Many people believe that digital transformation is not an IT thing. While this may have been true when applied to last century’s typical IT group, it should not be true in 2018.
To be fair to anyone who believes that IT cannot lead digital transformation, I’m referring to a new kind of IT: The technology team of 2018 must be capable of accelerating digital transformation across the organization. In some companies, the CIO may well be a natural champion of digital transformation. But to be successful, the CIO must still win the support of the CEO and the rest of the executive team. And even if the CIO is driving the transformation, it must be a companywide effort, not something that exists only within the CIO’s operational silo.
Digital transformation requires the design and creation of new technology capabilities across the business. Many of these new capabilities will exist outside of IT. Alongside the creation of these new business capabilities, CIOs must also reshape the technology team to nurture and grow the application of technology as a strategic asset of the business. Most significantly, technology will contribute to the creation of customer value and future revenue growth.
This CIO is not your CIO of the past century. Indeed, it is not unusual for today’s modern CIO to be given the title of chief digital officer/CIO or even just CDO. Alongside new leadership thinking at the helm of the technology team comes some often significant cultural and structural changes to make the tech team more responsive to the business and end customer needs. In fact, today’s modern, digitally savvy IT team is more like yesterday’s eCommerce team.
CIOs driving such transformations implement a raft of changes within IT to help shift their organization into digital accelerator mode:
- Apply new customer metrics to help reshape IT’s culture: Traditional IT metrics create a transactional mindset in IT employees; they focus on delivering the project, meeting budget expectations, and keeping the lights on. The new metrics business-forward CIOs are adopting focus on delivering measurable business impact. Metrics like customer retention rates, customer satisfaction, even revenue and profitability – metrics traditionally found in marketing and lines of business – are appearing in the goals of IT employees. While these changes result in an IT team more connected to the goals of the business, they also shift the focus of IT from inside the business toward the external customer of the business.
- Implement design thinking to deliver higher-value customer outcomes: Gone are the days when IT would ask the business leaders what they wanted, and then go away and code for a year, eventually delivering something that may or may not have had value to the business. The modern IT team is leaning in to the business and engaging in design thinking sessions with business teams and even external customers. The renewed empathy for the end customer allows tech-savvy IT professionals to be much more innovative in creating high-value customer experiences.
- Adopt journey mapping to shape CX improvements: Customer journey maps are the new process design tool for IT. Journey maps allow IT professionals to work alongside marketing and lines of business in seamless teams focused on delivering continuous improvement in customer and employee experiences. And because they are not an IT-thing, journey maps are more readily embraced across all parts of the business.
- Implement DevOps and Agile: To fully transform to new IT, the business-savvy CIO must lead her team through a substantial operational and governance transformation. Embracing Agile and DevOps accelerates IT to match the new cadence of business: fast, not perfect; test and learn; continuously improving.
- Continuously evolve high-value digital assets: Moving from a project orientation toward a product delivery and support operation is a big shift for many. IT becomes more like a software developer, with product roadmaps and continuous releases. As IT moves from project to product, governance and funding shifts to fund continuous evolution.
- Focus IT on what matters the most to customers: Business-savvy CIOs resist the temptation to treat all parts of the business as equally important “customers”. Instead, they recognize that while these business partners have operational technology needs, not all of them impact customer value and revenue to the same extent. Because of this, they focus the most valuable resources they have on place where they can create the maximum customer and business impact. And for the rest, they encourage business leaders to simplify and adopt off-the-shelf solutions that require little or no support from IT. Sometimes even recommending parts of the business are outsourced and integrated into the technology stack through APIs.
In short, a modern IT team is customer-obsessed, business-oriented, fast, and focused.
If you have this kind of IT, then yes, IT can help drive your digital transformation, and the CIO can possibly lead it. (Note: You probably don’t have this kind of IT yet.)
Maybe this modern IT shop will evolve into a new name, just as MIS evolved into IT (or ICT, outside of the US) — maybe IT will evolve to be simply “digital” or “technology.”
What do you think? Drop me a tweet: @NigelFenwick
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