Digital Transformation Starts With Organizational Transformation

Embracing digital transformation is more than just setting up an innovation lab and/or moving a few applications to the cloud. Really embracing digital transformation requires a cultural shift and new ways of thinking about business, technology and innovation. These changes will be difficult without addressing enterprise organizational structure, roles and hierarchy.

The TechVision Research report released last year called “The End of EA and IT as we know IT” described a new model for IT and business reflective of the need for an adaptive, business-centric approach to technology and innovation. My blog last summer on this topic called The End of EA and IT as we know IT received a lot of thought-provoking comments, debate and deeper discussions about how IT and enterprise architecture need to evolve to support innovation and better integration of IT with business units. In this article, I’m incorporating elements of TechVision’s recent research and client engagements and recommending how to structure an organization to rapidly leverage new technologies, embrace innovation and prepare an enterprise for digital transformation. 

A key element of digital transformation is to reduce business/IT friction and improve its reaction time. The movement to a cloud-based infrastructure provides an opportunity to better integrate technology with core business needs. 

A powerful way to initiate this transition is to start from the top by replacing the old CIO style organization with a role we call the Chief Innovation Technology Officer (CITO). This can be used as a catalyst to form a new organization, which injects innovation into the enterprise, provides governance through a set of functional mangers, assumes responsibility for IT Procurement, and drives the forced obsolescence of legacy applications and infrastructure. Key goals for the CITO are:

• Leading the required cultural change within the enterprise itself
• Providing the policies and governance that protect and advance the needs of the enterprise
• Ensuring technology innovation is properly addressed

We suggest dissolving most IT into the Line of Business (LOB) units via the idea of Business Integrated DevOps (BIDevOps) teams as a critical next step. We introduce the idea of BIDevOps to drive a highly integrated collaborative form of the DevOps model, now managed by product managers in the business units. These ideas represent the means to reduce friction in an enterprise, empower the LOBs, and improve agility in the Digital World. This is what is really needed to leverage technology at the speed required today. A look at our proposed enterprise organizational model follows:New Organizational Model for Digital Transformation

Digital Transformation & Innovation Model

Note that the Chief Privacy Officer (CPO) and Chief Information Security Officer (CISO) weren't included in this chart and we highly value their roles, but their placement tends to vary by industry, compliance environment and risk profile. We generally recommend they report to the CEO or as high in the organization as possible.

I'll close by describing a set of principles and a steps to take towards better integrating business with rapidly evolving technology. This effort starts with a "business innovation" mindset embracing innovation and rapidly executing and iterating on these business-centric uses cases via a nimble results-focused team. As organizations move to a more innovative, distributed model it will be critical to establish a governance layer to choreograph these efforts with regular feedback to ensure business results.

Path to Enterprise Digital Transformation

There is no magic pill that will instantly recalibrate an organization that has century old processes for the changes necessary to take full advantage of the opportunities associated with true digital transformation. That said, having an organization structured to better embrace innovation, rapid development/deployment and focused on business results is a great starting point. The key organizational changes described here include a senior IT/Innovation leader called the CITO and the BIDevOps which is critical in linking the business needs to the technical path towards achieving those goals.

Further information, research or support for structuring your organization to take full advantage of the opportunities to innovate and disrupt can be found at our website TechVision Research and a complimentary 15 page excerpt from our full research report can be found at Organizational Transformation is the key to Digital Transformation

Good luck and please provide any thoughts or feedback you may have.