Change is difficult. This stands true for everyone, irrespective of whether it is in business or any other aspect of life. It is human nature to get comfortable in the current situation and any disruption in the current state is usually met with resistance. Within an organization too, change is always challenging. Over time, people develop a daily routine and established a way of working. They develop behavior patterns that are hard to change. But at the same time, change is not something we can avoid for long.
Organizations have to grow and evolve to survive the ever-increasing competition they face. They are constantly striving to reach a better position. They need to constantly improve their processes, systems and policies to ensure that they don’t lose their relevance in the industry or in the market. That means there will be change. Processes that have become an integral part of the organization, embedded in its day-to-day workings, need to be reassessed. Employees who have attained a level of comfort in their current positions need to upgrade their skills and knowledge to ensure that they continue adding value to the organization.
Although there is always resistance to change, be it from employees or the management or otherwise, everyone wants to be a part of a successful company. If the business case for a change is communicated well and shows how the transformation is going to positively impact the business as well as individual careers within the organization, the transition can be much smoother.
Driving change in an organization
Change can be carried out in small, incremental steps or it can be large scale, involving the entire organization at once. Small, incremental steps leading to change are usually effective when you do not want any major disruption in the current state of the organization. In such a case, making gradual changes over time that finally take the organization closer to the goal can be the right approach. Incremental change should, in fact, be a part of every organization’s culture. In a competitive, making small improvements just to gain a point over your competitors can prove to be very useful in the long run.
But the problem with incremental change is that it may become routine, and, like all other things, people can get used to it which makes them lose enthusiasm. Employees stop putting in effort to make an impact through small changes and that is when it loses its impact. The organization needs to find ways to make incremental change more effective in such situations through innovation and out of the box thinking.
When there is need for a massive transformation in the organization, though, trying to retain the current state and making minor changes is no longer useful. In this case, the organization needs to go for drastic measures to ensure bigger growth. Such a transformation, or revolution, is usually necessary when an organization is barely hanging on to its life and needs something big to revive it and bring it back on track. Transformation is also necessary when an organization needs to overcome its inertia, change its legacy systems and introduce new technologies and processes to get back into a more competitive position.
Overview of IT transformation
Transformation, be it digital transformation or cultural transformation, is a complete fundamental change in the way an organization functions. A transformation is usually carried out with an aim to significantly improve the organization’s performance. That is why it needs to involve everyone at every level within the organization, to the last employee who has any contribution to the organization’s success. Transformation aims to better align the organization’s goals with the changing market conditions and consumer demands.
When we talk about leading IT transformation in an organization, the term IT transformation itself can be a little misleading. IT transformation does not mean transformation in technology alone. IT transformation has to cover other areas of the business as well. In general, there are three core aspects of IT transformation – people, process and technology. When an organization is undergoing a digital transformation, there will be problems in all of these areas that will need to be detected and addressed before the IT transformation can be successfully implemented. Unless the people are receptive of the changes that IT transformation is going to bring forth, it is not possible for the organization to change. It is the people who collectively build the organization’s culture and for transformation to be fruitful, the culture has to be open to change.
Similarly, IT transformation is not complete unless the gaps in the processes are identified and filled so that the new technology can be implemented seamlessly. And lastly, the technology aspect requires you to identify old, dysfunctional or inefficient technology that is not contributing to the organization’s success as it should. Such technology will have to be replaced by more current, state of the art technology that can take the organization forward.
There are several ways this transformation can be approached, but irrespective of how you decide to bring about the change, the first and foremost step in every method is planning. Any effective transformation model starts with a definite period of planning. During this stage, all the steps to be taken in the journey towards transformation are laid out and a roadmap for the future stages is created.
One of the most widely used planning model is the 90-day plan. Under this model, all the issues are diagnosed and an action plan for implementation of the change is created within a span of 90 days.
How is IT transformation different from digital transformation?
Digital transformation makes changes to how an organization uses IT in its processes or product development/service delivery. On the other hand, IT transformation focuses on making changes to an organization’s IT function. That is, it aims to improve how the organization provides IT services. IT transformation can occur without digital transformation. Digital transformation usually involves updating or replacing the organization’s IT systems.
Best practices of IT transformation
Best practices refer to the most prudent way of doing something. It is a set of guidelines, business ethics, policies, or ideas that define the most efficient course of action in a business and its processes. Best practices are sometimes established by regulatory bodies or authorities governing the working of an industry. They may also be decided by an organization internally in order to achieve its aspired standards.
Best practices may be adopted to meet the industry standards in business or improve compliance with legal or ethical standards. Best practices that a company decides to adopt are usually determined through benchmarking. Best practices are a general framework for everyone in an organization to follow in their day-to-day work. For example, there may be workplace safety requirements documented and communicated for all employees to mandatorily adhere to. It aims to improve the safety standards in the company. Or there may be best practices listed down for each individual function in a manufacturing process to ensure standard quality in the end product.
