Wednesday, March 22, 2017

IT Digital Transformation: Three Practices from Here to There

From here - doing digital to there- being digital is the journey with the multidimensional digital effects.

Organizations are moving from here (doing digital via experimenting with some digital technologies) to there (Going digital via expanding to all dimensions for a holistic digital transformation). Digital becomes the very fabric of high performing business, organizations have to create synergy via building a positive culture, achieving operational excellence, becoming customer-centric, and doing more with innovation. To stay competitive, companies must go beyond experimenting with digital and commit to transforming themselves into a fully digital business powerhouse. But more specifically, how to develop the best/next practices moving you from here to there?

Break down silos from both mentality and organizational structure perspective: Silo mentality is a common challenge for lots of organizations. It is also the root cause of the IT-business gap. Because, digital means hyperconnectivity, fast-paced change, and always-on businesses, silo drags down the business speed and stifles digital flow. Though functional silos in traditional organizations in the industrial age intend to achieve the certain level of business efficiency, there are negative conflicts when the organization has little clarity in strategic communication and collaborative competency; and when they integrate, there is more potential to innovate and create value, more so when the collaborative competency of the organization is strong. From the mentality level, a lot of organizations' reaction to the silo mentality goes back to leadership and trust. Often lack of strategic and team objectives and rewards that drive this mentality, having leaders of respective functions to interact in a structured setting on a consist basis goes a long way towards eliminating the silo mentality. When organizational leaders place an emphasis on building a culture of cross-functional communication and collaboration, the opportunity for silos to work against the alignment of all departments towards the strategic goals and objectives of the organization is diminished. The organization can approach the flow zone to accelerate digital transformation.

IT cost optimization is a continuous effort: Thoughtful cost optimization and wise investment with an eye towards the future is the signal of a well-run company. This is particularly critical for IT because of frequent technology update and costly IT investment. A CIO must be able to develop and optimize the IT operational function within itself, as well as help to optimize the business at the company scope. All of IT spending must be looked at through an investment lens, provide a framework for thoughtful and informed decision-making, etc. Though IT is complex, Keep it Simple” should always be one of the guiding principles and management culture for running IT to achieve operational excellence. Also, it is so critical to have the IT resource aligned with the business strategies/ objectives. When a CIO is able to position and maintain the IT organization to ensure it addresses both "IT effectiveness" and "IT efficiency," strive to achieve IT agility and maturity, they have earned their stripes.

Doing more with innovation and manage a healthy innovation management portfolio: The spectrum of digital innovation is broad. There are different flavors of innovations: Disruptive innovation, evolutionary innovation, and incremental innovation. There are “hard” innovations such as product/service/business model innovations as well as “soft” innovations such as management or culture/communication innovations. More and more firms are learning and implementing best practices of innovation for improving the success rate of innovation. The paradox is that innovation is about figuring out the new way to do things, it is not supposed to be the industrial standardized practices. Every organization needs to develop the set of customized practices for the specific situation and challenges that are faced and that actually requires different priorities as compared to others. So any best practice is not a “one size fits all” formula, these practices might be different across organizations, across departments, and affiliates within an organization and can change over time. It requires an organization and culture that nurtures new ideas and is able to profitably execute on those ideas. Every organization needs to develop the tailored innovation practices via leveraging effective tools or methodologies and use them wisely with the expertise to really add value or drive innovation and manage a healthy innovation management portfolio.

From here - doing digital to there- being digital is the journey with the multidimensional digital effects. But it provides impressive advantages in term of the speed of delivery, the quality of information for decision making, and the wisdom of the digital workforce. It is important to develop the tailored best/next practices, and it takes the team effort and coordination for building a consistently innovate and high mature digital organization.


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