Scott Glenn, Partner and Lead of US CIO advisory group, BearingPoint, says CIOs need to drive the C-suite to welcome transformative change.
Caught between managing the migration of legacy IT systems and battling against skeptical leadership teams, it has never been a tougher time to be a CIO.
As many organizations’ legacy IT systems are reaching the end of their lives, change is business-critical and Digital Transformation is shifting from a ‘nice to have’ to ‘necessary to exist’.
With every company now running on technology, regardless of size or industry, it’s imperative to have a digitization plan. Unfortunately, there is no one answer to achieving IT transformation.
As the Lead of the US CIO Advisory Group at BearingPoint, I have been involved in many Digital Transformation projects and had the privilege of advising the CIOs responsible for managing them. After 30 years in the business, I’ve distilled some key learnings from my time in the industry down into five common pitfalls to avoid for any CIO tasked with the daunting challenge of a Digital Transformation project.
- Focus on what is possible tomorrow, not what is happening today
One of the biggest traps that businesses fall into when starting out on their Digital Transformation journey is focusing too heavily on their current operations. Transformation means change and it is no surprise that internal teams are often initially resistant to this. There is comfort in familiar processes and systems, after all. However, to get to the next level, disruptive change is necessary, meaning CIOs need to help internal teams get comfortable with stepping out of their comfort zones.
To break this tendency, CIOs should begin by envisioning the future. They can start by considering key factors such as industry benchmarking, business operations across the entire value chain and the needs of internal teams and customers.
- Don’t be afraid to make significant changes to achieve your goals
Successful transformation projects can prompt internal discomfort as they shed light on areas of dysfunction or inefficiency. On occasion, all it takes to fix these are small-scale low intervention changes. However, CIOs tackling Digital Transformation should be ready for the reality that radical change, even a full organizational redesign, may be necessary – and broader leadership teams should be prepared for this too.
There can be a tendency among those businesses more resistant to change to say: “We’re different, that won’t work for us”.
Twenty years of working in consulting has shown me that no business is really that different. There are nuances, but the fundamental challenges that businesses face are the same. When faced with initial resistance, consider having a broad group involved to evaluate software. This helps the user community to understand what can be achieved with the right technology.
At BearingPoint, we often have clients review between four to five different solutions just to drive home the message that there is a significant gap in how users work today versus what those powered by modern solutions are capable of.
- Avoid cost takeout and defining tech spend as a percentage of revenue
Many organizations determine IT budgets as a percentage of revenue. This view, along with cost takeout, is long overdue to be consigned to history. Businesses will find that targeting a specific percentage will stunt the progress and outcomes of transformation projects.
Instead, CIOs need to embrace the idea that every company is now, to some extent, a technology company. Rather than framing technology as an investment, businesses need to get comfortable with the idea that technology has the potential to be a revenue enabler.
To help tackle this internally, we encourage clients to split budgets into three main buckets:
- SaaS subscriptions – while IT should govern SaaS internally, costs should be distributed across individual business functions
- Emerging technology – The leadership team should look at emerging technology as an investment and focus on the value it can deliver
- Legacy systems – If there needs to be an element of cost takeout, it’s here. CIOs should look to explain these costs in terms of business value and identify levers where possible to help reduce spend.
Consider customers and employees when building new systems
Optimizing customer service dominates the objectives of Digital Transformation projects.
While enhancing a business’s interface with its customers often has the most significant short-term impact on ROI, it is a common pitfall to ignore internal operations, as the long-term impacts of a better employee experience can be equally significant.
Businesses with outdated technology often struggle to hire and retain talent.
I was recently working with a client whose organizations’ outdated systems were hindering his ability to retain new hires.
They would walk in and immediately want to leave as they were unwilling to learn how to navigate outdated systems.
Employees know what systems they could be working on at a competitor so won’t hesitate to find an alternative with more efficient internal processes.
As part of an agile development process, CIOs should build in time to test out the interface with relevant user groups – internal or external.
Combining this approach with regular feedback and updates will result in a well-rounded and inclusive platform.
Shift resources to focus on strategy
Traditionally, organizations using a ‘Plan-Build-Run’ model allocated under 10% of staff to ‘Plan’ functions.
In Digital Transformation, increasing investment in these resources is crucial. Critical roles which can deliver significant efficiencies and value to transformation projects include Solution Architects that focus on end-to-end value chain processes.
Designing with the full process in mind, not just from a functional view, helps avoid siloed systems. Data Architects will focus on the enterprise data model to bring consistency across multiple business units and help to reduce technical debt by leveraging APIs rather than copying data from system to system.
Beyond technical implementation, CIOs benefit from appointing an internal liaison between leadership and technical teams. This liaison can educate internal teams on technology’s transformative impact, promote asset reuse and oversee technology purchases – ensuring informed decisions are made and the right diligence is performed.
In an environment dominated by businesses wanting to embrace Digital Transformation and SaaS solutions, it can be hard for CIOs to know where to begin.
However, if armed with the right internal resources, strong alignment and governance with their business units and leadership teams, processes that allow them to move fast and the right service delivery model, CIOs can navigate the choppy waters of Digital Transformation without fear of sinking.
