CHICAGO — A recent survey by the Economist Intelligence Unit (EIU) suggests CIOs should be driving digital transformation strategies across organizations.
But are they?
Over the three days of CMSWire's DX Summit at the Radisson Blu Aqua here, one theme became very clear. The numerous vendors, analysts, practitioners and vendors attending the summit underscored the reality that digital transformation has different faces, many motivations and is the responsibility of a wide range of people, from the top executives to lower-level workers.
The EIU survey, sponsored by SAP, was based on responses from 800 business and IT leaders across Europe, North America, Latin America and Asia-Pacific. It found:
37 percent say the CIO is the most likely executive to take ownership of digital transformation
CEOs (20 percent) and chief operating officers (15 percent) are also likely owners
16 percent say digital transformation is not owned by one individual member of the C-suite
29 percent report digital initiatives are led by individual business units
24 percent say digital initiatives are led by a dedicated digital unit
22 percent say digital initiatives are led by IT
To try and tease out what exactly is happening, we canvassed several digital transformation experts during the DX Summit to find out what they think and what is required to initiate digital transformation initiatives:
The Question
How should companies implement organization-wide digital transformation strategies?
The Answers
Sheryl Kingstone, Research Director, 451 Research
Sheryl KingstoneResearch Director Sheryl Kingstone focuses on improving the customer experience across all interaction channels for customer acquisition and loyalty. She helps operator and enterprise clients make decisions regarding the use of technology, business processes and data to boost revenue and optimize business performance. Tweet to Sheryl Kingstone.
CIO’s must play a critical role for moving the company forward creating a digital transformation strategy. However, it should be driven also from the business including sales, service and marketing executives. The power of a digital transformation strategy lies in executive leadership driving its vision and objectives. Digital transformation may start around creating the ideal experience for customers, but it quickly expands throughout all departments.
451 Research defines digital transformation as the result of IT innovation that is aligned with, and driven by, a well-planned business strategy with the goal of transforming how organizations:
Serve customers, employees and partners
Support continuous improvement in business operations
Disrupt existing businesses and markets
Invent new businesses and business models
Less than 25 percent of companies have a formal strategy for digitizing their businesses. Roughly half do not have a strategy at all. Less digitally mature organizations tend to focus on individual technologies and have strategies that are tactical and operational in focus, as compared to more forward-thinking companies that embrace digital with an eye toward transforming their businesses.
Strong leadership with a disruptive attitude is necessary to guide an organization through rapid changes in technology, customer behaviors and business models. It is a journey that forces a company to move beyond business as usual to embrace organizational change, agile business processes and systems to support transformation.
Anna Murray, CEO, TMG eMedia
Anna MurrayAnna Murray, author of The Complete Software Project Manager, is a nationally recognized technology consultant, speaker and blogger. She is President of TMG eMedia, a provider of software development, high-level technology consulting and project and program management. She is a double winner of the Stevie Award for Women in Business, a recipient of a Mobile Marketing Association award for mobile app development and Folio’s Top Women in Media award. Tweet to Anna Murray.
Despite recent recommendations that the CIO should be the one to lead organization-wide digital transformation, this approach can be problematic. Often, organizations regard those with technical expertise as shaman-like figures. Shamans, we know from anthropology, are individuals who have a special connection to a mystical other world.
You, the average person, can’t speak to that mystical other world. You must go through the shaman. Some technologists, CIOs and others, encourage the view of technology as mystical and of technologists as shamans. Unfortunately, business people, who like the Silicone-Valley fantasy of technology, also promote this idea.
Business stakeholders must step forward and own technology decisions and digital transformation, not overly rely on technologists. Here’s an analogy. If you, heaven forbid, had a brain tumor, you would learn everything possible about neurology and your condition. You would not simply hand off the decision of your treatment to the neurosurgeon. Why? Because it’s your head. All too often, business people act as if they can’t possibly understand the complexities of technology, and therefore pass the key business decisions to the “experts.”
Who’s best to lead an organization-wide digital transformation? It’s not about CIO or CMO. Picture an effective international diplomat, a listener, a negotiator, a common-ground finder. An international diplomat knows he or she can’t “force” decisions or processes. Why? Because a diplomat deals with various sovereign nations. Arm twisting never works anyway.
