If the third platform (social business, cloud, and big data and analytics) is the nirvana of digital opportunities then digital transformation is the journey that organisations must trek to get there.
In a recent IDC survey 72 per cent of 220 New Zealand organisations said they were midway into or had already completed their digital transformation journey. This is an extraordinarily high assessment of maturity and New Zealand organisations must be congratulated on having such a positive outlook.
The reality is that most organisations vastly overestimate their maturity when it comes to the adoption of technologies, and the digital transformation journey is no different. Here’s why:
First, legacy infrastructure technology still accounts for at least half of most of New Zealand organisations’ ICT resources. Companies focusing on legacy identify themselves as optimisers (ICT for efficiency). Paradoxically they also have the highest opinion of their stage of the transformation journey. In contrast the pioneers of transformation (creator and opportunists) have the lowest opinion of themselves, and ironically are the best grounded in reality.
Secondly, digital transformation is a team sport but most projects are still undertaken on an ad-hoc and uncoordinated basis. The results are not adequately measured and ROI is often vague. Digital transformation needs to be measured on multiple scales: Leadership, omni-experience (customer and ecosystem engagement), information management, operational models and people. Most projects only address one or two areas and that is the main reason IDC believe organisations overestimate their maturity.
Thirdly too many are treating digital technology like an “all you can eat” smorgasbord. Resources and energy is wasted on using technology for technology’s sake, rather than a co-ordinated or strategic approach. A classic example of this is digital marketing. Faced with a glut of digital tools, marketers have quickly accumulated a huge portfolio, many for one off campaigns. In general, no thought has been put into the long-term viability of these tools and how they could be effectively integrated into the organisation’s IT ecosystem.
Read more: Tech analysts, diplomats and brokers
For digital tranformers, D stands for discovery not disruption.
Therefore, while every organisation will be different, IDC gives the following advice to CIOs seeking to enrich their digital transformation journey:
Analyse and identify your business’ DNA: Benchmark yourself against the market and implement meaningful metrics. To understand where you need to go, you need to understand where you are currently positioned.
Cast your innovation net wider: Blur the lines of your ecosystem through the use of digital technologies and develop an innovation community, not an IT team. Employees and customers are the most obvious source for innovation but it is vastly underutilised by New Zealand CIOs.
Challenge the norms of your business model: Digital transformers are best prepared and able to adapt quickly to change. For example, processes are automated where people don’t add value. But remember: Digital transformation is not just about enhancing existing processes but changing them and creating new models.
Turn disruption into an opportunity to recreate your business: Disruption is becoming a dirty word due to its negative connotations. For digital tranformers, D stands for discovery not disruption.
Empower at the edge through executive engagement: We all know about customer engagement but is the same amount of effort being put into executive engagement? The digitally engaged executives make a difference. They are more tolerant of risks, grasp how digital transformation adds value and actively engage with the CIO.
IDC defines the digital transformation journey as “a fundamental change to business or operating models through the use of information and communications technology”. In other words, it is not what technology you use, it is how you use it that defines your digital transformation maturity.
It is not an “IT project” and it is not a destination. As your ecosystem (particularly customers) evolves, the “transformative” elements should change and that is how CIOs should set up for this journey.
Louise Francis (firstname.lastname@example.org) is IT spending research manager at IDC New Zealand.
Read more: How to avoid the ‘technology hammer’
Send news tips and comments to email@example.com
Follow Divina Paredes on Twitter: @divinap
Follow CIO New Zealand on Twitter:@cio_nz
Click here to read the Spring 2015 issue of CIO New Zealand
Join the CIO New Zealand group on LinkedIn. The group is open to CIOs, IT Directors, COOs, CTOs and senior IT managers.