Will IT Find Relevance In The Race For Digital Transformation?

Paul Kurchina

Digital transformation. Digital disruption. Digital startups. Digital consumers. Digital workforce. Thanks to this new lexicon of varying definitions and urgency, CIOs and their organizations are tasked with reimagining how business is done. There is great value in this mission, but it is no less frustrating for CIOs who are seeking business relevance in a hyperconnected environment where everything moves at warp speed.

According to Allan Adler, managing partner of Digital Bridge Partners, this era of digital everything is forcing the IT function to ask some tough questions. “All of us [in IT] want to make sure that we are relevant and capable of adding value. So we have to wonder what will our jobs look like, not just tomorrow or five years from now, but going forward,” he observed during the Americas SAP Users’ Group (ASUG) Webcast “Business Relevance for IT: Best Practices for Delivering Digital Business Innovation.”

For IT, the stakes couldn’t be higher in this era of extraordinary opportunity, risk, and change. CIOs have no choice but to demonstrate relevance and value beyond the technology it provides – for the enterprise it runs.

From digitally enabled efficiencies to digitally driven revenues

After years of automating as much as possible, businesses are searching for value in the form of data. In essence, digital value creation is moving from traditional assets to the value derived from information about those assets.

“Now we see the emergence of completely new business models – like Uber and Airbnb – and more market capitalization of the pipeline businesses that preceded them,” remarked Adler. “Uber, for example, is worth more today because its business model is based on using data as a revenue source and as a driver of value.”

As these fast-growing, highly disruptive entities prove, monetizing and leveraging data from assets has as much value – if not more – than the assets that generate it. By being digitally driven, the business can move from simply tracking products and transactions to using the data to deliver products as a service. Eventually, IT will need to bring insight-driven innovation and intelligently determine when and how to use the product to provide the best results and outcomes to the customer.

Take a provocative stance against digital disruption

Success in today’s digital marketplace relies on both a vision for business model innovation and the delivery of effective digital innovations that bring agile, collaborative, and portfolio-based processes. But there’s a problem: 45% of companies worldwide do not consider digital transformation as a board-level concern. They would rather sit on the fence and wait for a competitor to make the first move and then emulate it.

Undoubtedly, those who subscribe to this mindset are doomed to be disrupted over the coming years – and it could even bring their demise. However, the 21% of companies that do embrace an end-to-end digital strategy will perform twice as well with their digital efforts.

Adler believes that “if IT can think about the change that is coming and set a plan to address it, [the function] can help the business avoid disintermediation.” By leveraging innovation in four key areas, the CIO and the entire IT function can increase their business relevance and drive unprecedented value to the bottom line:

  • Ensure problem/solution fit. Apply a simple logic structure to problem and solution discovery through a fast, adaptive, customer-centric, and team-based engagement with the business. In this case, the interaction is not technology-driven, but powered by business solutions that leverage IT.
  • Validate product/market fit. Determine whether the solution has achieved the product or market fit required to prove the solution created can be sold to someone who wants it.
  • Drive demand. Shift the IT landscape to an agile model to get to market quickly and respond quickly to business needs.
  • Scale for efficiency. Start at the beginning with the customer of the business unit and determine whether a framework of build, measure, and learn has been applied to the innovation and business model. Find opportunities to make the user experience more efficient and sell the product as a service.

Partnering early, iterating cross-functionally, and taking on the less-technical role of business management consultant enables IT to find context when engaging with every line of business, get familiar with planning elements, and create a company-wide digital strategy. And through such efforts, IT will find business relevance – even as the digital economy continues to evolve and reimagine everything in our world.

What is the business relevance of your IT organization? Watch the replay of “Business Relevance for IT: Best Practices for Delivering Digital Business Innovation,” one in a series of Webcasts examining perspectives, best practices, and advice on digital transformation hosted by ASUG.

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Paul Kurchina

About Paul Kurchina

Paul Kurchina is a community builder and evangelist with the Americas’ SAP Users Group (ASUG), responsible for developing a change management program for ASUG members.