Friday, October 21, 2016

Three Pitfalls in IT Digital Transformation

IT and the business need to develop a true partnership and work to pursue the desired outcomes.

The majority of organizations are designed to improve functional efficiency in the industrial era; there is nature friction between different functions of the organization, because often they compete for the limited resources, or speak different business dialect. Different IT organizations are also at the different stage of business maturity, IT can be used as a tool, help desk, enabler, catalyzer, or a digital game changer to meet the ultimate goal of an organization's short-term quick win and long-term strategic advantage. There is no one size fits all formula to run a highly effective IT organization. Regardless which flavor of IT you are running, here are three pitfalls in IT digital transformation you should avoid in order to improve organizational effectiveness, agility, and maturity.

“Lost in Translation” syndrome: The gap between IT and business is one of the biggest barriers in digital transformation. The disconnect between the business and IT is still one of the biggest root causes to enlarge the gap and fail IT and business as a whole as well. It is often caused by miscommunication and lack of cross-functional understanding, or commonly known as "Lost in Translation" syndrome. Sometimes "communicate" means different things to different people. More specifically, “lost in translation” syndrome is caused by mistakes that most organizations make in business communication that fails to translate the high-level language of strategy into the professional language of the various staff specialty for execution. And to communicate you need a common language, the connection between IT and business lies in using the common language to help businesses cross that bridge to IT. The communication gaps within IT, between functions and across business ecosystem will directly decrease IT management effectiveness and degrade the business capability to adapt to changes. Hence, it’s crucial for the business to understand  that IT as a function is also business related and revenue generating, in that the information systems used for business decisions are always being used to make important decisions for the overall company.

Silo Effect: A company is made up silos called functions, and the functions rely upon company/cross-functional strategy, process, and communication. Silos are nothing more than the barriers that surface between departments within an organization, causing people who are supposed to be on the same team to work against each other. it is one of the most frustrating aspects of life in any large mature organization. Isolation of teams limits creativity as well as duplication of efforts resulting in wasting valuable resources and creating frictions to changes. To dig deeper, silos are not just the structural issue in the organizational hierarchy,  they are the result of poor thinking, managers tend to respond to silos by reorganizing, but this is hardly ever the most important aspect or the place to start. What you need to do is switch thinking in the digital mode - be strategic, holistic, inclusive, systematic, and innovative.

IT vs. Business mentality: In many organizations, IT is perceived as an isolated function and a cost center, not a business unit. Because businesses don’t really understand what IT is doing, and IT leaders lack visions or communication skills to advocate IT as a strategic business partner. IT vs. business mentality is so common, that they often run in the dark and drive in a different way. The bottom line is, for any company to succeed, it is essential for the entire company to be pulling in the right direction, including IT. The truth is IT is integral to the business. IT and the business need to develop a true partnership and work to pursue the desired outcomes. The top leadership teams, including CIOs, should agree on the business goals and then set up metrics and incentives based on meeting those goals and mapping to individual employees’ performance as well. What C-level executives really want is a partner, someone who knows what they want before they know themselves, who innovates by understanding the business, as well as what they do; the partner that works both "on the business" and "in the business," not just "for the Business." And IT is the business.

It is no surprise that there are big roadblocks and hidden pitfalls on the way for digital transformation. IT and the business need to develop a true partnership and work to pursue the desired outcomes and achieve the long-term results. The challenge is about applying digital management philosophy, building differentiated capabilities, tuning flexible structures, and developing the best and next practices in running a holistic and high-performing digital organization.


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