To write a post on a trending topic, one would typically start with a definition, but in this case, “Digital Transformation” means different things to different people. From the Bennet Frank survey, CIOs’ Perspectives on Digital Transformations, industry analysts, and our own client engagements, we have heard the term used to describe anything from consolidating ERP systems to accepting bitcoin payments. You could attend an IT conference and listen to three Digital Transformation sessions that give contradictory advice. Practitioners in the trenches can easily get confused and overwhelmed.
So let’s break down the key components of a Digital Transformation into a systematic approach to help you focus your efforts and align expectations with top management.
The CFO Leadership Council recently hosted its 9th annual national conference in Boston. Andrey Alekseyev and I were fortunate enough to be in attendance for the first time. Over 400 senior financial executives gathered in Boston, MA for two days to discuss and dig deep into the complexities of being a modern CFO. In case you missed it, we took notes. Below are our key takeaways and summaries of a few memorable sessions.
As you would expect, CFOs are focused on the staples of financial success—namely, ROI and outcomes. But the modern CFO is also concerned with far more than just the finance function of their organization. Today’s CFOs are invested in digital transformation and what technology can do for their business across the entire organization. In a way, this strategic shift has revolutionized the role of forward-looking CFO.
Agreeing on a mission statement is a healthy, worthwhile exercise for any organization or department. IT is no exception. The IT mission is a clear expression of the department’s self-perception and shared purpose.
As we forge ahead in the digital age, IT departments are starting to make up the majority of most organizations’ investment, operations, and risk. Thus, the term “IT is the business” has taken hold. Therefore, the further along your organization overall is on its digital journey, the more the IT mission should resemble the overall organization’s mission. In fact, taken to its logical extreme, the best practice would be to repeat the organization’s mission as IT’s mission.
A Black-and-White Prioritization Process: Quick and Uncomplicated
First, a common definition of success: IT initiative prioritization is a mechanism to calendarize and budgetize investments in IT, which is agreed upon by all stakeholders. This is a stretch goal for most organizations. In fact, some may argue that achieving a consensus among all stakeholders is not possible. But the only way to increase IT’s effectiveness is to drive consensus on how to use limited resources to achieve the most critical outcomes.
When someone’s job description is “firefighter,” you know exactly how they can help you. If your house is on fire, they will put it out. We don’t call a firefighter a “long hose operator.” That may be technically accurate, but incomplete and unclear to those of us outside the fire station.
Naming conventions based on consumption make so much more sense than those based on operational or technical specs.
IT professionals want to be recognized for creating business value. Yet too often they are referred to as people who merely provide technology. It’s frustrating. To understand the disconnect, consider how IT professionals talk about themselves and their projects. Common IT titles include software development lead, SAP project manager, or something else referencing their specialty. A lot of project names I see include “cloud migration,” “system integration,” or “upgrade.” If you verbalize what you do through technology, you will be perceived as a technology-centered person.
IT often has a complex from being considered a non-strategic business unit, or a necessary evil. In response, many IT professionals try to prove the cynics wrong. They think, “We’ll show them….”, and put a lot of pressure on themselves to come up with game-changing ideas. This overcompensating mindset within IT is counterproductive.
Every time I attend an IT conference I visit technology vendors’ booths. Vendors have gotten really elaborate with their sales techniques. Many offer ROI templates or business case building tools to help IT professionals demonstrate the value of purchasing one product or another. These vendors are enabling the exact behavior that is so self-detrimental.
Let’s admit it: ideas born in IT have little chance of securing participation from the business, let alone budget for developing a prototype. IT-generated innovations don’t get much support because they tend to be technology-based.
First of all, if you are an IT manager or executive and have asked for money to fund a project, you are brave. Too many folks in IT are order-takers. So, hats off to those valiant IT leaders who create business cases for IT initiatives, and present justifications for investments.
However, there is an inherent issue with “asking for money.” It’s as uncomfortable for the asker as it is for the askee. It is almost like you are asking to borrow money with a promise to repay with interest if everything works out.
What’s worse, a pattern of asking for money widens the gap between the business and IT. It doesn’t need to be like this.
We believe the only way for an IT governance function to affect the execution of a strategy is to cascade the governance function. When middle management from IT and the business participate in governance, great things happen.
Bureaucratic, static IT governance models of the past no longer work in organizations where the IT function is to enable business innovation and customer engagement. For IT governance models to be effective in today’s evolving marketplace, they must be more closely linked with business governance.
What concrete benefits and tangible value are you receiving today from your IT governance processes?
What are the root causes that lead some project teams to operate well, while others struggle? Underperforming project teams may result from a weak change management plan, lack of talent on the project team, or insufficient stakeholder support, among other factors.
In my view, all of these issues boil down to poor alignment.