Best practices are important in business because these practices are established after much deliberation, and trial and error. They have been found to be the most sensible approach to carry out a particular process or task, and ensure the best outcomes if implemented correctly. Best practices aim to make a process better, faster, and more cost-effective. Adopting best practices minimizes the chances of committing mistakes and results in fewer problems during a process.
Benchmarking for digital maturity of the organization
Assessing where your organization stands in terms of digital growth currently is extremely important to be able to set relevant and attainable goals. When you know what digital assets you have at hand, it becomes easier to optimize those assets and maximize their output. Assessment of the company’s digital maturity will help you create a realistic roadmap based on existing digital capability and the capabilities that need to be built.
This can be done through competitive or external benchmarking, to see how your company fares in terms of digital maturity as compared to the industry’s best. This benchmarking should focus on three factors mainly – digital growth, security, and profitability.
Benchmarking for attitude towards IT change
The attitude towards the pace of change in IT is another important factor that determines how an organization will approach and adapt to change. How do employees or management in an organization acknowledge and address the rapid pace of change in IT? Does the organization simply try to overlook IT adoption issues and continue the way it has been functioning for ages? These are some very critical questions that need to be answered.
Compare the statistics you get in your organization in response to these questions with those of some other successful IT-driven organizations to see if there is a need for a massive change in mindset and culture.
Benchmarking for attitude towards the impact and challenges of an IT transformation
Even if your organization is not yet acknowledging it, the pace at which IT is changing is very rapid. It is extremely important to realize how this change is impacting businesses and what challenges it poses for them. How your organization understands the impact and challenges of this rapid change in the IT landscape is an important criterion in your approach towards an IT transformation.
It is essential to benchmark for the challenges that you believe your company faces in this IT transformation with what other companies believe their challenges to be. This will help you find common problems that most organizations face and the approach they take to address these problems. You can decide what additional resources, training or skill development is needed in your organization to carry out IT transformation successfully.
Benchmark for the amount of time and resources spent on maintenance vs transformation
The progress of the IT transformation depends largely on how much time you can devote to innovation. There are different activities going on in an organization. Companies need to maintain and manage their existing IT applications and infrastructure as well. They need to minimize downtimes, apply upgrades to the systems, improve security, and much more. So, how much time does the organization have left for the development of new projects and driving innovation? Achieving the right mix of maintaining the current state while investing in the future is critical.
Benchmarking in this regard can bring to light some interesting insights. It is often seen that most businesses that are not able to successfully carry out IT transformation focus on one side more than the other. They either spend too much on ongoing maintenance or they focus too much on innovation at the expense of day-to-day operations.
But most of the successful organizations are able to strike a balance, dividing their time and resources between both the management of existing technologies/systems/processes as well as the adoption of new ones. Benchmarking can tell you whether your organization falls in the league of successful businesses that have a balanced approach, or whether you are in the same category as those who struggle to prioritize between maintenance and transformation.
Benchmarking and leading practices help organizations come out of their cocoons and see how their competitors or other companies are approaching IT transformation and its challenges. This perspective is very important when you are undertaking a transformation of this scale to help you achieve success at one go rather than having to learn from mistakes and going back to change your strategies and goals every time.
How roles, powers, authorities and responsibilities intersect
There is no perfect organizational structure. The choice of structure depends on the size and type of company, the industry, the organizational culture, and many other factors.
Some organizations work better with a mechanistic approach while others benefit more from an organic set-up. During a major transformation, the advantages and disadvantages inherent in the adopted structure may surface. For example, a company that has several chains of command and siloed operations may experience communication gaps and delays that they can overcome by giving employees more autonomy to make decisions and appointing culture intermediaries/brokers.
A small company with a flat structure should ensure that group participation and sharing of work responsibilities occurs in a systematic manner and within the boundaries of the project goals. The networks of people or team members will still need to be managed and held accountable by the project manager.
As much as possible, the collaborative structures designed for transformation initiatives should avoid the common challenges that impede progress. Barriers to transformation iinclude a backlog of decisions at the top, a restricted view of the organization, unnecessary work and consumption of resources, and an inexact measurement of performance.
With growth, the structure will undergo changes, and organizations may feel tempted to pivot to traditional reporting relationships and reduce employees’ decision-making autonomy. Senior management must assess the impact to corporate and innovation culture before making drastic changes to the organizational structure.
A quick comparison of various organizational structures
• Includes several different employee specializations.
• Its vertical structure allows employees the time to hone and master their skills.
