Making a Leap in IT Digital Transformation ~ Future of CIO

Sunday, September 11, 2016

Making a Leap in IT Digital Transformation

10:14 PM Pearl Zhu No comments

Making a leap in digital transformation is not an overnight sensation, but take a systematic approach with step-wise practices.

More and more IT organizations are transforming from back end internal support functions into front office revenue generators, from reactive order takers to proactive changing organizations; from "doing more with less" to "doing more with innovation," and from IT-business alignment to IT-business engagement. They help their companies achieve strategic business goals and objectives in any way possible. To put simply, it is reaching the inflection point for many forward-thinking organizations for IT to make a leap in digital transformation.

Revenue growth: CIOs need to be business strategists and technological visionaries, and IT leadership has to be an integral part of top business leadership in driving business growth. It is about top-line business growth by maximizing ROI to add up overall business value in the second dimension. IT leaders can do so by integrating technology with strategy. Information executives have to be fully aligned with the business executives in articulating the business strategy. IT leaders need to encourage their teams to spend more time with leaders on the business side as well as directly with customers. These engagements are leading IT to be much more proactive in proposing - as opposed to responding to - ideas for new ways to improve customer service or actually create new customer value and revenue. When maintaining a clear and efficient bottom line for “keeping the lights on,” with enough forward thinking to 'plan in' growth, and this dimension allows the organization to use technology to pour more on the top line and catalyze the business grow with increasing speed.

Define, realize and measure multidimensional-IT value proposition: The business paradigm is shifting from the industrial era to an information-abundant digital era, technology plays a pivotal role in digital transformation, and therefore, IT value needs to reflect such a significant shift. Digital is the age of information abundance. Information value and intellectual capital cannot be underestimated. Digital is also the age of hyper-connectivity and interdependence. IT value-based management also needs to be driven by concepts like collaborative value or collective advantage and multi-layer ROIs. Generally speaking, IT value is demonstrated through the rate of productivity increases, the rate of new product development, the rate of market share gains, the rate of customer approval and satisfaction gains, the rate of sales gains, etc. The true value is created at the intersection of many disciplines. Different companies may have different definitions of IT value. In order to show value, first, all parties need to agree on the common value proposition, then, you need to be able to measure the right things and measure them in the right way.

IT manageability: IT is about using technology to lower costs, improve operations, and increase revenue. The focus of digital IT needs to provide business capabilities, not just services or solutions. Effective IT management means understanding every island of operation and every workflow process. It is through this comprehensive understanding that a CIO would be able to identify true cost savings, workflow optimizations, and additional revenue opportunities. IT is not a function that can be handled only inside the IT department or by IT managers, it takes a collective effort and cross-functional collaboration to run a holistic IT and improve IT overall manageability. Business expects IT to become new capability enablers at higher-change organizations that compete on product/service differentiation. There are best practices and next practices to create and reinforce IT brand, to advocate innovation and improve IT agility.

Making a leap in the digital transformation is not an overnight sensation, but takes a systematic approach with stepwise practices. A digital transformation is achieved via dynamic Strategy-Execution-Change life cycle management. Though it is not all linear steps, it's an iterative scenario with a clear vision and well-defined business goals, the effective decision-making scenarios, and scientific performance measurement.