellent translation and all his help for the conference!

More Spanish content coming soon…

The full transcript of the interview is available on our new publication CIO of the Future.

In response to a question on the impact of technology on organizational culture I said:

I have written before about how competitive differentiation occurs at the intersection of technology and culture.

This is critical to understand not just in IT strategy, but also in organizational strategy.

Organizations are not a set of business processes, they are primarily people who work not just alongside each other but together.

Technology doesn’t just help create the social enterprise. At its best it enables people to be themselves, to be more human, in how they work with each other and engage with customers and the broader ecosystem around them.

IT as pipes and processes is old and disappearing. The new era is of technology enabling humans and humanity.

The general theme of our publications is the future, or in some cases what we need to do today to be successful in the future.

The first of our new phase of publications is CIOoftheFuture.com, looking at where the Chief Information Officer role is going.

We are very fortunate to have Peter Evans-Greenwood as Editor of CIO of the Future. I first met Peter when we ran our Enterprise 2.0 Executive Forum in February 2008. Peter was a speaker at the event and involved as CTO for Cap Gemini, a Gold Sponsor for the conference. He has a fantastic reputation in the industry, with among other landmarks recently publishing the excellent book The New Instability.

The themes of the publication are actually centered not so much on the CIO per se, as on the leadership required to create value as technology moves to the center of work, business, and society.

This goes beyond the role of the CIO and encompasses other executive roles, and indeed the strategy and positioning of both private and public sector organizations.

Please come along, join in the conversation, and help us consider the future of enterprise technology. And if you have something valuable to add to the discussion, we’d love to feature your contribution.

Some of the points I make in the video are:

* One of the key capabilities of effective CIOs is an entrepreneurial mindset. Entrepreneurial activity accounts for an increasing proportion of economic activity. In a rapidly changing world CIOs need seize opportunies as they emerge, and where possible apply the lessons learned by the Lean Startup movement, in which development is done in extremely rapid evidence-based iterations.

* It is critical to engage – and often educate – senior executives on the role of technology and the emerging strategic possibilities.

* CIOs need to demonstrate that they can create superior value by facilitating better decisions, supporting organizational agility, building an extended enterprise, and applying insights about the future to organizational strategy.

* There is an increasing divergence in the technology role in organizations, with in some companies IT being marginalized as its value is not recognized, while in others technology moving to the very center of value creation. It is the responsibility of CIOs to show how technology can drive the future success of the organization.

Visual presentation tool Prezi can be a great way to do this, in showing the logic and structure of the framework through the presentation, while allowing me to zoom in through the presentation to illustrate the specific detailed concepts.

I have used Prezi in this way for keynotes on The Transformation of Business and The Transformation of Government.

For the current Tomorrow-Ready CIO series of events run by CIO Magazine and IBM I am using Prezi to run through my recently created Future of the CIO framework. The Prezi is below.

As for all of my visual presentations, note that it is designed to go with my keynote speech, and is NOT intended to be useful for people who have not attended the presentation. However even so, some may find it of interest or value.

I will provide explanations on this blog of some of the points in the framework and Prezi over coming weeks and months.