What Is Enterprise-Wide Digital Transformation?
2018 was a watershed year for digital transformation. A new CIO survey from KPMG found that more companies than ever implemented a digital strategy last year, with IT budgets at their highest in almost 15 years. Yet most digital strategies are still in their infancy. As companies invest in innovation to enable their modernization, I can’t help but wonder: how many understand the concept of enterprise-wide digital transformation?
Research suggests that companies have grown less confident that their strategy is truly enterprise-wide (less than one-third have a clear digital vision across the organization, according to KPMG). The study also found that scaling digital transformation enterprise-wide remains a significant challenge, with only 18% believing they are effective at doing so.
A company cannot use advanced technologies to create value if that value does not extend across the organization. Digital leaders understand the magnitude of this task and have created a defined strategy for delivering sustainable value enterprise-wide.
Why Are Companies Struggling with Enterprise-wide Digital Transformation?
Companies are realizing only a subset of benefits due to several key roadblocks along their transformation journey:
Extending beyond IT: 75% of CIOs surveyed by KPMG believe that digital could be more effectively implemented to support business strategy outside of IT. Avaya’s research discovered key misalignments between IT and LOB in terms of transformation ownership. Transformation should encompass both front-end and deeper operational activities without favoring one over the other to modernize, simplify and streamline end-to-end.
CIO strategy: The belief that the CIO role is becoming more strategic decreased significantly between 2017 and 2018, particularly in the telecommunications and government industries. Almost one in 10 CIOs feel their role is becoming less strategic, which KPMG attributes to a feeling that their function is ‘keeping the lights on’ as opposed to creating dynamic business change. Meanwhile, the study found that the CIO is much more likely to become strategic if an organization has an enterprise-wide digital strategy in place.
Enterprise-wide integration: 70% of CIOs believe their company can do a better job of integrating core business solutions with new systems. As a result, only 25% believe they are effective at delivering engaging customer experiences, and only 19% have a single view of customer interactions across all service channels that enable them to personalize experiences.
Balancing innovation with governance: CIOs have a difficult tightrope to walk when it comes to balancing governance and creativity. On one hand, they are being asked to promote innovation and on the other security, data integrity and resilience. Overall, 70% of today’s CIOs report that their organization’s governance model is moderately effective or worse.
Four Actions to Immediately Improve
What steps can be taken to affect long-term digital change enterprise-wide? Here are my best recommendations:
1. Establish goals and expectations for IT and LOB: IT and LOB leaders must weigh in and agreeon business drivers and transformation expectations. These insights should then be used to map out goals (both short- and long-term) and key digital strategies to ensure organizational alignment.
2. Invest in a next-gen digital platform: This enables you to transition from legacy servicesto flexible software solutions that allow for the seamless integration of third-party services, strategic business tools and emerging new technologies like AI and mobility enterprise-wide. This supports an open data model that can rapidly integrate various information sources to present a full visualization of the customer journey. An adaptable, future-proof platform also allows you to easily scale agile methods to deliver innovation faster.
3. Elevate the CIO: Evolve the role of the CIO to influence and guide the enterprise on the effective use of digital technologies. This executive is uniquely positioned to unify all lines of business under one vision of end-to-end digital enablement. Perhaps no other role is undergoing as much change, nor has as much opportunity to drive innovation.
4. Reframe security: Focus on where security requirements are and ensure you’re putting the right technologies in place, involving your security groups to review this versus having a defeatist attitude (i.e. “we can’t do XYZ because of security”). Make security the top priority at every stage of the development process, building it in versus adding it on. The industry is changing. Leaders will ensure they have the right security controls in place while pursuing growth and innovation, period.
It’s impossible to deliver long-term value or experiences that matter if you’re realizing only a subset of benefits from siloed transformation efforts. Enterprise-wide digital transformation is a defining business challenge of our time, yet it can be overcome by reorganizing one’s approach and refocusing key efforts.