How do you deliver digital transformation and keep the lights on?

How do I deliver digital transformation and keep the lights on?

It’s a challenge that unites CIOs everywhere: how do you fund and resource a transformation programme without impacting the day to day running of the organisation?

At ImprovIT, we work with a wide range of industries and sizes of organisations, and so we have a bird’s-eye view of how best to approach this. We’ve written a detailed article you can read here, but if you’ve only got time for the summary now, you’re in the right place.

What proportion of your budget should you allocate to transformation?

The best place to start is to think of your budget as containing three broad buckets: running the business; growing the business; and transforming the business.

The proportions in each bucket are unique to every organisation and will depend on two main things: industry sector and appetite for change. However, we’ve found that if you take all industries, and all categories of companies, typically they will allocate their budgets in the following way:

• Run – 65%
• Grow – 25%
• Transform – 10%

What needs to be in the transformation budget?

Gauging the transformation budget is complex and will depend on a number of factors, including

• the specific type and degree of innovation (have others been there before?)
• the underlying technologies involved (do you have experience of them already, or are they new to you?), and
• the speed of the transformation (are you an experienced Agile shop, do you have the capabilities required already available?).

How do you fund transformation?

Once you’ve decided what proportion of your budget you should be spending on transformation, the obvious next question is ‘how do you fund it?’

We always start by looking at whether you’re spending the right amount on running and growing the business. There’s no value in over engineering the basics; you're aiming for cost efficient, effective, but not overly complex.

Almost all your competitors will have very similar run and grow capabilities – it's typically the innovation that distinguishes you from them – and so we can use our benchmark and market data resources to compare our clients to their competitors and to other similar organisations using the same type of technology. Then, using gap analysis, we can identify where they could optimise.

We can then identify how much they could save, which is of course candidate money for injection into the transformation part of the budget.

It’s all about getting a bigger return on the pounds you already spend.

Demonstrating value for money to the CFO and CEO

By comparing the likely transformation spend to the potential savings available through optimisation of the run and grow segments, the difference can be quantified and then considered against the potential benefits as part of a formal business case.

Having a fact-based business case built on hard market data is a powerful lever for enacting positive change, and when that’s allied to a detailed optimisation case that illustrates the value delivered by current investments, you’re in an ideal position to move things forward.

To read the full article, please click here.

ImprovIT are an independent business and technology consultancy. We were founded by former colleagues of Gartner, IBM and HP to help senior IT leaders make the critical decisions that will maximise their technology investments. We're completely independent and impartial specialists in the use of IT Measurement, Modelling and Benchmarking. Learn More