The pandemic has shown that digital transformation is no longer an option but a necessity to sustain business in this new normal and next normal. With 98% of organizations in the middle of a digital transformation or planning to undertake one in the next year, laying a strong digital technology foundation has never been more important. Surprisingly few IT organizations are in the driver’s seat of their organization’s digital transformation journey, which means that if you’re an IT leader who has been entrusted to navigate or course-correct your digital transformation roadmap, you’ll need a tested and proven approach. Here are six strategies I learned from my own work with clients across a range of industries that will give your IT organization a head start.
Know Your IT Landscape
There may be a strong desire to modernize your technology stack, but until you understand the IT landscape of your organization, it’s impossible to know where to start. Map your current state by creating an up-to-date application inventory that captures inputs like business, technology and risk parameters.
You can then leverage your inventory to perform an application portfolio rationalization exercise. The objective should be to simplify, modernize and de-risk your applications portfolio. As part of this exercise, assess your applications for value and risk, identifying opportunities that will produce outcomes associated with your objectives.
Target the Right Business Functions
Digital transformation shouldn’t happen everywhere, all at once. With a wide range of business functions supported by clusters of business applications, knowing which part of your business to focus your digital transformation efforts on will ensure immediate success stories that can translate into broader support for future initiatives.
I’ve found Gartner’s pace-layered application strategy to be instrumental in identifying business functions ideally suited for digital transformation. It classifies IT systems into three layers: systems of record, systems of differentiation and systems of innovation. To get the most bang for your buck, I recommend starting your digital transformation with systems of innovation—for example, a personalization engine or a mobile app—because the next competitive advantage lives there.
Calibrate Your Trajectory
Regardless of whether you’re looking to make a significant investment in digital transformation or pursue a more conservative approach, your strategy must align with your trajectory. One-size-fits-all digital transformation simply doesn’t exist, which means that your approach will be unique to your situation.
One client I worked with, a large industrial automation company, took a high-angle trajectory in getting over the digital hurdle. Heavy investments in core digital capabilities enabled the company to support multiple business use cases as they came in.
Another client, a logistics company, took a narrower approach. IT worked with the business to identify a high-value business use case—the need for a 360-degree view of the customer—then invested in the digital capabilities necessary to realize the plan.
Some companies opt for a hybrid approach, laying out and executing a multi-year transformation roadmap to build core digital capabilities while prioritizing immediate, high-value use cases. With a strategy and trajectory that complement each other, digital transformation can proceed at a pace that’s feasible for your company.
Broaden Your Tech Stack Horizon
I recommend that organizations seriously evaluate and include open source technology and toolsets as part of their software strategy to support digital transformation. I’m not the only one; 69% of IT professionals say that open source software is either extremely or very important. In fact, many organizations have an “open source first” strategy to realize the benefits of collaboration with the larger global community of users for a faster time to market and greater productivity within their own teams. For the large industrial automation client mentioned above, embracing an “open source first” strategy delivered significant gains in innovation and efficiency.
Create an Immersive Learning Environment
Classroom training alone isn’t enough to foster a sustainable cultural shift toward new ways of doing things. While there are different strategies to encourage adoption, immersive learning, or dojos—a Japanese term that means “place of the way”—can provide an extremely effective sustainable learning model for diverse teams. Dojos offer a dedicated physical or virtual space where agile teams can come together to work and deliver sprints under the guidance of dedicated coaches. This experience can help teams rapidly learn and embrace Agile and DevOps principles and new skills. Organizations looking to make a big digital leap need to promote the kind of collaboration that dojos and dojo consortiums help drive through their immersive learning techniques. A large retailer used this approach as it drove a fast-paced cultural shift from legacy to digital with the existing talent pool.
Be Prepared to Track and Adjust
Organizations need to be able to continually adjust and adapt to ever-evolving requirements and an increasingly higher bar of success. One global airline I worked with did this by establishing a data-driven continuous improvement (CI) organization with well-defined roles and responsibilities. For sustainable improvement, leverage a CI framework and tools to establish processes to identify, prioritize, measure and report continuous improvement. Use CI metrics to continuously track performance improvements and make necessary route adjustments along your digital transformation journey.
Jumping into digital can be daunting, especially for those who already feel behind in the process. No matter where you are on your journey, digital transformation should be driven by your business strategy to achieve a competitive advantage. With the right strategies and frameworks in place, any organization can be successful.
SVP, Strategic Accounts