Who is most like this international diplomat on your leadership team? He or she is your top candidate to lead your digital transformation efforts. That person can put together a cross-functional governance group, a Steering Committee, which will own the key decisions. The Steering Committee will seek input and get the buy in from the broader business.
The Digital Transformation Steering Committee, ideally, will make sure to include a robust company-wide communication program, road shows and the like, to make sure the broader business continues to feel included throughout the process and that “buy in” is not an afterthought to your technology roll-out.
Natalie Petouhoff, VP and Principal Analyst, Constellation Research
Natalie PetouhoffNatalie Petouhoff, VP and Principal Analyst at Constellation Research, is the author of four business books on customer service, customer relationship management (CRM) and contact centers as well as author of dozens of articles, white papers and research. She is a keynote speaker and researcher in all customer-facing applications, including Social, Mobile, Digital, Listening and Monitoring, Marketing, Commerce, Customer Experience of IoT, Customer Care, Customer Service and Contact Centers. Tweet to Natalie Petouhoff.
Get IT and CX in the same room and share the top five key performance indicators (KPIs) each measure. Those KPIs are not likely the same. So combine those now 10 KPIs and then redesign not only the customer journey mapping but also the infrastructure that supports the CX omnichannel software and test both.
You also need to constantly ask your customers how are you doing and what would be better if you took certain action and what those actions should be.
Driven by the Consumerization of IT (CoIT), a new generation of heightened customer expectations requires brands to incorporate customer experience into their business models.
Many digital business or chief customer experience (CX) executives realize they need to deliver quality experiences but are not familiar with the technology infrastructure and software monitoring and measurement process used by IT to create great customer experiences. CX executives tend to focus on making the website or mobile application work, not necessarily on introducing performance metrics at the software and the technology infrastructure levels that affect customer experience.
However, there are organizations that use both business and technical metrics to monitor and measure the digital customer experience to improve customer retention, client loyalty, customer lifetime values, revenue, profits and margins.
Brian Solis, Principal Analyst, Altimeter, a Prophet Company
Brian SolisBrian Solis is principal analyst at Altimeter, a Prophet company. Solis studies the effects of disruptive technology on business and society. A digital strategist, futurist and author of many books on the future of business, he is a regular contributor to business and industry publications including Advertising Age, Forbes, Wired, VentureBeat, among others. CRM Magazine named Brian as an influential leader of 2010 and was the recipient of an Authority of the Year award by SoftwareAdvice in 2011.
Ask an enterprise technology vendor who should own digital transformation, and they will say the CIO. Ask a MarTech or AdTech vendor, and they will say that the CMO should drive digital transformation. In my latest State of Digital Transformation research in which we surveyed executives worldwide, I learned that CMOs were most often leading efforts whether by intention or default over their CIO counterparts (34 percent versus 19 percent respectively).
The real answer is that no one person should own digital transformation, except perhaps the CEO from an accountability stand point.
After years of getting inside companies to understand how they invest (or don’t) in change, I can’t be clear enough, digital transformation is bigger than any one group. IT, marketing, sales, service, HR, are each affected by the external and internal forces that are forcing change. Led in isolation, digital transformation becomes narrow in its impact and promise.
As companies mature, in what I mapped out as six states of digital transformation, successful companies align efforts through a cross-functional steering committee. Cross-functional steering committees are tasked specifically with solving for digital transformation at an enterprise level. Marketing, IT, CX, HR, legal, etc., mix and unite to carry an impact beyond any one silo. More than half (53 percent) of companies have an informal digital transformation steering committee that includes representatives from one or more departments. And, 40 percent of these companies have formally sanctioned committees as official working groups.
These efforts create more agile companies beyond technology to also include new perspectives, decision-making, pilots, and changes in customer/employee experience, supply chain and overall innovation.
One of the things I truly appreciate is the term “transformation,” which basically means a thorough or dramatic change in form. If you’re not going to look beyond technology, you’re not transforming. At best, you’re iterating, doing the same things better.
That’s “digital iteration.” Digital transformation though is far more sweeping. It is as much a story about technology as it is about how technology is changing people and their behaviors, preferences and values. That makes it an enterprise-wide C-level imperative that requires a human-centered all hands-on deck approach.
David is a full-time journalist based in Paris, who spends his time working between Ireland, the UK and France. A partisan of ‘green’ living and conservation, he is particularly interested in information managementand how enterprise content management, analytics, big data and cloud computing impact on it. Connect with David Roe:
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