Monday, May 9, 2016

Three Perspectives to Differentiate a Transformational IT from a Transactional IT

A transaction is inside a box; a transformation might need work cross boxes.

Generally speaking, "transactional" refers to operational transactions, taking an input at one end and churning it out at the other with processes in between. "Transformational" means redesigning existing transactions to something new, being innovative and creative and also introducing completely new transactions hopefully with a strategy that serves the organization well. The pace of changes in IT would force more CIOs into transformation-oriented roles, creating business value is what is expected from CIOs. And, transactional running the systems is going to shrink with cloud and digital technology, once IT is seen as strategic rather than tactical, IT can be transformational when the opportunity arises and it is appropriate to seize it.

A transformation often needs to break down the outdated rules, and a transaction is following the rules: A transaction is inside a box; a transformation might need work cross boxes. A transformation focuses on goals of innovation, it would have to break down some old rules, and ‘best practice,” but follow the set of well-defined principles and develop a series of next practice to run a high performance digital IT.  After breaking the outdated rules, you are "outside the box." Thinking outside the box is all about "rule breaking"; the more "unruly" you are, the more creative you are. However, being "unruly" incurs risk, you need to set the updated rules for managing the innovation and mitigating the risks, just like shaping the new box to stay focus and achieve the value of creativity. Transformation is the more ambitious sounding term, in addition to the set point changing, transformation requires first shifting mindsets, and then, building new skills and reinforcing and embedding new practices/reflexes. We tend to need interpersonal transformation, then intra-personal transformation to achieve organizational transformation.

A transformation is a strategy, and a transaction is a tactic: IT can be just a service organization, provide commodity services, or they can identify where they can add extreme value to an organization, to the business, and to overall business leadership. A transaction is about how; a transformation is what and why. So IT's DNA may well transform to IV--Information Value. A transaction has a short-range view; a transformation has a long-range perspective, develop a shared vision, it's crucial to communicating valid and compelling reasons for cooperation, recognizing sacrifice and incremental success, measuring outcomes in a shared and mutually understood and agreed upon fashion, being able to declare an end-point and successful conclusion -- at least of a major phase -- without being disingenuous, examining what went well and what could be done better next time, etc.

A transaction focuses on “keeping the lights on,” while the transformation is the quantum leapfrogging: Information is the lifeblood and foundation of any business today. If transactional IT may limit its imagination to focus on the bottom line, then the transformation is a mission for IT to improve business/customer intimacy and embrace digitalization. IT customers (the business units) are looking for strategic business partners that have a bird-eye view of all the business processes due to the system and landscape knowledge IT has maintained over the years; or with good operational knowledge of the entire business combined with advanced systems and architectural knowledge. The more intimate IT can be with the business needs, the faster IT can move up the ladder to a business partner, then business peer, and maybe even a business leader.

IT needs to both reboot mindset and retool management discipline, more proactively anticipate business value delivery through knowledge of information technology, also becomes the business’s strategic partner. Further, the CIO role needs to shift from a transactional manager to a transformational leader, it takes thought leadership, transcendent wisdom, and trans-disciplinary skill. Until then, the rest of the business will feel that if the transactional CIO is talking it's because there are problems, not opportunities, and won't want to listen. A transformational CIO is innovative, Influential, and intellectual to think and act as a digital master.


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