Saturday, October 28, 2017

The Promises and Perils of IT-Driven Digital Transformation

The purpose of digitization is to make a significant difference in the overall levels of achieving high performing business results.

In today's world, information & technology is driving the digital paradigm shift. Unlike previous eras during which business transformation was driven by business ideas. This is a golden opportunity for CIOs to lead the way by enabling change, optimizing business processes, catalyzing digital transformation, and governing risk management that's going viral in the enterprise. The journey will not be so smooth, there are many curves and bumps on the road, and here are the promises and perils of IT-driven digital transformation.

Change, innovation, and speed as promises: Digitization is all about CHANGE. IT has a great opportunity here to lead the business transformation due to the changing nature of technology and the overwhelming growth of information. Rather than wait for the business to tell IT what they want, IT needs to proactively work with the business and partners on how great digital technologies can change the business, innovate products/services, and speed up. The promise of IT-driven digital transformation is, therefore, about change, innovation, and speed. In fact, in many forward-looking organizations, CIOs are empowered by the business to go beyond Information Technology and encompass all knowledge and business insight across the entire company scope, to run a real-time, highly intelligent, and high-performance digital business. People tend to have a high expectation of digital flow, very little patience with technology issues. Businesses love to see IT getting deeply immersed in new apps, devices, and solutions and make business more productive, collaborative, and smart. IT today has many roles to play, as a change agent, innovation engine, digital driver; integrator, customer advocate, or governance champion. Further, the promise of IT-led digital transformation means speed. Organizations rely more and more on technology and the IT department has more and more to overcome for running at digital speed. Only through mutual understanding and cross-functional collaboration, business and IT can work as a whole to make the promise come true and manage a smooth digital transformation.

Silo, shallowness, risk, and fear as perils: Digital transformation is a thorny and long journey. There are many roadblocks and pitfalls on the way. Digital means flow, hyperconnectivity, and interdependence. Thus, the silo is the very obstacle to overcome in managing a seamless digital transformation. Silos happen when the "Why?" in business is not properly communicated from the senior level management down through business units. To keep business dynamic and change as a new normal, the "why" must be answered throughout the business chain, otherwise, the employee does not have the correct purpose and lack of motivation to change. Silo also happens when the business operates from a fear standpoint: Fear of rejection, fear of invisibility, fear that other peoples' accomplishments will somehow diminish your own, etc. Silo does build the wall in people’s minds and tie the knots in their hearts. The other pitfalls for transformation, either for business improvement or innovation is sometimes getting the 'right answer' to the 'wrong question,' or "fixing the symptom without curing the root cause." Doing the wrong things differently isn't a digital transformation. Shallowness ruling the way can stifle change and decelerate speed. Especially with “VUCA” digital new normal, digital leaders must have a clear vision and a comprehensive roadmap to steer the organization across the blurred territories and uncharted water in the right direction. It is important to first do the right things to improve digital effectiveness before doing things right for achieving efficiency. Organizations also should make an objective assessment of their risk appetite and risk management ability. Because digital brings both significant opportunities and risks, organizations should manage a balanced portfolio with both incremental and radical innovation. Organizations could miss the opportunity if they only focus on operations in low-risk territories and incremental enhancements only, or they solely focus on quantifiable benefits or short-term business results. On the other side, if organizations take the risk bigger than they could handle, their businesses would be in the bigger danger to fail as well. Many disruptive opportunities are brought to life with new thinking on how to monetize them. A disruptive product or innovations is a breakthrough in the existing solutions, something that has the potential to disruptively challenge all existing solutions. Most companies fail at innovation execution because they have no clear process, nor understand the linkage required to work horizontally across departments, or a holistic approach to managing innovation as a process.

The purpose of digitization is to make a significant difference in the overall levels of achieving high performing business results. By understanding varying promises and perils on the journey of digital transformation, the business can make a leap of such radical changes via a clear vision, strong focus, distinctive change capabilities, and solid management disciplines.


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