Sunday, May 7, 2017

How to Gauge the Success of IT Digital Transformation

The assessment of IT digital transformation should focus on evaluating how IT impacts the top line business growth, operational excellence, and customer/employee satisfaction.

As businesses embark on the “Digital Era” of computing and managing, the digital has become ’normality,’ and almost everyone now feels at ease with digital technology, but also feels a bit overwhelming about the exponential growth of information. As the steward of information and technology in the organization, IT is always in the changing environment creating unexpected situations and requiring quick and appropriate responses based on the conditions. So how to shift IT from the reactive support function to a proactive digital engine of the company? And How to gauge the success of IT digital transformation?

The assessment of IT digital transformation should focus on evaluating how IT impacts the top line business growth: CIOs need to make an objective evaluation on how IT can directly contribute to the organization's strategic direction and the top line growth. CIOs must lead IT in reaching high-level performance. Making IT department a profit center is one of the biggest challenges in most of the organizations. IT needs to be considered a line of business, and not some back office, geek function. The transformative digital CIOs have already changed the focus of their work - from technology-oriented tactical managers to information technology leaders and business strategist. IT should position itself as an "enabler of corporate strategy and mission," rather than an "enabler of technology."  Therefore, the measurement of IT digital transformation success should focus on how IT impacts the top line business growth and builds the long-term business competency. When IT organization is perceived as being innovative, it is on the right track to reach the success of digital transformation. IT needs to become the business’s innovation engine, rather than just tools. IT is the only entity in the organization supposed to understand business entirely and catch the oversight of organizational processes horizontally. The ultimate success of IT should be evaluated on how IT is able to deliver innovative products/services or supply a differentiated solution that contributes to both top line growth and the bottom line success of the organization.

The assessment of IT digital transformation also needs to measure operational excellence:
IT has to provide stability and operational health, which requires a serious amount of positive communication whilst continuously looking for cost-efficient replacement of unstable or "old" processes. The cost part of the IT departments should be part of an overall corporate/company budget. Therefore, making the IT department a profit center is what the real challenge because it requires some kind of rethinking and reinventing the corporate processes and returning the business capabilities. IT metrics have to evolve from being a cost center to becoming a revenue generator. The only way to do this is to show a clear link to top executives between IT efficiency and productivity/ top-line revenues. This is an important step to building IT reputation as a strategic business partner via achieving both operational excellence and maximizing innovation potential.

The assessment of IT digital transformation should include making an evaluation of the customer satisfaction and employee engagement: Digital is the age of people. People are always at the center of digital transformation. IT should shift from operation-driven to customer-centric, IT has two sets of customers, the internal business users and the end business customers. The success of IT digital transformation is dependent on how IT can enable and empower the business users with the latest digital technologies to improve their productivity and stimulate their creativity, to ensure the right people getting the right information to make right decisions timely; it also depends on how IT can help to digitize every touch point of the end customer experience and improve the overall customer satisfaction. From talent management perspective, it is an assessment of employee engagement, meaning associated with their job, flexibility, career growth and freedom. All functions in the organization have a stake in strategic talent management practices, IT can empower talented employees to unleash their potential, and make the digital workplace more creative and productive, to drive the business success for the long run. IT is on the right track of digital transformation when every level of the organization has great work relationships with IT teams, CIOs are like the digital conductor who can orchestrate their own sheet music, not just the background music, so IT can truly become the trusted business partner and change agent.

With increasing pace of changes, CIOs generally have greater opportunities to stand out and practice digital leadership in driving innovation and leading digital transformation across their companies. You can only manage what you measure. When a CIO is able to position and lead the IT organization via objective assessment to ensure it addresses both IT effectiveness and efficiency, agility and innovation, flexibility and scalability, they have earned their stripes.


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