While nearly every IT organization on the planet is engaged in some form of digital transformation, not everyone has the same appetite for disruption. Several years into these digital transformation efforts, however, some key archetypes are emerging.
A new report published from technology consultancy and research firm Information Services Group (ISG) identifies five digital transformation types. “Each archetype addresses a different challenge,” explains ISG Director Jan Erik Aase, “and a problem or opportunity might be a mix of archetypes."
Knowing which type of digital transformation situation an organization is in can help IT leaders define their needs and opportunities. The Enterprisers Project talked to Aase about the key characteristics of each digital transformation archetype and advice for how IT leaders in each scenario can best approach their transformation journeys and choose partners.
1. Ad hoc/legacy transformers
Who they are:
As the name implies, these organizations are typically heavy on the legacy IT systems and are dealing with multiple organizational or technology silos. They are often driven to transform due to a one-off situation: an acquisition or merger, a competitor’s actions, or the adoption of a new technology.
Advice:
“It is particularly important for clients in the ‘ad hoc legacy’ archetype to change their thinking,” says Aase. “Fortunately, many IT service provider organizations have adopted rapid prototyping linked to business outcome-type approaches, often using collaboration labs or innovation labs that involve customers for input into design or solution requirements and result testing.”
2. Transformational by strategy
Who they are:
These businesses have a roadmap for digital transformation but move in incremental phases and look for best-of-breed solutions. They typically have deep experience outsourcing experiences and have adopted cloud-based operations.
Advice:
“Effective and successful digital transformation doesn’t just happen – and doesn’t happen when driven solely by IT,” Aase says. “It is vital to have acceptance and sponsorship from executives across the enterprise to drive the changes required, including organizational, pricing, revenue stream types, branding, marketing, and more.”
3. Cloud-first transformational
Who they are:
These enterprises are early cloud adopters and view digital transformation as an extension of their cloud-first approach. They have relatively small and agile internal IT organizations. They consider IT a change agent, and often, an enabler of revenue growth. They may consider disruptive solutions, but only after extensive testing.
Advice:
Consider moving beyond just technology for technology’s sake and pay close attention to details. When working with a provider, look at whether you are allowed to use data within the solution for other purposes, such as predictive analytics, and whether there is a cost associated with it. “The legal and operational conditions in cloud-first solutions are often overlooked, leading to frustration on both sides,” says Aase.
4. Digital enterprise natives
Who they are:
These customer-centric companies create a competitive advantage with current and emerging digital transformation tools. They focus on IT as a revenue generator rather than a cost to be managed. Their major goals are Increasing revenue, improving flexibility, and bettering their competitive position.
Advice:
“A roadmap must be constructed with phased releases planned in the traditional manner, as well as allowance for unplanned changes that are required,” Aase says. “It should also consider end users and testing pilot groups for solutions, as well as rapid prototyping and continuous delivery models.” This roadmap should come in a form that the rest of the business can understand and should be reviewed and updated regularly.
5. Disruption embracers
Who they are:
These modern-day explorers want to use their stable, but advanced, IT operations to gain new competitive advantages. They will adopt leading-edge or disruptive methods and technologies. They are highly flexible and embrace using proof-of-concept and pilot projects to quickly prove or disprove solutions.
Advice:
“Enterprise decision-makers must enable their overall business, together with their technology, to deliver agility,” says Aase. “This is increasingly enabled through disruptive solutions, partners, and methodology. It is critical in this market, which is ever more competitive, to rapidly adopt new methods, solutions, technology sets, and organizational paradigms.”
[ Get advice from CIOs succeeding with transformation. Read our report from HBR Analytic Services: Transformation Masters: The New Rules of CIO Leadership. ]
