IT's role in digital transformation isn't a small one

Profile picture for user barb.mosher By Barb Mosher Zinck April 6, 2016
Summary:
Digital transformation is building towards an imperative. But a new Harvard Business Review study indicates that IT organizations are not prepared for digital business. Barb Mosher Zinck ponders the implications.

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Digital transformation chatter surrounds us. The time is now; if your organization doesn’t adopt digital, doesn’t focus on customer experience - they will get left behind. May sound harsh, but it’s pretty much true. Up pop the customer experience officers, the chief data officers, the expanded role of the CMO. But what about IT? What about the CIO? Technology may not be the driver of digital transformation, but it’s sure powering the bus.

In an HBR report (sponsored by Redhat) called `Driving Digital Transformation: New Skills for Leaders, New Role for the CIO” (PDF link), there was found a lack of knowledge and skills required to execute a digital strategy by many of the companies surveyed. Only 23% said they felt they had the skills and technology knowledge required for digital business.

That same study found that 41% of IT spending is happening outside of the IT organization and that 49% make technology purchase decisions with little or no IT help. So, there’s a large lack of technology knowledge by people making technology decisions. Scary.

This, indicates the report, is where CIOs can play a big role. The CIO has the opportunity to play the role of evangelist, digital coach, and of course, leader.

From the report:

Leading CIOs help their business colleagues understand which digital knowledge and skills need to reside in their function, and which they can leave to IT. They and their teams communicate in a language that makes sense from the perspective of business activities and outcomes. And they partner closely with key business leaders—often the CMO—to bring together the best from both domains.

In fact, this role of evangelist or digital coach can be performed by many in the IT department, assuming they do understand the role technology is playing in digital transformation.

Is IT really everyone’s job?

Everyone can’t have a deep knowledge of technology. As the report says, they can understand its importance, can learn how to use technology to meet business needs, but they don’t need to fully understand the ins and outs of how to implement technology. This is the role of IT, but it’s just one part of IT’s evolving role.

What is clear is that IT and business roles need to overlap, and there needs to be a cross-pollination of ideas and concepts. The business specializes in the customer experience, and IT needs to understand how customer experience strategies need to be implemented to figure out the best technologies, integrations and so on.

Organizations need to shift from a purely centralized IT model that comes in after all the business requirements are gathered to implement the technology, to putting their IT staff inside the lines of business to be involved right from the start.

Bringing IT in at the beginning also helps with selecting the right technology, even when the decision is the businesses to make. At some level, shadow IT will always happen, but if an IT person is involved with the business all the time, they have the potential to have greater influence over the purchase decision. An IT resource will see issues with technology that a business person might not (such as trouble integrating the new tech with existing systems).

A delicate balance between business and IT

But there’s a trick to having IT always involved. You don’t want the IT person explaining technology while you are working through business processes or customer journeys. You don’t want technology leading the way you do customer experience. “Do XYZ this way, because that’s how it’s implemented in technology A that we use.”

However, sometimes knowing what technology can do helps with innovative thinking. Maybe you don’t think you can do something because it would take too long or be too challenging, even though you know it would help greatly. If you knew there was a technology that would reduce time to market or simply a process, then you might be more open to new ways of working.

It’s a delicate balancing act where IT can coach the business to think in new ways, but not based on specific technology tools or platforms.

The HBR report notes that not all CIOs and their IT departments are as supportive as they could be to help the business become more technology knowledgeable. However, it was found that in organizations who are considered digital leaders:

Seventy percent have IT departments that provide useful information to employees about technology; 67% have IT leaders who understand which pieces of knowledge are relevant to each area, and 60% have CIOs who are educating and empowering functional leaders in digital knowledge, almost double the proportion of Follower CIOs and triple that of Laggard CIOs.

My take - the road to a truly integrated team

When I worked in the IT group at a large insurance company, the model worked like this: each business unit had its own IT group, including corporate, but the IT architects (the application and system designers) belonged to a centralized group. All the IT teams were ultimately under the management of the CIO, but each business unit had IT knowledge directly within their team involved in all aspects of projects from the beginning. The architects reported back to a chief architect who reported directly to the CIO, so there was what appeared to be a wide understanding of how the entire business worked from a technology perspective.

It was a good model because it kept IT directly involved with running the business. Each IT person in a business unit had a very strong understanding of the business. But, one IT group didn’t know a lot about the other group and what they were doing. The challenge was there was no cross-organization understanding.

At the time, this may have been okay, but today that model would be seriously tested because a customer could belong to both business units and one didn’t connect with the other. Today, it would be better to have a centralized IT group with IT resources helping each business unit, but then coming back and being able to talk to each other to see the interrelationships regarding business functions and, more importantly, technology.

IT needs to be integrated with the business, but also able to work closely with other IT resources to get that complete cross-organization view required for customer experience and successful digital transformation.

The opportunities for IT resources to be more than simply technology implementers are huge. Everyone says these are exciting times for marketing, but I also think they are exciting times for IT.