Wednesday, September 13, 2017

The Two Sides of Digital IT: Transactional vs. Transformational

Transactional side of IT seeks continuity, and the transformational side of IT seeks to change and opportunities.

Many IT organizations are at the crossroad - either transform itself to get digital ready or keep “we always do things like that,” mentality, and become irrelevant. The pace of changes in IT would force more CIOs into the transformation-oriented digital leadership position because IT plays a significant role in driving the digital transformation of the company. It doesn’t mean though being transactional is bad and transformation is good, in the absolute. Here are two sides of digital IT: Transactional vs. Transformational comparison.

A transaction follows standard operating procedures. A transformation needs strategic guideline and policy: IT engineering practices and disciplines require structural approaches and problem-solving capabilities. Thus, from IT transactional lens, following standard operating procedures is important to improve IT effectiveness and efficiency. With engineering as science, and following well-defined standard, different people specify requirements/design you get the same results, and different people read the resulting specifications you get the same explanation. Still, it doesn’t mean to have an overly restricted process to create silo thinking or discourage innovation. IT transformation is inevitable due to the sea of changes. The reality is that you have to change with the “tide,” but you also have to follow the well-defined set of principles which would guide you in decision making and how you relate to others, with which speed can you swim in the uncharted water, what competency helps you survive and thrive, and how you steer in the right direction and reach the destination without getting lost. Thus, the digital principles are like the compass to navigate through the business changes, also guide all levels of the organization to operate with harmony, in order to achieve common goals.

A transaction is inside a box; a transformation might need work cross boxes: “Keep the lights on” is always fundamental, a transactional IT is inside a box, strive to achieve operational excellence. However, simply working within IT is not sufficient to transform IT leader from Chief Information Officer to Chief Innovation Officer. To reach the next level of IT management maturity, CIOs need to know how to play a bridge between what the business understands and what technology understands, both in the box and across boxes. In fact, IT leaders need to move across functions seamlessly, rather than just within IT. IT should work across multiple functional boxes for connecting dots to spur innovation. Running digital IT means to redesign existing transactions to something new, being innovative and creative. Transformation takes a holistic approach, to leverage their various environments, or ecosystems, to manage innovation and accelerate performance. CIOs are the one who can step out of a conventional IT thinking box, or linear patterns. Therefore, they could see things further or deeper. The digital aims of organizations are to take the holistic approach for problem-solving and build an innovation ecosystem for thriving/

A transaction seeks continuity, a transformation seeks opportunity: Transaction and transformation are the two sides of IT coin, it means you have to keep the business running forward with steadfast speed, and you also have to rock the boat for making a leap of digital transformation. Some IT organizations running with bimodal speed separate the exploitation of the existing methods and technologies from the exploration of the new way to do things via leveraging the emergent digital trends to design, build, scale, and optimize business competency and improve business maturity continuously and systematically. Transactional side of IT seeks continuity, and the transformational side of IT seeks to change and opportunities. IT has to ride above the learning curve faster than the rest of the organization. Change and innovation share a common DNA, which is 'change' nature. CIOs and IT staff should take a lead role in identifying, assessing, designing, coordinating, implementing, and revising opportunities for transforming the business. When you are looking at creating digital options, it's about giving the organization the ability to explore new business models, then it is not just the value of the investment which matters, rather it is the breadth of vision and the depth of business understanding. IT should act as a change agent role, and the perception of IT, in general, will receive greater esteem with the organization and in the relevant industry sector and business ecosystem.

Both transaction and transformation are the two sides of IT coin, transaction keeps the lights on, for the business surviving, and transformation keeps IT relevant, to make the business thriving for the long term. The hyper-connecting nature of digital offers particularly fertile ground for cross-functional communication and collaboration, developing cross-industry ecosystems and innovation opportunities. Hence, IT leaders need to shift the old thinking (leads to a burden of support for operations) to the digital thinking whereas the true potential is in liberating new products, services, and business models. The digital CIOs need to reimagine IT with many possibilities and reinvent IT to get digital ready.


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