Tuesday, December 27, 2016

The "CIO Master" Book Tuning #150: Five dimensions of IT Digital Transformation

At the high maturity level, organizations have to stretch out in every business dimension for driving the full-fledged digital transformation.

Modern IT organizations play a critical role in driving the digital transformation of the entire company. The CIO has to look forward and actively position the business in the right place to take full advantage of opportunities and emergent digital technology trends. DRIVING is not a passive activity. The role of modern CIO is to identify and blend the processes and practices that information and technology can assist and shape the business by linking all digital aspects together to enforce the value creation and drive digital transformation from multidimensional perspectives.


From competition to “coorpetition”: In the traditional organizational setting, IT vs. business mentality creates the gaps in strategy management and causes unhealthy competition for the resource or budget management. With today’s digital hyper connectivity and interdependence, it is time to step into the new hybrid era of “corpetition” (cooperation + competition). IT and business are the integral whole for achieving the well-defined business goals. It could also mean to encourage healthy competition and enforce innovation. Business leaders should set principles and disciplines to discern the positive motivation or negative energy behind the competition. Whether we like it or not, as long as humans are unique, their mindsets, opinions, cultures, lives and views etc, are equally unique and diversified. That results in both collaboration and competition depending on the context and situations.


Understanding of end customer expectations and experience: Digital IT has two sets of customers: internal users and end customers. In order to transform IT from a cost center to a revenue generator, IT has to understand the end customers’ expectation and help to optimize customer experience as well. Make sure it covers all prospect and customer touch points as well. Customer experience is being the main driver for differentiation and in the end profitability. Customer experience isn't about improving things for the customer at any cost. It's about having the real insight to make confident business decisions that result in unambiguous ROI. Either quantify the value of customer experience or qualify the management effort, keep the end in mind, the end is to delight customers and improve business prosperity and brand for the long term.


Organizational development needs to focus on improving employee engagement: IT is at the unique position to oversee underlying business functions and processes and weave all important business elements (people, process, and technology) to build differentiated business competency. Hence, it is also critical to fine tune the organizational structure and development focus on improving business effectiveness, employee engagement, and overall business maturity. This requires that management starts with a complete and accurate diagnosis of the organization's current state, identifying any barriers to excellence that may exist, and then develop strategies for lowering or removing those barriers. Digital organizational development needs to manage the conflict between the classic industrial style and the digital style of management: Traditional management expects command-control, while digital professionals demand engagement. Traditional management views the performance from a behavioral compliance to norms world, digital professionals view performance as largely dynamic knowledge- based change continuum.


IT as the linchpin of the business capabilities: Because modern CIOs are in the unique position to capture the oversight of business processes, projects, tools, cultures, and risk management, with the special lens focusing on technology as a key element and the linchpin of the business capability. A typical capability lifecycle spans need, requirements, acquisition, in-service, obsolescence, and disposal. The dynamic digital organizations need to get away from letting things fall through and start creating “integrated wholes” by utilizing the correct processes to solve complexities, ultimately bridging the chasm between the business and IT. Enterprise capability management, in essence, consists of a portfolio or matrix of capabilities that are used in various combinations to achieve outcomes. In addition, business leaders are increasingly looking to the IT function for introducing beneficial change into their business models to improve strategic performance, achieve operational excellence, enforce customer intelligence and to position the enterprise for being the digital master.


Improve business agility to move quickly, adapt and change course: IT is like the “digital brain” of the organization to store, process, and retrieve information, and capture the real-time business insights across the organization in a way never possible before. With these insights, organizations acquire the ability to reshape products, services, and customer engagement, move quickly and adapt to changes promptly. In the dynamic digital business ecosystem where change is significantly speeding up, that business leaders couldn’t predict the future with a certain degree of accuracy, and the strategy can no longer stay static, the business goals can no longer be well framed in advance. More often, organizations are too siloed to be able to relate coherently as a holistic business to the digital journey. When IT only takes orders as a support function, the organization has become "unconscious" because it is no longer responding to the external environment due to the lack of the business insight. A high-effective information-savvy digital IT can significantly improve the business agility based on self-adaptation as the capability to adapt to the change and make "conscious" business choices seamlessly.


Transformation is a journey rather than a destination. At the high maturity level, organizations have to stretch out in every business dimension for driving the full-fledged digital transformation. IT must be a business partner within the organization and a digital CIO has to focus on guiding the company through those bumps and jumps, to both reap some quick wins and focus on the long-term business results and prosperity.

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