The most challenging aspect of digital transformation isn’t the technology: It’s effectively managing change and getting people to embrace it.
Although companies plan to spend $1.2 trillion on digital transformation in 2017, less than half (44 percent) of IT decision makers are extremely confident in their organization’s ability to achieve the vision, according to “Executing Digital Transformation,” a March 2017 study by PointSource. Many of the roadblocks relate to organizational structure and culture.
Getting transformation right is critical. February 2017 research from McKinsey shows companies that get digital transformation right win market share, and those that don’t actually have a negative ROI for their investments.
In almost every consulting project, organizations want developers to create and install technology that auto-magically solves their problems. Instead, businesses need to start by closely examining their own business processes, to identify opportunities for improvement, and auditing their systems to target interdependencies and weak links. Without these steps, new technology won’t make a meaningful difference.
And now we’re into change management, because we’re changing how the organization does business and the roles of the employees. Keep three key factors in mind as you manage the change.
Make no little plans
As famed Chicago architect Daniel Burnham said, “Make no little plans. They have no magic to stir men's blood and probably themselves will not be realized. Make big plans; aim high in hope and work.” That’s true in digital transformation as well. To create real competitive advantages, the scope of change needs to be greater than just incremental improvements or improvement of software features.
McKinsey, in the same report referenced above, shows that bold strategies win: The winners in digital transformation invest more than companies who invest less, McKinsey believes. Even if you are a market-leading company, make just incremental improvements to legacy systems and you will miss the larger opportunity of a true digital transformation.
That means company leadership needs to be on board and recognize the value of making large-scale change. IT teams need to apply sufficient resources and focus to digital transformation work, as opposed to handling legacy feature requests and keep-the-lights-on support.
To create the technological foundation for a digital transformation, perform a complete audit of your systems and any third parties those systems might rely upon. This will let you evaluate, clear-eyed, your challenges and opportunities. It’s a critical step: 84 percent of respondents in the PointSource study say their organizations have disparate legacy systems that impact the speed of development of new digital experiences.
Build C-suite support
To form the necessary critical mass for digital transformation, the CIO needs to lead the effort at a minimum. In many cases, the CEO or board also needs to encourage the organization to strategically marshal forces for the work. Competition between departments for resources and/or budget impedes digital transformation, say 76 percent of the PointSource study respondents. Just 30 percent say departments within their organization always come together to solve problems.
But beyond just being the proponent of change, the CIO also has to be the evangelist for it and make a safe space for it. Don’t underestimate the cultural shift: You’re encouraging teams to do away with the tried and true and embrace experimentation that will not always be successful.
Make a protective learning environment
That kind of culture change is uncomfortable to many people. But once you get this ball rolling, change becomes infectious. We see that once companies get a taste of cloud enablement, they can’t get enough. Success breeds more success.
However, often staff do not have the experience necessary to manage or develop technologies like AWS or Microsoft Azure. Gartner identified tech talent as the biggest hurdle to digital transformation, and the competition to acquire that talent remains fierce.
One strategy is to develop the skills of your staff alongside the development of your new systems so they can learn the skills they will need to maintain or develop them in the future. More than a few will resist the opportunity, preferring to safely stay with what they know. To address the fear of failure, demonstrate the opportunities that come with mastering these new skills, and create a protective environment for learning.
Digital transformation is also about cultivating the talent necessary to steward your organization through the journey.
Your investments will pay dividends well into the future. As that famous Burnham quote continues, “Remember that a noble, logical diagram once recorded will never die, but long after we are gone will be a living thing, asserting itself with ever-growing insistency.”