Sunday, October 9, 2016

"CIO Master" Book Tuning #116: Three Payoffs of IT Digital Transformation

The payoff of IT digital transformation is not just for the quick win, but to build the long-term business competency.

IT is impacting every business function, permeating everywhere in the business, and is becoming the driver of business change. However, most of the IT organizations get stuck at the lower level of maturity, react to business changes. And most of IT organizations still measure IT via system performance from IT operational lenses, evaluate IT projects on budget and on time, or IT department cost commitment, without sufficient consideration of multidimensional values IT could bring. How can IT reinvent itself as a value created business partner, and what are payoffs of IT digital transformation and how to measure IT performance via the true value IT delivers to the business and through the lenses of customer satisfaction?
Organizational responsiveness: Digital IT should be run as a changing organization, to break down silos and keep the business flow via the mosaic digital technologies. People normally 'close' the boundaries of the system, so that less energy is transferred and, therefore, the fewer changes happen in the system, due to the fear of stepping out of the “comfort zone.” For the area of responsiveness and technology, the most important questions CIOs can ask their business partners are: Are there any tools your competitors apply that you need to look at? Are your tools simple to use to improve productivity? These questions help show a willingness to engage people outside of IT on how best to solve a problem, or achieve an opportunity. Engage all employees in improving their processes, and create the expectation that positive behaviors and mutual respect are valued above everything else. The payoff of IT digital transformation is about how IT will enable business agility, how fast IT will deliver the required business capabilities effectively and efficiently. The more alignment between business and IT the more level of agility for both will be achieved. The challenge and direction now are to bring agility holistically to the entire business.

Information fluency: Digital is the age of insight. Information is structured and presents facts in context to targeted situations and conditions that facilitate business in making the right decisions at the right time. Given this assertion, there is no limit to the value of information in the digital economy. At the age of IT consumerization and customer-centricity, businesses need to understand not only the power and the opportunity information could bring in, but also the potential risks they might get exposed to. IT plays an important role in interpreting business issues into a technology solution, also, leverage necessary resources to solve them. The payoff of IT digital transformation is to keep information flow, capture the business foresight and customer insight timely for grasping the emergent opportunities to grow businesses and delight customers. The digital ecosystem is complex and volatile, for complex problem solving, understanding context is often the first and the important step in understanding, create the relevant context to make a more lasting solution - without it, you are working without any boundaries, or basis for understanding what you are doing.

Capability differentiator: Traditional IT was run as a commodity servicer provider which spends most of the resources on “keeping the lights on.” Digital IT organizations need to focus on value and capability building. It will mean that the enterprise view, customer perspective, business competency, risk intelligence, and vendor management are the most important elements of an IT organization. IT should spend more resources upon crafting unique business capabilities and capturing business growth opportunities. Both information and technology become the key ingredient in building business capabilities that differentiate the company from its competition in supporting the company objectives. In this regard, the payoff of digital IT organization should gain more strength as an innovation engine. Let revenue generation or increase become the focus vs. cost savings/ optimization. That's not to ignore the cost completely.

Information technology should be seen by any business as a “digital transformer and focus on the VALUE proposition to run a digital IT. The payoff of IT digital transformation is not just for the quick win, but to build the long-term business competency. IT is the key element of the business capabilities. IT innovation capabilities directly impact how it helps the business gain competitive advantage and capture upcoming trend to compete for the future.


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