Friday, March 3, 2017

De-Risk IT Management in Digital Transformation

Digital transformation is a long-term journey. Old IT thinking cannot move fast enough in the age of the digitalization.

IT plays a significant role in the digital transformation because it is in the unique position to oversee business processes and understand the underlying function of the organization. Therefore, IT will possess the company's widest breadth of view. At the age of digitalization, opportunities and risks are coexisting. The CIO will make an objective evaluation of the IT organization's effectiveness, and take a periodic risk assessment, identify the barriers and chasms for achieving operational excellence, take the stepwise approach to improve overall IT maturity and catalyze digital transformation.

Silo mentality as a chasm between IT and business: Most business managers and teams still operate in silo mentality with an incomplete and relatively small view of the business ecosystem. There is a disconnect between what business wants and what IT thinks business wants. The most important reason for project failure is "not knowing what businesses want," and waste the business resource and asset for achieving high ROI. Frequent and early feedback will mitigate directional problems and ensure the solution delivered is exactly what the customers/users want. However, if most managers still apply old silo management mindsets to new ways of organizing and this legacy of the old economy limits many digital organizations to unleash their full potential, and increasing the risk for organizations becoming stagnate, and even irrelevant. We live in an era of information abundance but insight scarcity, the result is the higher risk of conflict and inertia, not something the organization wants in a global business environment that demands innovation, speed, responsiveness, and flexibility to succeed. Silo perhaps still works in the considerably static industrial business environment. However, In today's volatile economy, hyperconnected and always on working environment, nothing impedes progress more than protective silos which are designed to preserve the status quo only.

Shortsightedness as the trap to digital transformation: Digital transformation is a long-term journey. Old IT thinking cannot move fast enough in the age of the digitalization. Often times, IT focuses on fixing the symptom to meet the customers’ requests, but not invest in the balanced “run, grow, and transform”  IT portfolio which is crucial in calibrating IT growth with the steadfast pace. When shortsightedness rules, IT leaders could just spend all resources on gaining some short-term result. It increases the risk for IT to get stuck in the lower level of maturity, “keep the lights on” only.  Thus, CIOs need to keep collecting feedbacks from the business on how to improve IT services and satisfy customers, and how they can deliver ‘competitive capabilities” to the business as many businesses will plateau without IT. More explicitly, IT management is not just the business of IT. IT failure is caused by the management of IT rather than just IT management. The responsibility for evaluating the performance of IT investment lies squarely with the C-Level/board leadership team. It is not a function that can be handled only inside the IT department or by IT managers. Without the BoD and senior executive peers’ support, the managers in the IT department are perhaps working in the dark -Mushroom management, to increase the risk and drag down the speed of the digital transformation.

The cognitive differences/skills/capability gaps: People (customers & employees) are the very purpose of running a business, however, it is often the weakest link and the highest risk in strategy and change management. Digital is full of uncertainty, velocity, complexity, and ambiguity. Though the commodity knowledge is only a click away, the knowledge lifecycle is significantly shortened.The IT skills gap does exist, it’s not the fiction, but reality. Linear skills are no longer sufficient to deal with today’s complex business problems which typically need to be solved via multidisciplinary understanding and integration capabilities. Leadership gaps and innovation chasms are also the reality, that could only become worse if homogeneous team setting is still in common and diversity is only based on physical identities or other superficial criteria. All these talent pitfalls increase the risk for the business’s surviving as well as the long-term thriving to maximize its full potential. From top-down to bottom-up, companies must be nimble in managing talent to have the right people in the right place at the right time for solving the right problems.

Hence, to de-risk IT management in the digital transformation, it is important to identify the chasms, dig into the root causes, and enforce communication cross-functionally, cross-organizationally, and cross-industrially. The long-term strategic planning and implementation need to be a cross-functional collaborative effort, not something the IT team does alone in a corner and recognize the bridge (from mindset to skillet) on the journey of digital transformation.


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