Thoughts on Digitalization

I have an international advisory background within Internal audit, Finance and IT and I am very interested in how our world is evolving and not least from a technological point of view.

The world we are living is changing rapidly and humans are always taken by surprise at which pace change can take place.

However, we have a legacy and a culture to consider and to take into consideration.

The future of IT allows for space for the tortoise as well as for the hare. 

Top management has to decide on Growth, Continuity and at which cost!

The boards have to be modernized in able to be able to cope with the new world order and their role is not just one of control but one of discussing and advising top management on how best to carry out their operational responsibilities.

The role of many CFO's are changing today.

A modern CFO have to be able to understand e.g. business-critical processes and which end-to-end processes should be considered vital etc.

The CIO, today, should be focused on exactly what is inherent in the title Chief Information Officer as data, data integrity, data security aso. is business-critical more than ever.

A modern organisation is and should be a dynamic, transparent, agile and not least customer-centric organisation.

A solid foundation for any business is to have a discipline to secure, that no matter what happens, that might negatively impact daily operations, each and every employee knows exactly the role they have

Changes - in order to be effective - have to take place from within and is a top-down dynamic process!

Top management, who is not at the same time majority shareholders, is, normally, under pressure to deliver meaningful change and facilitate innovation.

How should they balance this with the need for business continuity and ensuring ongoing IT security, stability, availability and performance?

 In a transition phase top management must be highly aware of additional risks and even though a CIO should be involved in setting the strategic direction - a transition phase requires also the involvement of the CIO in order for top management to secure a unique operational overview, which also includes taking care of existing systems and ensure that necessary developments and competitive advantages are evaluated and implemented on a timely basis.

The direction of travel for CIOs and the broader IT function is clear. In a digitized world, IT is becoming a powerful business partner – a strategic enabler driving forward key business projects – rather than a mere service provider responsible for ensuring that the lights don’t go out.

A continuous and dynamic assessment of the risks posed by current systems and infrastructure, which will include continuity, cost and growth

Continuity-

Is your business able to operate satisfactory if your legacy system went down, and what would such a failure cost you? Is it worth while to continue to maintain ageing hardware, software which is not supported anymore and do I want to or do I have to invest in people, whom can help me fix my legacy system?

Cost-

Legacy systems consume resources and unnecessary many ressources (just look at the banking sector).

It is important to understand, that the annual cost of supporting a system may even outweigh the cost of replacing it. Next - what are the expenses regarding lost productivity caused by systems that no longer have a real necessary purpose?

 Growth

Increasingly, growing a topline requires a scalability set up that facilitates this growth- e.g. growth into new areas or the adoptation of multi-channel environments.

Transformational efforts should of course be focused on the highest value areas for ones business and simultanuously secure that existing business-critical processes are taken care of.

There is no need to rush things - so incubating and testing new ideas before scaling out is responsible behavior

As an example a CIO can’t afford not to embrace change, given the competitive advantage that cloud-based architectures can deliver as organisations become more agile. However, the CIO have to be sure, that change takes place without increasing the risk of downtime and jeopardising day to day business operations.

Be aware that is poses some great challenges to create a group that works agilely within a company, that works in a traditional way. An autonomous group working agiley in a company can be a very good idea, but it is critical that such a group has a leader, who fully is able to understand and respect the dependencies with the traditional part of the company!

Digital transformation is at its core a profound change that affects an entire company from the CEO to the new receptionist.

According to Gartner: "The risks inherent in building and evolving systems of record are better managed through waterfall, while agile methods are more suited to building and managing systems of engagement" and might I add "customer facing processes"

Market leaders such as Google and Amazon are adhering each of their thousands of services according to its unique default approach, which is "continuous on time delivery"

Advice:

In a transition phase - make sure that you take care of- and listen to the capable, quiet and hard-working people ("indians"), who are the backbone and the reason for the smoothly running of day-to-day operations - who know and master their specific role in the engine room.

In a transition phase be acutely aware of "chiefs", who disclaim responsibility and why? Incompetence is a always dangerous partner and by the way think about how many "chiefs" you actually need?

A genuine "chief" is a great leader for his / her people.

A manager is not a "chief".

I have a strong suspicion that many companies have too many managers compared to "indians" /"engine room heroes" ?????