IT And The Small And Midsize Business: Separated By Digital Priorities

Hernan Marino

Part 7 of the “Leading Through Digital Transformation series 

Every day, we hear remarkable stories of businesses disrupting entire industries. They introduce new business models or transform their own. They raise the bar on the customer experience and reinvent product and service delivery. While meeting these expectations requires a new mindset, recent research suggests IT managers and business leaders from small and midsize businesses may not value such disruptive change in the same way. 

According to The Economist Intelligence Unit (EIU) study “Digitising IT: Catalysts for Growth,” 71% of IT leaders from small and midsize businesses rank digital initiatives highest or relatively high in priority, while only 57% of non-IT leaders responded the same. Such disparate attitudes can be mainly attributed to the overall focus on the business – especially when you consider that 63% of small and midsize businesses are less concerned with digital transformation overall, compared to 76.6% of their larger rivals.

More surprising, the report also indicates varying views on the primary objectives of digital transformation that are reaching deeply across technical and nontechnical areas. For example, IT leaders are more focused on using digital technology to improve products, services, and customer experiences, while the business side ranks improved use of data and information at the top of their agenda.

 Question: Which of the following are the primary objectives of your organization’s digital initiatives?  

Priorities IT Non-IT Difference
Improving the way our employees work and collaborate using digital tools 16.87% 32.14% -15.27%
Improving the way our organization uses data and information 34.94% 46.43% -11.49%
Improving the experience we offer customers and partners 39.76% 30.36% 9.40%
Improving our products and services using digital technology 42.17% 40.18% 1.99%
Transforming our business model 30.12% 13.39% 16.73%
Transforming our operating model 33.73% 36.61% -2.88%

Source: Digitising IT: Catalysts for Growth, The Economist Intelligence Unit, 2016.

The data is clear: IT and lines of business need to be on the same page when it comes to digital transformation. And for IT leaders, this challenge signals an opportunity to raise their status from keeping the lights on to catalyzing a strategic evolution of the strategy and focus of the business. 

Turning digital differences into leadership opportunity

One explanation for divergent digital transformation priorities is that every business leaders is playing a part in digital transformation – but only in the context of their specific business area. In fact, the EUI study suggests that digital initiatives are most commonly driven by individual departments with IT playing a supporting role. Yet, IT could do more to engage and guide the rest of the company to ensure people and processes are aligned with their executive peers’ strategy.

Here are three ways IT can elevate its leadership and expertise in the digital transformation discussion:

  • Relate the IT agenda to business strategy: In every digital initiative, three IT priorities are generally relevant: security, scalability, and integration. Driving these priorities home with business leaders throughout the transformation will ground every effort – no matter how small or big – with a clear strategy and outcomes that are measurable and specific.
  • Innovate to help the business evolve: Most digitization efforts center on creating specific experiences for users and customers. This focus challenges IT to innovate new technology and capabilities for the entire company. In turn, different skill sets, tools, and mindsets should be adopted to allow the firm to grow beyond business as usual.
  • Realize that all business areas – even IT – are eyeing the same goal: Everyone at the leadership table has the same objective in mind: to build and maintain market leadership. However, if the foundation of your digital transformation is not secure, optimized, and effective, the firm will never fully realize this vision. 

It’s time to play a critical, strategic role in digital transformation 

One of the luxuries of my job is seeing first-hand how our customers are seizing this opportunity. For the most part, IT leaders from small and midsize businesses are improving how they currently operate, create new business models and sources of value, and lead their business ecosystems. They are using our solutions and services to create a digital business platform and road map to shape their foundation for agile engagement with business stakeholders and in-the-moment outcomes.

While all of these developments are exciting, I am more amazed at how the IT organization and the perception of IT leadership are evolving. IT leaders are increasingly rising in strategic prominence. They are not only are keeping the lights on, but, more important, they are securing a strategic role within the core leadership team by driving business-wide transformational insight, action, and innovation.

What’s their secret? It’s the realization that digital transformation is an opportunity for the entire company to unite under a shared vision. Using IT as the common thread of experience and expertise, small and midsize businesses are realizing a digital vision that builds industry-disruptive competitive advantages.

To learn how your business can embrace the promise of the digital economy, check out The Economist Intelligence Unit’s recent report “Digitising IT: Catalysts for Growth.” Be sure to check every Wednesday for new installments to our blog series “Leading Through Digital Transformation,” to explore the various leadership roles in today’s growing small and midsize companies.

Hernan Marino

About Hernan Marino

Hernan Marino is Chief Operations Officer of marketing and Global Head of SME/Partner Marketing at SAP, the market leader in enterprise application software. SAP (NYSE: SAP) helps companies of all sizes and industries run better. Hernan leads SAP Marketing’s digital transformation, marketing automation strategy and SAP’s growth plans in the SME marketplace.