Digital transformation comes up frequently in the conversations I have with CIOs. And what I've heard, time and again, is that they need to resolve the challenges associated with managing people and processes before digital transformation can ever succeed. However, once you have the management piece in place, what issues will CIOs face? This was the question I posed to the CIOChat last week.
When You Get Beyond People and Processes, What Holds Organizations Back?
Initially, no one wanted to answer the question. Brian Baute, CIO at Queens University, summarized the reaction of most, “this feels a little like saying other than nutrition and exercise what’s holding you back from being in better shape?” However, other concrete things also hold organizations back in digital transformation, such as:
- Technical debt.
- An aging digital foundation.
- Historical underinvestment.
- Treating IT as a cost center.
- No platform.
The most important item on this list is technical debt. Ken LeBlanc, former CIO of Iron Mountain, said, “Tech debt, tech sprawl and messy/complex integrations are the Achilles heel of transformation.” With cloud and SaaS spreading, fragmenting and siloed enterprise data, information architecture and master data oversight is critical to being faster at digital transformation. Another issue, Tim McBreen, former CTO of Kemper Insurance, said, “is the inability to establish a digital vision and strategy with the board and the extended leadership team. These folks are needed because transformation often requires business model change.” Where there is an unwillingness to change the business model, transformation will be stifled.
Related Article: The Elephant in the Digital Transformation Room: The Long Tail of Legacy Tech
Should the CIOs Pivot to Business Co-Creator or Change Instigator?
Alignment with stakeholders is essential. And while in an ideal world, stakeholders would come to IT with their problems, this will not always be the case. Moving to a product management approach can help make IT more relevant.
According to Raechelle Clemmons, former CIO of Texas Woman’s University and current VP of Industry Relations at The Tambellini Group, “It is good to move from a focus of systems and ITSM services to business use and value.” With this approach, CIOs must define vision and identify possibilities, assemble talent and support, curate innovation and create processes reviews with regular milestones.
In the digital era, CIOs should be business leaders who happen to lead technology. For this reason, the CIO needs to pivot to business co-creator and change instigator. This means refocusing upon business growth, customer experience and digital products and services as opposed to focusing on process efficiency and cost reduction.
To be fair, CIOs can play a key transformational role, but if the organization and/or leadership don't get transformation, it will be hard for CIOs to lead. On the other hand, transformation does not happen where CIOs are focused on infrastructure, servers, line of business systems, and largely take orders from the rest of the organizations.
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What Steps Should Businesses Take to Begin?
If an organization hasn't yet digitalized core business capabilities, the CIO should start by making sure its infrastructure and architecture is ready for transformation. Even where the business doesn't see the value of digital yet, it will eventually. CIOs should find the one capability (customer pain point) to start with by:
- Preparing themselves.
- Forming vision and strategy with the business.
- Recasting the business using digital art-of-the-possible.
- Understanding the business and people leading it.
- Building a business strategy where there isn’t one.
- Assessing and closing talent gaps.
- Decentralizing agile projects.
- Benchmarking against top peers.
It can be good to establish a divide and conquer model to get quick wins. But at some point, quick wins aren’t enough. The core business processes must be tackled. If new to the organization, CIOs should show the ROI from digitization and build a plan with your operating partners to improve. If CIOs have been there a while and nothing has changed, they may be in the wrong place.
Related Article: 5 Lessons From Digital Transformation Pioneers
Is Data the Fuel of Digital Transformation?
Everything starts by deciding to capture what matters. This involves finding people ready to roll up their sleeves and figure out the questions to drive analysis and the current state of data quality. Common data problems include the following:
- Collecting too much data without a plan.
- Collecting data without informed consent and creating an easy way to opt out.
- Poor, inconsistent data without validation or cleaning.
Enterprises, as a part of digital transformation, need to start by governing data and understanding future requirements for data. The data problems that kill reliability need to be addressed early. Remember: bad decisions will be the inevitable result if analytics is based on faulty data. CIOs should aim to fix the integrity, cleanliness and access to data. As well, they should put in place data standards, guidelines, data dictionaries and a glossary. At the same time, CIOs should create data integration between systems that have a clear single source of truth for each piece of data. The aim should be timely and easy-to-use reporting and analytics on the integrated data. To make this happen, CIOs need to take the following steps with data:
- Unsilo it.
- Make it accessible.
- Abolish local ownership of data.
- Create the essential 360 views (customer, supplier, etc.).
- Open up with microservices.
- Make data traceable.
- Govern data.
Jay Brodsky, American Geophysical Union chief digital officer (CDO), said, “The data problems that kill reliability need to be addressed at the top. Care must be given to delivering analytics based on solid data, lest bad decisions be made based on bad data. You don’t want to spoil the effort from the start.” With these things fixed, David Seidl, VP for IT and CIO at Miami University said, “It is important to establish a data culture, but this depends on the state of data governance.”
Related Article: Data Ingestion Best Practices
Start Your Digital Transformation Journey
It seems clear that digital transformation starts by dealing with technical debt and ends by creating a vision and implementing it. When these things are accomplished and trustworthy data is acquired, it is possible to realize the digital future.
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