What CEOs Should Know About IT and Digital Transformation

Ingrid-Helen Arnold

It’s often said that in the digital economy every company has to become a software company, as if the key to transforming your business is to introduce the developers in your IT department to your product designers and engineers. But the shift is more fundamental than that. Just as startups are challenging established business models with goods and services that mesh digital and physical worlds, technology must be intertwined with every business process.

Digital transformation demands a whole new mindset—one focused on radical process simplification and alignment of the right technology with your business strategy. How extensively an enterprise can transform is limited only by the imagination of its people and their willingness to accept change.

To lead this transformation, you must adopt a philosophy based on three underlying principles.

1Technology and Processes Must Converge

Digital transformation relies heavily on enabling an organization’s employees, partners, suppliers, and customers to interact without friction. By immersing yourself in every aspect of the business, you can experience firsthand both the daily successes and the pain points throughout the value chain. With that knowledge, you can determine which technology solutions and process changes will make life easier and better for everyone in your business network.

Many CEOs see the cloud as an efficient way to drive digital transformation. And it is. But a business has many different processes, and not all of them are equally ready to move to the cloud. Your executive team should focus first on processes that directly impact your customers. Agree on how customers should be served, and then determine which processes should be reimagined to optimize that experience and help the business move forward. The point where new processes and technology converge will catalyze digital transformation.

2IT Has to Trust You

If a CEO has not earned the trust of everyone in the organization, transformation will be a constant fight. That’s because digital transformation is not just another management mandate. It can only succeed by mutual agreement between the leadership team and the workforce. Silos need to disappear, and every business leader must foster connections among employees across functions so they can use their expertise to improve processes.

Engineering does not stand alone. Nor does IT, human resources, finance, or any other function. But the workforce needs to believe that you have set the right direction, that you have empathy for the challenges they are experiencing, and that resolving them will help everyone share in the company’s success.

3Simplicity Is Everyone’s Goal

New business scenarios and ideas for new products, services, and processes are emerging every day, offering new opportunities for revenue and better customer experiences. Even the most common experiences can potentially be transformed.

For example, customers want to be protected from credit card fraud. When I lost my credit card, I learned firsthand about the complexity of alerting the bank, freezing the account, and obtaining a new account number and card. Like any other account holder, I wanted my account secured immediately. Now Discover offers an app that allows consumers to freeze their own accounts with a click of a button. That’s using digital technology to make our financial lives easier and more secure.

You always have to be asking why a process exists and encouraging your teams to look for ways business processes can be simplified using digital technology. The possibilities for changing people’s lives are endless.

Ingrid-Helen Arnold

About Ingrid-Helen Arnold

Ingrid-Helen Arnold is the president of SAP Data Network, the new business unit delivering end-to-end data monetization for SAP and its customers.