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Digital Transformation: Is It Right for My Company? Part I

When you think of corporate digital transformation, what comes to mind?

Most business leaders would answer by saying that digital transformation is probably a project meant for technology companies or a project for an IT person or department to tackle. You might even think that digital transformation is the internal nuts and bolts of the back office. But that’s not accurate.

Digital transformation is a business strategy for the digital age. Yes, you may lead a tech company. Or you may lead a fast-casual restaurant chain. The reality is that digital transformation is industry agnostic.

In Part I of this two-part article series, we’ll explore digital transformation, what it is, where a company can begin, how to create standard processes for collecting innovative ideas, the role IT plays in transformation, and some of the technology roles necessary to transform.

Digital Transformation – Where Should We Start?

In our experience, sometimes, the best place to begin is to take a step back at the big picture. Start by looking at the current state vs. the goal state.

For example, your company sells standard “dumb” lawn mowers and wants your next product innovation to be a “smart” lawn mower. This seemingly simple product upgrade may change many of the value streams in your company. Your company will no longer only be distributing manufactured goods but also software! The smart lawn mower will add complexity to the process and your team, from IT to sales to customer service will need to adapt to this change.

Companies often find that highlighting the various ways a new project affects all departments, not just one, helps to show that big picture. In addition, taking the time to map the interdependencies and the changes to business processes can help illustrate the big picture for everyone while increasing team member buy-in.

Digital Transformation – Ideas Can Come From Everywhere

People closest to the problem or tech leaders are often the ones who are driving transformative projects or ideas. However, one of the biggest frustrations in innovation is that ideas get collected, but nothing comes of them.

Sometimes innovative ideas sit because the business leaders are so focused on the responsibilities of running the business that they aren’t acutely aware of the need. And if they are, they don’t have the capacity to re-prioritize work for this kind of change. And other times, the lack of focus on innovation stems from not knowing if they or their teams are working on the right thing.

Some companies let a small group decouple from standard processes and run fast. Other companies require everyone to follow the chain of command for all innovation. There is not a one size fits all approach to innovation, but a formal process approach should be present because turning the mothership from one direction to another is difficult. Just look at Blockbuster and compare its innovative approach to that of Netflix.

Everything comes back to needing a process (agile, lean, waterfall, etc.), and digital transformation is no exception.

Processes help organizations capture ideas, filter them down, execute & test, review the data, and determine what to do next. As the innovative spirit grows, your company will want to start building a more formal process that fits your company’s culture and needs.

The Role IT Plays in Digital Transformation

We’ve been discussing how digital transformation isn’t solely an IT project. So, where does IT fit into the innovation process?

One way to answer this question is to review your company across all business areas. This view will help you to level set.

The graphic below, utilized by our partner, Brent Leland, former CIO of Trek Bicycle and founder of High G, a boutique consulting firm focused on innovative and technology-enabled growth strategies, shows the five levels of IT’s role in the business.

Source: Adapted from Gartner

  • Level 1: Functional. IT is simply there to keep the lights on.
  • Level 2: Enabling. The business figures out what to do and IT basically reacts to those requests. Many times, the business will avoid involving IT since they are viewed as an impediment. This results in very siloed efforts.
  • Level 3: Contributing. IT develops a greater understanding of the business and can proactively offer solutions. Overall, this is the shift to viewing the business from a cross-functional, integrated perspective.
  • Level 4: Differentiating. Technology is seen as a differentiator, using product and customer-facing technology to gain a competitive advantage.
  • Level 5: Transformational. IT is a market-maker and aims to transform the business model. Most businesses won’t need to be at a Level 5, but they may need pockets of it.

An excellent way to determine your current company-wide level is to share the chart with cross-functional leaders and team members within your company and ask, “Where do you think we are at today?” and “Where do you think we need to be?”

Most likely, not everyone will provide the same answers but will provide their perspectives based on their department and responsibilities. Then, use that insight to determine where there are gaps and opportunities for alignment.

Technology Roles for Today and Tomorrow

Once companies decide to tackle digital transformation, they often look to hire or contract additional technology roles to support the project.

Over the past 5+ years, there have been new job titles emerging in the market — new titles like Chief Digital Officer, Chief Experience Officer, Director of Innovation, and other roles have emerged.

When you think of the Chief Information Officer (CIO) or Director of IT roles, you probably think of a traditional, critical, and internal IT role. In comparison, roles like Chief Technology Offers (CTOs) often move one level past core technologies and take on the responsibilities of building tech throughout the company, along with the customer-facing product or service enhancements. And Chief Digital Officers (CDOs) often go even further into the business, are often more externally facing – and carry the responsibility of driving process improvement and transformation.

When considering the right technology roles for your company, hire in alignment with the strategic goals.

If your company is considering a digital transformation but doesn’t know where to start, or needs support in the process, SafeNet Consulting is here to help. Contact us at info@safenetconsulting.com for a free, no-obligation personalized digital transformation discussion.

 

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