Digital transformation is a complex undertaking—even more so than your average run-of-the-mill ERP implementation.
As Panorama grows and continues to work with more large, sophisticated, and global clients, we see more comprehensive digital transformations that go beyond traditional ERP implementations. Along with these projects, we also see several pitfalls and traps that CIOs commonly run into.
One of the biggest challenges is failing to recognize and address everything that needs to be addressed as part of an effective and comprehensive digital strategy. Here are five things that CIOs commonly overlook:
1. Defining an IT organizational strategy.
When done right, digital transformations entail significant changes to your IT organization. Your future state skill sets, people, roles and responsibilities, and reporting relationships should look quite different after your initiative compared to before. Failing to define how you will address the “people” side of the equation will completely undermine your efforts and increase the odds of failure.
2. Opportunities to bust down organizational silos.
While redefining your IT organization, you have an opportunity to break down silos, consolidate, and standardize where appropriate. For example, if you are a larger multi-business unit company with multiple IT groups and departments, you have a real opportunity to use your digital transformation as an opportunity to migrate to more of a shared-services model. Digital transformations need corresponding organizational structures to support them, so be sure not to overlook this important component.
3. Developing an organizational change and workforce migration strategy.
A well-defined and well-executed plan to migrate your employees to the future-state organizational design is a key component of effective digital transformations. Without it, the impact of your digital transformation efforts will be limited to a nice-looking PowerPoint presentation or report. You will need to define a comprehensive and effective plan to migrate your workforce to the future state organization, skill sets, and reporting relationships that you define. This includes organizational change management, organizational design, training, communications, and other tactics to keep workers informed and on board.
4. Improve business processes to drive the technology transformation—not the other way around.
Just as you don’t want to attempt a digital transformation without changing the IT organization, you also don’t want to skip attempts to improve your business processes. If anything, your business processes should drive the technologies you select, how you implement, and how you realize business benefits from those initiatives. Operational improvements should ultimately drive the technological side of the equation. Doing the opposite by using technology as the starting point will inevitably lead to failure.
5. It doesn’t pay to be distracted by emerging technologies.
Many of our CIO clients love to talk about cool emerging technologies. While we enjoy these conversations as much as they do, this can often be a distraction from the more important aspects of your transformation (such as the points discussed above). Which type of technology you adopt is much less important than how you adopt it, how you redefine your business processes, and—most importantly—how it all ties into your overarching business strategy. Don’t get sidetracked or overly enamored of technology along the way, and you’ll be one step ahead of many of your peers.
Whatever you do, don’t overlook these key components of your IT strategy. A well-defined strategy and a solid plan from a well-respected and independent digital transformation consulting firm is an important first step.