Let's rise and offer a toast to Augusta Ada King,1 the Countess of Lovelace. More commonly known as "Ada Lovelace," the brilliant English mathematician is credited with creating a computer algorithm to power Dr. Charles Babbage's "Analytical Engine."
Two centuries later, computer code — famously framed by MIT professor Nicholas Negroponte's 1995 best-selling book Being Digital — is embedded in all aspects of our personal and business lives. Yet, few chief information officers or senior IT executives are empowered to do much about this development. The reason: only 10% of senior business leaders perceive IT to be a "business game-changer."2 As such, most companies are unable to "compete on code," a development that in many ways is driving the most significant transformation of business since Adam Smith's 1776 manifesto, The Wealth of Nations.
More on this later.
Big Data Everywhere, But Not an Ounce of Insight
Today's technology fashionistas have a saying (a misnomer in my opinion) for colossal quantities of computer code generated by modern-day business applications. They call it "big data," often partnering the phrase with exotic-sounding names like zettabytes, yottabytes and brontobytes. But although "big data" is a big deal, it is only the first step in the digital transformation of business.
This finding became abundantly clear earlier this year after I delivered a keynote address to IT professionals on big data. That morning's edition of The Wall Street Journal contained an article on the concept of "thick data," arguing that "… what big data cannot explain is why we do what we do." Thick data, on the other hand, offers insights into "the emotional, even visceral context in which people encounter a product or service," according to the article.3
My takeaway: Thick data, rich in meaning and insight, is much more important than big data. Quality beats quantity any day, in my view. So, I quickly incorporated a slide about "thick data" into my presentation. Interestingly, not one question during the Q&A related to big data; every inquiry touched on thick data. Making meaning of thick data was clearly important to my audience.
Flying home, I recalled the concept of Code Halos pioneered by Cognizant's Center for the Future of Work. A Code Halo refers to "the data that accumulates around people, devices and organizations — data that's robust, powerful and continually growing in richness and complexity."4 In my mind, Code Halos offer a palpable metaphor for thick data. Furthermore, the challenge of taming and making sense of thick data seems to be squarely fixed in the crosshairs of the CIO's organization.
However, as I noted earlier, only a small percentage of senior leaders believe IT is "game-changing." At the same time, paradoxically, many of these execs say that "technology factors" are their number-one consideration when making key strategic decisions. How could that be? I think, in part, it is because most companies just "accumulate" big data to inform decision-making and few truly attempt to extract qualitative and contextual insights from thick data.
The Business-IT Divide: No Longer an Excuse
But it doesn't have to be this way — if companies empower CIOs and their teams to transform the business by competing on code. For starters, a Code Halo-informed game plan for digital business transformation assumes a tight alignment of the business and IT strategies. This is something that winning companies figured out long ago.
Several years ago, CIO Magazine presented its prestigious "Enterprise Value" award to the Marriott Corp. After accepting the award, I invited John Marriott, the company's executive vice president, to share his thoughts with the audience. What he said shocked me. "The Marriott Corporation is proud to receive this technology award," he began, but then added: "… the firm doesn't have a technology strategy. We used to have disparate technology and business strategies. That didn't work, so we aligned the two. That didn't work either until we converged our technology strategy into our business strategy."
Though it was well before the term Code Halos was in vogue, Marriott's winning application exemplified the best of Code Halo thinking. It used customer code to enhance the design and implementation of its algorithms for customer affinity and room rate optimization, which helped the company continuously strengthen its bottom line.
As this story shows, companies that understand the context of their data and their customers' Code Halos are destined to outperform those that do not. At companies with Code Halo strategies, the wall between IT and business does not exist. As Cognizant's book on Code Halos points out, CIOs and IT staffs at companies that apply Code Halo thinking invest almost twice as much time deeply understanding user interfaces, applications and data as companies without Code Halo strategies. Companies with Code Halo strategies spend twice their IT budget funding innovation rather than infrastructure.5
Companies that apply Code Halo thinking ask why a customer or employee acts one way rather than another — and then find answers by examining connections among personal, organizational and device Code Halos. And who better than CIOs and their teams — deeply steeped in information architecture and data analysis — to inform end-to-end digital business makeovers?
Making the Code Halo Pivot
The Code Halo revolution will disrupt businesses for years to come and it's an uprising best led by CIOs and their teams. Why? Because it is all about digital information-led business change and it is IT that has been at the vanguard of technology- and data-powered transformation since the beginning of digital time. It's a no-brainer: It just means further embedding IT into functional business areas to — in John Marriott's words — erase the divide that has confounded enterprises since the emergence of electronic data processing (EDP).
To succeed, CIOs must think beyond accumulating big data. Rather than getting caught up in zettabytes, yottabytes and brontobytes, they must restructure and reskill their teams to connect the digital dots spewed by people, process, organization and device Code Halos. This means equipping the business with solid information architects and deep-thinking business analysts who see patterns contained in rich data mosaics and can predict the direction of market and customer sentiment before the competition does.
CIOs who see the "why" of data will become Code Halo heroes to their organizations. They will also generate more zeros for themselves and their companies — lots of them!
1 Ada Lovelace biography, http://www.biography.com/people/ada-lovelace-20825323
2 "State of the CIO Report," CIO Magazine, January 2014, http://www.cio.com/article/2380234/cio-role/state-of-the-cio-2014-the-great-schism.html.
3 Christian Madsbjerg and Mikkel B. Rasmussen, "The Power of 'Thick' Data," The Wall Street Journal, March 21, 2014, https://www.wsj.com/articles/the-power-of-thick-data-1395443491
4 Excerpted from Chapter 11 of Code Halos: How the Digital Lives of People, Things and Organizations Are Changing the Rules of Business, by Malcolm Frank, Paul Roehrig and Ben Pring, published by Wiley, April 2014.
5 Excerpted from Chapter 11 of Code Halos: How the Digital Lives of People, Things and Organizations Are Changing the Rules of Business.
Gary Beach is the Publisher Emeritus of CIO Magazine. He is also a guest columnist for The Wall Street Journal and is author of the best-selling book "The U.S. Technology Skills Gap." He can be reached at Garybeachcio@gmail.com and on Twitter @gbeachcio.