A Common Digital Transformation Pitfall: getting stuck in internal IT systems
In most corporate organizations IT is a vital support function. We know IT for providing the technical equipment, being the helpdesk, ensuring firewalls and cyber security, procuring and implementing software. IT is essential to get the machine churning. Yet it is a support function. It is not how the business makes money.
Today, as businesses take on the digitalization challenge, the stature of the IT department is elevated. Leaders turn to their IT heads, for guidance and support. This is, of course, very exciting for IT and they begin with what they know best, IT infrastructure and systems. At its best, this results in automation of processes and upgrades that improve operational efficiency- a good start but hardly scratching the surface of true digital transformation.
The struggles and ultimately lack of significant progress is no fault of the IT leaders themselves but is in fact due to the limited and siloed set up of IT in most organizations. IT departments are not set up to lead major enterprise wide transformations. They have limited scope, are not embedded deeply into the core of the business and are not involved in strategic decision making about the future. Furthermore, they are perceived as a cost burden. Simply giving IT a mandate for digitalization, without addressing these organizational limitations, is unlikely to have the desired transformative impact.
Digital transformation is so much more than ERP systems and internal IT infrastructure. Digital Transformation requires that we rethink everything about our business in light of the new digital technologies. This means reimagining the way we interact with customers, how we deliver our products and services and ultimately our value proposition to the customers.
For this reason, I believe, the transformation needs to be led by the business with the IT department as a key enabler. This does not mean that the various parts of the businesses are running their own disparate initiatives. Instead, we create a system where teams are allowed autonomy yet there is leadership in place with a clear mandate to ensure alignment across the enterprise.
For such a set up to succeed the business will have to become more tech savvy. The leaders need to recognize that every company today needs to be a software heavy, high tech, company. We can no longer have separate software development departments, but developers, data engineers and IT experts need to be part of every team. Leaders don’t need to become experts in digital technology but they do need to be up to speed on the technology trends and how they may impact their business. They need a curious growth mindset, in which they challenge themselves and the teams to apply new tools and technologies to achieve better results and develop entirely new business models.
All this is easier said than done. But it is possible and is being done by some of the most transformative companies around the world. It requires commitment, clarity and focus from the top.
What do you see as the biggest challenges to transform in your business?
