In the keynote presentation at last week’s CIO Summit in Sydney, Research VP of IDC’s IT Executive Programs (IEP), Mike Jennet, explained how CIOs can take a leadership position in digital transformation. According to Jennet, the key is to “engage the business to become partners in the new way of thinking”. But how is this actually accomplished? In this blog, we draw on IDC research and Jennet’s presentation to answer this question.
Breaking down DX
Digital transformation is often looked upon as a huge, overwhelming feat by IT leaders, but it’s easily broken down. Before discussing how CIOs can lead this change, it’s important to identify the different components. IDC identifies five areas of digital transformation:
- Leadership transformation – The improvement in support of digital transformation in areas of leadership, such as business model innovation and agile planning and governance. As IDC research advisers, Fred Magee and Marc Strohlein said, “Leadership of digital transformation requires a nuanced set of skills and abilities, some of which may not come naturally to many executives … DX leaders must have the ability to create digitally fuelled business visions; to attract ‘co-conspirators’ including customers, partners, and competitors to help realise the vision; and finally to organise the myriad of components needed to actually execute on the vision”.
- Omni-experience transformation – The improvement of key areas and dimensions on the customer side, where IT traditionally has not had a lot of focus. According to Jennet, “80% of industries are looking to reshape the way they work and interface with customers”. IDC research VPs, Leslie Hand and Philip Carter, state, “Businesses understand that the customer has changed … Business leaders that can capture ecosystem inspiration and perspiration, and then capitalise on these relationships and systems to amplify network value and loyalty, stand to gain real advantage over their competitors in the race to the future of the digitally enabled enterprise”.
- Information transformation – The effective evolvement of information as a critical enabler of the digital transformation of the enterprise. Information is an organisation’s fastest growing asset, and executives who leverage and manage it will be able to achieve facts-based and data-driven decision making and desired outcomes based on business-oriented organisational goals. As VP of research within IDC’s IEP programs, Serge Findling, says, “Leaders in information transformation must treat data as they would any asset as well as invest in a range of technology and people to unlock the monetary value of this information treasure”.
- Operating model transformation – The successful integration of digital business technologies into future operating models. Jennet stated that “10% of work is coming from the outside” as organisations increasingly outsource and embrace recent trends such as crowdsourcing and working with startups to drive innovation. Group VP and General Manager of IDC Retail, Energy, and Manufacturing Insights, Bob Parker, believes that operating model transformation is the most foundational element of digital transformation for continued success, but also the most difficult “given the long-established practices in many industries”.
- WorkSource transformation – The improvement in the way enterprise leadership manage talent, source talent, optimise work, and facilitate a digital transformation mindset throughout the organisation. IDC VP for Business Consulting Services, Cushing Andersen, says, “Organisations that can master the orchestration of improving each WorkSource dimension will thrive; those that don’t will struggle”.
Leading in 3D
To help CIOs in partnering with the organisation, IDC has introduced the ‘Leading in 3D’ framework, which focuses on the dimensions of innovation, integration, and incorporation. This involves:
- Innovate – Partnering with the business to create digital innovations. CIOs can promote business innovation through visionary technology leadership and agile development.
- Integrate – Transitioning new technologies into stable business services. CIOs can bridge the business and IT operations transformation with an integration agenda. Critical to the success of ‘leading integration’ is strategic architecture that serves as a framework for IT platforms.
- Incorporate – Evolving existing technology platforms continuously by infusing new skills, techniques, and culture. CIOs can lead incorporation by selectively streaming new technologies, processes, and methodologies to enable the transformation of existing IT and enterprise processes.
Discussing the Leading in 3D concept, Jennet used the United Parcel Service (UPS) in the US as an example of an innovation team. The customer service department identified a customer pain point in the ‘sorry we missed you’ notices they received if they were not home at the time a delivery was made. To address the problem, the IT department set up an innovation team who came up with an app that alerts users to incoming shipments and give them the flexibility to reschedule, redirect, or have their packages delivered to a different location. The ‘Leave with a neighbour’ program allows users to have packages delivered to a nearby address. This has seen a trend in some neighbourhoods whereby one person is nominated as the acceptor of packages on everyone’s behalf. Not only does this app improve the customer experience and create new revenue streams, but it has created huge efficiencies for UPS, who saves time and money with less unnecessary travel and less stops overall. As Jennet said, this innovation has “transformed the way UPS does business”.
IT leaders shouldn’t look at digital transformation as a daunting project – it can be broken down into numerous components which can be tackled individually. Furthermore, a digital transformation doesn’t have a start and end date; it’s an ongoing process whereby teams are innovating, integrating, and incorporating. It’s about smaller teams breaking traditional IT roles and doing things that have never been done, just as UPS did with its app.
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