How Not To Fail With IT Transformations
I’ve recently read an article by Forrester titled, The Sorry State of Digital Transformation in 2018, and apart from the click-bait title, it really resonated with me. Digital and indeed, IT Transformation appears to be the buzzwords of this last decade. It’s great, and perhaps not at all surprising, to see that Forrester has identified a significant problem with the state of ‘IT transformation’. But what to do about it?
This problem exists because “IT Transformation,” in any meaningful sense, does not exist except in the context of an IT enabled business transformation. And, yet companies continue to spend on massive IT projects, unsurprisingly coined ‘IT Transformations,’ with little involvement and even less understanding from business leaders. Usually, this ends in unhappy customers and missed financial targets. In the most extreme cases, you end up with existential fiascos like the recent TSB bank failure.
But it is not all bad news! There is a way to be successful and many (though sadly not most) companies are making significant progress. The key is collaboration, and an understanding that transformation is something IT does with the business, not to the business.
At Virtual Clarity, we believe the solution is very simple:
- IT transformations only happen in the context of a business transformation
- The metrics and techniques which guide successful IT-enabled business change are very different from those of traditional IT projects
- A focus on business outcomes and the end-to-end operating model is critical, whereas IT tends to focus on tech, functionality, and narrowly on cost
- Enterprise Value growth, not IT cost reduction, should be the financial goal
-Someone in the business, who is trusted and held accountable by the heads of the business, needs to have a meaningful (not rubber stamp) leadership role in the programme, and a real stake in the outcome.
Quite simply, and perhaps controversially, IT is too important to be left to IT. The companies that see this clearly are the ones that make a success of it; not only the usual names from the digital economy (Uber, Netflix, etc) but enterprises like PNC Bank, Capital One, and Philips who adopt the right way forward.
IT Transformations Are Not A Cost Cutting Exercise
If all you’re trying to do is take cost out of the IT line without otherwise troubling the business, then you are not doing transformation and you will have limited success. Clear thinking, straight talking: IT done right is an investment, not an exercise in cost reduction.
If all your metrics are about IT cost, performance, uptime, and some vague tip of the cap to ‘business alignment’ then you are doing it wrong. IT transformation is something that must happen as part of a specific go-to-market plan, if it is to command the attention that is needed to succeed.
Real transformation means taking managed risks, which is the premise of every business. Traditional IT approaches seek to eliminate risk, and in so doing actually only take control and agility away from the people who need to make the investment decision.
In a time where rapid change is happening at a rate never before seen in the history of the world, the only strategy that is guaranteed to fail is not taking risks. What side do you want to be on? Have the conversations and lay the ground work for disruption. If you think that the same checklist risk and security approaches that kept businesses off the front page (in a bad way) in the early 2000s will keep them safe as the business becomes digital, being inevitably pulled into online customer and supplier relationships, then you had really better talk to us.