• Simplifies financial analysis, reporting, and data management.
• Employees are clear about their and others’ roles.
• Can create data and communication silos, reducing efficiency and erecting barriers to task completion.
• Can drive up costs in organizations that have a large number of products or cater to different markets, by requiring policies and rules for each.
• Formal hierarchies can hold back collaboration and innovation.
• Supports the quick development and launch of new products (through a products-based divisional structure).
• Allows the development of highly specialized expertise in a particular product or service
• Enables swift and accurate responses to changing consumer behaviors, market trends or developments (through a market-based divisional structure).
• A good model for rapid customization and localization of goods and services, enabling a rapid response to customer needs (geographical-based divisional structure).
• Simplified financial analysis and reporting.
• Difficult to scale and may create siloes, leading to duplicated efforts among disconnected divisions.
• Meant to operate as semi-autonomous groups but higher levels of independence and freedom can have adverse impacts, from a duplication of efforts to weak collaboration and communication.
• Autonomy and decentralization can also give rise to competition, where each individual group works for itself rather with the organizational mission in mind.
• Headquarters may find it difficult to control each division.
• Creates a conducive environment for flexible collaboration and decision-making through multiple chains of command.
• Resources can be allocated based on division or functional requirements, offering advantages of versatility and scalability.
• Supports shared resources and direct communication across projects and divisions.
• Greater collaboration and communication boost innovation and creativity.
• Employees have expanded opportunity to develop cross-functional skills.
• Potential for greater efficiency from an optimal use of resources and less waste.
• Can get complex to manage.
• Multiple reporting relationships can make it difficult to track resource usage and budgetary needs.
• Can introduce ambiguity into reporting, creating financial forecasting and analysis challenges.
• Less accuracy in tracking KPIs as productivity and efficiency is only estimated.
• Can give rise to conflict between different departments and divisions.
• Excessive administration overhead in efforts to resolve conflicts and maintain harmony through meetings.
• Increased perceived (or actual) “red tape” and bureaucracy
• Teams determine roles rather than titles, empowering employees to act quickly
• Leverages individuals’ strengths, interests and capabilities to meet organizational goals
• Faster and better decision-making
• Able to adjust quickly to changing environments
• Can increase transparency and accountability within the organization.
• Reduces control
• Can be difficult to scale
• Can create too much individualism, causing employees to lose sight of the big picture.
• Doing the work can be more complicated as employees struggle with prioritizing where to focus their attention among their many roles
• Criticized for focusing more on processes than people.
• Consensual, democratic decision-making is not for everyone.
Communicating the transformation vision and goals
The IT transformation vision provides a holistic picture of what the organization will look like some time into the future. It guides transformation efforts, inspiring everyone to move forward while reducing conflict by keeping everything in sync across the organization.
A good vision statement for an IT transformation initiative is one that is aligned with the overall growth strategy of the organization. When setting up the vision statement, it is important to take key stakeholders into account. This includes not just stakeholders within the company but also others who will support the vision, such as third-party vendors, customers, shareholders, and more.
The vision statement should be able to create a sense of urgency among the people involved in the transformation effort. By communicating how the vision is linked to specific goals in the company’s future, it should be able to drive everyone to act upon it right away.
A good vision statement should be realistic. People working in an organization for years can tell when the vision is unattainable because they know where the company stands. There is no point in exaggerating in this regard. A realistic, attainable vision is what the company needs because it gives people hope that change is possible.
Common mistakes to avoid when setting a vision for IT transformation
There are several common mistakes that companies make when formulating their IT transformation vision statements, which fail the purpose of the vision altogether. These mistakes are better avoided if you want your IT transformation efforts to bring results.
Firstly, the vision statement should not be just a branding or marketing tool. It is more for internal use rather than for showcasing to the outside world. Setting a vision and not working on it is the biggest mistake any organization can make. By that, we don’t mean that the vision is a binding statement, and all employees must work within its boundaries. The vision should not restrict employees or limit their ideas. Employees should have the freedom to bring forward new ideas that can improve the transformation initiative along the way. The vision should provide the guiding light that inspires people to work for improving the company’s performance.
The vision statement of the IT transformation effort should not be too complicated or vague. It is something that everyone in the organization must understand and absorb. That is why it is important that the vision is easy to comprehend for everyone, irrespective of their background or knowledge. The vision should also have sufficient clarity to provide guideposts to ensure all related project initiatives contribute to the attainment of the envisioned future state.
Often companies are unable to communicate the vision well enough beyond the few stakeholders who are involved in its formulation. Unless the vision is communicated well throughout the organization, it cannot fulfill its purpose. So, it is important that the transformation leaders ensure that each and every employee is aware of, and understands, the IT transformation vision for the company.
