Thaddeus Arroyo, president of technology development at AT&T, believes IT leaders must show their organizations how technology will transform both how they do business and how they engage with customers.
"Today's technology thought leaders," he says, "are guiding and informing business strategy, not just enabling it." That kind of thinking, along with his leadership skills and strategic vision, earned Arroyo the 2014 MIT Sloan CIO Leadership Award. Arroyo, who oversees about 15,000 IT employees and 10,000 contractors, shares his ideas on being a CIO.
Does your CIO position focus on internal as well as external users? My role definitely includes both internal and external components. I oversee systems supporting all the AT&T business segments, which includes servicing consumers and small, midsize and large businesses, and I'm responsible for global compute and services. And in addition to directing the internal information technology organization, I'm also responsible for external hosting data centers, and for all of AT&T's digital properties across all business segments.
Those digital properties are run by my team. For example, if you walk into the retail store, we develop the point-of-sale system and all the tools they're using. If you're using the AT&T app, our team does the development for that. My team does the digital experience design and works with the businesses to drive the customers into these digital properties.
You talk about the transformation of your digital perspective by 2020. Can you expand on that? It's finding a way to meet our customers in new places, and it's critically important. Customers expect to be served on their terms, and they're increasingly demanding to interact with us in ways that meet their immediate expectations.
So as we move into this era where customers and things are connected and constantly online, and I frame up our perspective by 2020, it's looking at how we evolve beyond e-commerce and self-service to create new business designs in ways that blur the digital and physical worlds. I support the technology that supports the physical side -- the call centers and retail stores -- and if you're engaging with us through a digital channel. So what we're striving for by 2020 is to capture, integrate and interpret data in a way that directly impacts the customer experience. They shouldn't have to tell us what we already know. We want to extend this intelligence to the physical and digital boundaries.
Tell me more about the new chief digital officer position that reports to you. We set our goal to move 80% of our customer interactions to digital channels by 2020, and we had to look at what it would take to really do that. To elevate this focus and to deliver consistent experiences, we appointed the chief digital officer and created a team. [The position's] chief action is to enable this effortless digital experience.
The three [terms that define] our digital DNA now are simple, empowered and immediate. It wasn't that we weren't doing it [before this position was created]. But when we wanted to elevate that, we had to bring a set of capabilities, so rather than doing digital as an afterthought, we create these digital experiences and make it digital first by design.
You talk about effortless experiences in the digital realm. Is it possible to give effortless experiences in the physical world, too? I don't think we can abandon the role we serve in delivering digital technologies to the human channels. We need to expand these same digital capabilities.
That insight I bring to the digital experience I have to bring to my sales representatives, so that insight of understanding what you [the customer] need and what you want, I have to extend those tools. It's also important as customers interact with our physical channels that those physical channels understand the digital experience we have so we can help our customers. We take time as they interact with us in the physical channel to show how easy it is for them to interact with us digitally.
Why, in this digital age, is the physical channel still important for the CIO? If you look at a retail store in a 2020 world, people still come in and they want to experience your brand. That's still a very relevant interaction. And there's still a set of complicated support issues that have to be handled by a higher-tier support that we can't digitize. So that's kind of what you're teeing up. And there are still customers who may be more comfortable with the physical interaction.
You've been recognized as a thought leader. How do you define that role, and how do you demonstrate that in your daily job? Technology advancements are changing how business does business. And the ability to transform business is forcing us to think differently about our products and services, how we operate our business and how we enhance customer experiences.
So it's [asking], How do these [technology advancements] need to be impacting our products and services? How should they change how we operate our business? And in what way should we be tapping into these to enhance our customer experiences? Those who tap into these can operate at a significant advantage. For me, that's what drives the engagement that I have with my peers across AT&T, and it's driving energy and excitement around the potential.
How do you foster creativity in your IT staff? For me, it starts with a simple concept of making sure that we change how we think. We're guided by this question: If we were starting from scratch, how would we want it to work? Our teams are coached to think that way, to think about new workflows and about how do we really want this to work.
So we start by changing our thinking in how you approach a problem, and we have numerous programs and methods we wrap around our employees to foster innovation. For example, we have TIP -- the technology innovation pipeline. Think of this as the ultimate employee suggestion box. This allows them to post their ideas, then employees vote the ideas up and down, and those with the highest-rated ideas each quarter can pitch their ideas to senior leaders.
Personally, I don't want people to limit their visions to what I think is possible. So I look for people throughout the organizations to bring great new ideas to the table, and we're giving those a chance to flourish.
What's your approach for getting innovation off the drawing boards and into reality? For me, execution is one of the most important areas. At the core of our approach is the culture of prototype, assess, iterate, build and scale. That really helps us drive execution. That's really important as we develop technology today. From a crowdsource engine that allows employees to vote, to experiential-based methodologies, to a proof-of-concept engine. We've instituted these practices that made innovation part of the DNA as well as the ability to realize that innovation. More than 50% of our IT projects are completed within six months, and the rest within a year. Very few go beyond a year.
You talk a lot about transformation. How do you address process change as you use technology to transform? When it comes to creating a culture that manages change, it's not about discovering the next big things; it's about identifying and acting on the opportunities to use the big things.
I'll give you a deeper dive here: All of our store representatives are equipped with mobile tablets that connect them with relevant information about customers and recommended solutions to their needs and concerns; it's all tailored to that customer. That's tapping into that next big thing. The representative can complete that sale without leaving the customer's side. We no longer have behind-the-counter registers.
Our approach is to constantly evolve our IT strategy to take advantage of the next big thing. Since 2007, when I came into the job I do today, we've eliminated over 50% of our application portfolio, and by 2020 we'll eliminate another 40%. It's taking complexity out and allowing us to move even faster.
And we're not stopping there. We're changing the way we develop our technology. We've been evolving the way we develop, putting in more agile tools. We're driving that to new levels.