A Common Digital Transformation Pitfall
Nada Ahmed
Climate Tech | Top 50 Women in Tech Award | Board Member | Author & Keynote Speaker
In most corporate organizations IT is a vital support function. We know IT for providing technical equipment, being the Helpdesk, ensuring firewalls and cyber security, procuring and implementing software etc. 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 clunky processes and upgrades that improve operational efficiency- a good start but hardly scratching the surface on 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?
(For more of my thought on Digital Transformation check out this blog post: https://www.dhirubhai.net/pulse/digital-transformation-where-we-half-decade-later-nada-ahmed/)
Design Automation Enthusiastic
3 年Readiness to accept the change is a biggest challenge. And there is some what fear in accepting, because of multiple reasons, one reason I could see is doubt.
Senior Manager Digitalisation hub Mumbai
4 年Great article Nada. In my observation companies are yet to realise that digitalisation is in a sense ‘transformation’ of your processes as well and not a ‘one time activity’. And to bring that kind of change we need top leadership drive and engagement. The IT and digital champions from domain and digital tool expert need to collaborate together in making sense of this ‘digital transformation’. Conscious efforts are needed to establish a new ‘digital culture’ in organisation. Employee training and awareness will play a big role in getting the digitalisation as we say ‘under the skin’.
Project Director ADA 2.0 Aker Solutions and Modification Manager within ADA 2.0
4 年In my opinion we have just scratched the surface of what is possible. IT and business and top management alignment is a start as they represent a big part of the solution. Just that is a big stretch today in many traditional settings. Growth mindset is definately needed but also that requires quite a bit of exposure to the potentials to get going. To really change the business model a lot more is required - change, drive and appetite at all levels, quick wins that sell, hard wins that sell even more, a complete uprooting and renewal of old systems, mindsets and ?cannot do’s?. The ?what’s in it for me? cannot be sold on power points, it must be shown and implemented before people believe it. The investment and commitment required is high but so is the gain. IT systems will have shorter life spans and fewer lock in situations going forward, data sharing compulsory and data must replace documents. Just to get away from documents as the carrier of information is a real challenge and one that is threatening to stop the digital flywheel. So having people, adaptors, that understands the combination of business, IT and process is maybe what is at the core so that decision makers get the best advise and understanding possible...
Vice President, Account Management, Aize
4 年...3. A few years back many of the traditional shops where we used to buy clothes, shoes etc. started their own web shops to ensure that they also could sell their stuff on the online market. Later we have seen much larger online dealers that focus on the logistics part - making sure they got what you need more than promoting a specific product. I guess my take from the above examples is that the ones with success focuses on improving the customer journey (Airlines and Amazon as examples). Not sure the customer journey optimization is something for IT to manage alone...
Vice President, Account Management, Aize
4 年Nada, I reflected a bit on this and 3 examples of digitization came to mind: 1. I travel a lot and enjoy the convenience of the digital thread from booking of flights, hotels, rental cars or cabs. I also remember how it used to be, standing in line to buy a hand written flight ticket and the time spent in the car rental to fill out paper forms, when I was already late for a meeting down town... 2. While I was studying (and living on a tight budget) I remember how we would NOT order tickets digital when they first launched that alternative. Why: They claimed an extra fee to book digital as it was seen as a financial burden for the cinema to entertain the manual ticket office while simultaneously develop and invest in a digital alternative. Later you could say that cinemas are being replaced by things like Netflix... At least in the Covid world. ...