Information Transformation At The Heart Of Digital Transformation — And Why The CIO Needs To Drive It

Philip Carter

It is fascinating to see how many companies are attempting to redefine their business models in the face of digital disruption. John Deere has set up an Intelligent Solutions Group to differentiate its equipment business leveraging the Internet of Things (IoT), while BMW CEO Harald Krüger recently stated an intention that his company will “become the leaders for digital transformation of the automotive industry.”

It’s not just manufacturing companies: Francisco Gonzalez (CEO and chairman of Spanish bank BBVA) has publicly stated that for BBVA to build “the best digital bank of the 21st century” the company needs to first become a “software company.” He believes that “huge stores of information about customers is a crucial competitive edge, and if banking can convert that information into knowledge, they can use it to offer customers goods and services that better meet their needs.” To this purpose, BVVA has acquired a Big Data specialist in Spain by the name of Madiva. Similarly, Barclays Bank in the U.K. has described its objective to become an “information business.” The successful digital transformation of these companies will largely depend on how they use the (new) data and information at the heart of their digital initiatives.

Many of these are CEO-driven initiatives. IDC predicts that two-thirds of CEOs at Europe’s largest 500 companies will have put digital transformation at the heart of their corporate strategy by the end of 2016. To help organizations achieve their digital transformation objectives, IDC has developed the Digital Transformation (DX) MaturityScape to help business and IT leaders understand and cope with the challenges and opportunities that digital transformation can bring to their enterprises. DX is the approach by which enterprises drive changes in their business models and ecosystems by leveraging 3rd Platform technologies and competencies. IDC MaturityScape DX provides a framework for viewing stages of maturity in five key dimensions: Leadership, Omni-Experience, WorkSource, Operating Model, and Information. In addition, IDC has developed a maturity assessment tool in conjunction with SAP to help organizations assess their current digital maturity across these dimensions as part of an approach to evolve aggressively on their digital transformation journeys.

As can be seen in the figure below, IDC’s digital transformation MaturityScape model and assessment methodology places “information transformation” at the heart of digital maturity.

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Information interdependencies for digital transformation

So what is the role of the CIO in all of this, given that “information” is actually part of his or her official title? IDC’s view is clear: the CIO is critical to information transformation – and hence to the digital transformation agenda. To quote an IDC colleague, Stewart Bond: “Data without integrity will not be able to support digital transformation initiatives.”

To understand information transformation, it is important to understand its composition. When IDC assesses the health of the information transformation, it primarily focus on five subdimensions:

  • Data discovery – digital transformers are actively assessing and learning from other industries as they develop their information strategy for digital transformation
  • Data value development – the most mature organizations in this subdimension are establishing data innovation labs
  • Information to support knowledge and collaboration – digital disruptors are using information to bridge the gaps between the existing and emerging digital business leaders (i.e., the CIO, the chief digital officer, the CMO, and other line-of-business executives)
  • Information architecture – digital disruptors are creating a new reference architecture that brings together the traditional IT efforts around data with new digital efforts around Big Data, IoT, and, increasingly, cognitive computing

Most organizations in Europe are at the early stages of maturity as it relates to these initiatives. IDC research shows that around 83% are at stages 1, 2, or 3 of the information dimension of digital transformation; moreover 25% are still at the “Ad Hoc” stage, operating with a very fragmented data strategy across the organization.

Carter fig 2

 

IDC’s MaturityScape information DX overview and benchmark

Although there are a number of organizations that have created new digital use cases – delivering some initial value by leveraging new customer insights, IoT, and operations – most struggle to interlink these initiatives with the core enterprise IT platforms and legacy systems. Many of these initiatives have become “islands of innovation” that now need to be joined up and integrated with core digital initiatives. How do they do this? By delivering an information management strategy combining traditional, new, and Big Data initiatives as part of a new information architecture to deliver on digital transformation.

A strong focus on information transformation will be critical for the disruptive CIO whose endgame is enterprise-wide digital transformation. Other digital executives (chief digital officers, chief data officers, etc.) will play important roles. In terms of “joining up” initiatives between the core IT enterprise platform and new digital use cases with the creation of new digital platforms (see a very good example of this here from Lego), however, the disruptive CIO will “step up to the plate” and drive back-office and front-office integration initiatives. IDC believes that CIOs who grab this opportunity will be well equipped to answer questions that CEOs will inevitably ask as part of the broader business model transformation.

Learn where you stand on your digital transformation journey with IDC’s MaturityScape Snapshot.


Philip Carter

About Philip Carter

Philip Carter is chief analyst for the European region with IDC. This new role has been created specifically to drive innovation in new research topics and deliverables, to promote collaboration and knowledge sharing, and to increase customer satisfaction. Specifically, he will identify new topics and themes and drive thought leadership, working with the broader team to continuously inject innovation into IDC's regional deliverables, events, and CXO Summits.