In the past 12 months, pressure to drive Digital Transformation has reached a new milestone. Alongside with growth, becoming a digital business is now one of the top priorities for CIOs. In fact, our clients and prospects are telling us that one of the biggest concerns right now is figuring out how to increase business agility and drive Digital Transformation to create a sustainable, long-term competitive advantage.
This means companies must figure out how to increase the number, scope, and variety of digital transactions while boosting their ability to react to today's fast changing customer demands. And time is ticking: 33% of organizations already claim they have reached digital scale (significantly more compared to the 17% in 2018), according to Gartner's CIO's Agenda 2019 Report.
IT's Role In Driving Digital Transformation
With a massive business overhaul, like Digital Transformation, comes organization turmoil, process change, and potential risks. For example, businesses will have to re-engineer their business processes to be centered around the customer. Cybersecurity threats will only increase, and protecting any personal data collected, managed, and stored by your organization is crucial to maintaining customers' trust.
For many, this brings up a lot of questions. For example: How does IT fit in? What role does the CIO play in all this? Should IT be the leader or enabler of Digital Transformation? When looking at successfully run Digital Transformation initiatives, it quickly becomes clear that they have a few key points in common:
1. Successful Digital Transformation Is Business-Led, But IT-Enabled
While successful Digital Transformation efforts are almost always spear-headed by the business, they heavily rely on IT enablement. Therefore, it never has been more important for CIOs and IT teams to build relationships with their internal customers and stakeholders, and to communicate the value and possibilities that IT can bring to the table regarding achieving better digital scale and improving business agility.
2. Closer Collaboration Between IT & Business Units
It is essential that business units and IT organizations are working closer together than ever before. While enterprise IT teams have been somewhat isolated and even distanced in the past, they need to now learn to work with the business units in unison. Likewise, the business side must learn to perceive IT as a capable facilitator and equal partner in this relationship. This can only be successful if both sides strive to pursue common and formally defined, holistic business goals together.
3. Centralized & Agile IT-as-a-Service
Traditionally, business and IT haven't had the best relationship. Business criticized IT for its lack of transparency and accountability, its slow response times, and its standoffishness, while IT struggled with business units going rogue (Shadow IT) causing uncontrollable application sprawl and security vulnerabilities.
But an agile enterprise looking to thrive through innovation and digitization must be able to rely on a strong, quick, and flexible IT organization that is centrally managing all IT-related concerns, from which applications are allowed to be installed to which new technology advances the company's competitive advantages.
4. Re-Distribute Investments From "Keeping The Lights On" To Innovation
Still to this day, 71% of the IT budget is consumed by maintaining status quo or with so-called "Keeping The Lights On" (KTLO) activities, which makes it impossible to drive innovation enough to achieve these high-stake goals. IT and executive leadership will need to find ways to redistribute investments to minimize KTLO spending overtime and increase investments in potentially disruptive technologies.
5. Moving From Project-Based To Product Delivery
According to Gartner's CIO Agenda 2019 Report, 55% of organizations say they are moving from project-based initiatives to product delivery. Rather than having separate teams working on the same issue (e.g., product strategy, development, production, marketing, and support) with no real ownership and spotty communication and collaboration, companies need to rethink their organizational structure and processes to focus on what is best for the product or application.
Once IT moves to a product-centered management model, development cycles become faster, the end product is closer aligned with customer needs, and changes can made made faster. It also allows developers to get closer to the customers and see how their product impacts their lives and what improvements could be made.
6. Say Goodbye To Big-Bang Initiatives & Move Towards Evergreen IT
Technology is increasingly becoming more evergreen. Whether you look at enterprise grade operating systems (e.g., Windows-as-a-Service), communication infrastructure (e.g., Office 365 ProPlus or VoIP), or business applications (e.g., cloud-based ERP), everything is heading towards continual change through smaller yet constant, incremental updates.
However, the slow adoption of Windows 10 Servicing is a strong indication that enterprises struggle to keep up with this accelerated velocity of change. The reason for this isn't their unwillingness to change (although this might be the case in some organizations), but rather their inability.
Managing this fluid, constant change simply cannot be accomplished using traditional project management methods, like the Waterfall PM approach with its color-coded Gantt Charts. While some organizations already use agile or lean development methods for new development only, organizations need to strive for implementing a more agile Evergreen IT project management approach wherever possible.
Whether you are knee-deep into your Digital Transformation journey or you are just starting out, we hope you find this information above useful. While this all might seem overwhelming or even overkill, keep in mind that while you will have to go through this transition period over the next months or even few years, in the end you will be managing your IT estate continuously, your big-bang overhauls will be kept to a minimum.
Ultimately, you will focus on innovation and driving tangible business value rather than maintaining status quo and anxiously waiting for the next fire to put out. Those are worthwhile goals that allow you to turn this transition into a positive force for your organization.