The start of a new fiscal year is upon us. About three months remain for business leaders to neatly wrap up their 2018 goals and prepare for a new year full of new possibilities. So, time for a gut check: how are your digital transformation plans coming along?
According to a new report from IDC published in partnership with Avaya, only 19% of companies believe their transformation efforts are enabling them to truly lead or disrupt their markets. At the same time, a new study from Spiceworks confirms that 40% of companies plan to increase funding in 2019 to upgrade old systems and infrastructure. That means twice as many organizations are ramping up IT budgets (drastically I might add, at an average increase of 20%) with the likelihood of less than half seeing digital transformation success. For those unlucky organizations, this is a challenge at best. At worst, a path to implosion.
Now well into their transformation journey, many companies are realizing the need to readjust to better align expectations with outcomes. Sound familiar? If so, consider examining the relationship between your organization’s IT and LOB leaders, particularly when it comes to ownership of transformation efforts.
Consider IDC’s study: while IT and LOB agree on core aspects of transformation like primary drivers and potential impact, the two are notably misaligned in terms of ownership and success to date. Over 90% of IT respondents believe they “own” DX, with 86% believing their organization’s transformation to date has been “extremely successful.” Meanwhile, only 54% of LOB leaders feel they have ownership, with 78% believing they have seen success.
Nearly every digital transformation—dare I say, organizational—challenge is a product of this misalignment. Progress will be stunted, for example, if IT is focused on siloed technology developments while LOB is working to drive company-wide modernization. Or, if IT is working carefully in the early stages of infrastructure development while LOB is focused only on getting things done fast. Alignment between IT and LOB is critical for successful transformation, period.
So, how can business leaders start narrowing this bridge? First, consider a few questions in line with the current state of your organization:
- What department in your company is responsible for driving digital transformation initiatives?
- What are the primary drivers behind your organization’s decision to take on these initiatives?
- Overall, how successful has your organization been in meeting its digital transformation goals?
- What has been the impact of your digital transformation initiatives on each of those goals?
Use these questions to gauge your current level of IT and LOB alignment. Management should also answer these questions to identify gaps in perception and understanding at the executive level. If there are gaps (it’s OK if there are), here are some steps that can be taken to reposition for 2019:
1. Develop LOB ownership opportunities: Digital transformation may be a fundamentally tech-focused initiative, but that doesn’t mean IT should have full ownership. Organizations should work to integrate LOB into decision-making to execute on a shared transformation vision.
For example, LOB could take responsibility for influencing high-level innovation while IT works to implement key systems. Or perhaps LOB can increase control of the tech budget, which remains consistently within IT. The bottom line is that IT is no longer quarantined within the enterprise. This team must work closely with LOB leaders to examine business needs in line with IT capabilities and strategic possibilities.
2. Increase collaboration: When it comes to digital transformation, IT can be quick to say, “We’ve done our part,” leaving it up to LOB leaders to determine where and when to start deploying new systems. Transformation is enterprise-wide and must be a team effort. Companies cannot have a siloed approach (ironic, considering that “eliminating silos” is one of today’s top transformation goals).
Collaboration must increase between IT and LOB, whether that means IT having more involvement in LOB technology purchases or CIOs being more consultative to understand the problems that different business units face (consider that 80% of LOB leaders view CIOs as strategic advisors, according to IDG’s “2018 State of the CIO” Survey). Maintaining a transparent and collaborative relationship is key for driving desired transformation outcomes, which leads me to my next point …
3. Understand desired goals: The differences in IDC’s ratings between IT and LOB suggest dissimilar transformation goals. LOB leaders, for example, may correlate transformation success with customer-facing outcomes whereas IT tallies the progress that’s been made in infrastructure development. If success is being measured in different ways, expectations will not be met.
So, how can organizations recognize and understand different transformation goals? Consider a recurring workshop where LOB and IT leaders discuss digital transformation initiatives as they relate to services within specific lines of business. Or, have IT occasionally join LOB meetings to gain a better understanding of goals, concerns and issues. The bottom line is that time must be invested by both IT and LOB to better understand business outcomes that add value.
4. Leverage IT’s positioning: The IT organization holds a novel position in that it has visibility of the entire business model, from campaigns to cash to support functions. This department has a finger on the pulse of every touchpoint along the customer and internal user journey, and it’s important that this is strategically leveraged to maximize success. Long gone are the days of IT throwing applications at something and simply hoping for the best, living with inefficiencies until someone is ready to make changes.
IT should use its bird’s-eye view of the enterprise to work with LOB leaders as one unified team, listening in real-time to both customers and internal users while proactively moving to help make real gains. I understand this paradigm shift is easier said than done—it requires breaking down long-standing hierarchies and using relationships to transform the organization—but it’s a necessary pursuit.
You want to make your budget work harder for you? See better digital transformation results faster? Get IT and LOB to work more closely together and communicate more effectively throughout the entire transformation. By realigning IT and LOB in the above-mentioned ways, I guarantee you will more confidently position your organization for digital transformation success in 2019 and beyond.
Watch Chris’ interview with The Real-Time Enterprise: Digital Transformation is More Than NPS
Chris McGugan is SVP, Solutions & Technology at Avaya, leading Avaya’s technology strategy development to guide future investments. Chis is also a board member of many technological organizations around the world including Myplanet, Clearly Communications, OpenMethods, and Fonolo.