Lastly, the vision requires leaders to consider the organization’s status quo. One big mistake that some organizations make is that they set up the vision before assessing the current systems and processes of the organization. A vision that is formulated without this initial analysis may not be based in reality, and may be viewed as unattainable rather than inspirational. Understanding the current IT and business capabilities is extremely important when setting the IT transformation vision and goals.
Setting achievable goals for IT transformation
Measurable objectives collectively help fulfill the goals of IT transformation in an organization. Setting clear and measurable objectives is important for three reasons:
• They create a desire in the people to work for the change by providing something to work towards
• They help in measuring the progress and success of the IT transformation initiative
• They make the initiative scalable
• They target business value drivers and increase your return on investment.
There are certain things that we need to keep in mind when setting these objectives for the IT transformation effort. Here are some of the important aspects to consider.
Transformation approach and strategies
Generally, organizational transformation can take three approaches. It can be data-driven, where the initiative’s sponsor presents a case for transformation based on data-backed reasoning. The sponsor may use an internal expert or an external consultant to analyze the company’s current IT systems and technologies with the purpose of making it more efficient.
The case for transformation is supported by (a) an analysis indicating the feasibility of the transformation, (b) a demonstration showing that the transformation has been successful in similar situations, and (c) a description of the outcomes of the transformation. The rationale behind the transformation and results from it will build consensus among people and encourage their commitment early on.
If the transformation will only impact a part of the organization, or one or more domain-specific business units, then a participative change strategy is suitable. Participative change emphasizes the full involvement of all those who will be affected by the anticipated change. Typically, it calls for not only a change of actions but also a change in the values, skills and attitudes of people. The success of a participative change strategy depends on the extent to which units or departments impacted by the transformation are involved in the targeted transition.
In a compliance-based transformation, the sponsor asserts their authority to make changes with the assumption that the department or units impacted by the change will go along with the plan. Usually, this approach does not consider resistance from affected entities to the change, which makes it less effective than other approaches. The success of a compliance-based transformation plan depends on the influence the sponsor wields, the discipline in the chain of command, organizational culture, and impact on the project sponsor from the departments or business units affected by the transformation.
Companies take a structured approach to transformation, typically following the steps outlined below:
An organization embarking on transformation will have a vision of the future state they wish to achieve. The vision should align with strategic goals and have the support of all stakeholders. Strategy development is about knowing where the organization wants to be, where it is today, and how to bridge this gap. Mapping processes, systems and people that utilize IT systems to deliver products and services to customers will provide an understanding of the current state of the business.
A leadership structure to oversee transformation keeps project participants vigilant and holds them accountable. It will depend on the organization structure for digital transformation adopted (e.g., special projects team). Usually, the CEO is the transformation program sponsor. A technological transformation can be led by the Chief Technology Officer (CTO) or Chief Information Officer (CIO) or any other member of the executive board. An executive with expertise leading or who has played a key role in major change strategies can be appointed to take responsibility for executing the transformation smoothly.
Setting project scope
Clearly defining the functional areas, processes, systems and people involved in and affected by the transformation will aid the development of the implementation plan and set the scope of work after considering all these factors. Managing project scope effectively is critical to realize early milestones and create change momentum. For an organization planning a major change strategy for the first time, this understanding is even more important as they must win people’s support and effectively communicate to customers, suppliers and external stakeholders what has changed and why.
Managing the project
Everyone tasked with delivering the program must be aware of the number of workstreams the project is made up of, how progress will be measured and the reporting mechanism. The executive leading the project and/or team leader of the special projects team will have oversight, but the success of the transformation will ultimately depend on the efforts and commitment of everyone involved.
As mentioned previously, few organizations have the internal capability to deliver business transformation. Therefore, they engage external consultants with a strong background of advising on or leading similar transformations. These ‘interim executives’ can move the transformation forward more smoothly and in adherence to the planned timelines than if the organization were to pursue implementation with only internal resources. A mixed team of internal and external talent can provide the capabilities and perspectives needed to realize the desired outcomes from the transformation plan.
Executing the plan
The project sponsor and key participants should work within the parameters of what is possible with the acceptance that the transformation will likely take several months or even 2-3 years. They should guard against losing sight of the vision, or losing motivation, halfway through the journey. As challenges are inevitable as the transformation progresses, project stakeholders must also be prepared to flex and adapt as needed.
As new system implementations are being planned, consideration needs to be given to any needed integrations to other existing systems, (e.g. financial systems, enterprise content management systems, etc.). The planning needs to include when and if the integrations that exist in current state are needed with the new systems, and whether the integrations are needed on Day One, or whether they can be implemented after the new systems are in place. Missing critical integrations can lead to a poor user experience and loss of confidence in the Transformation team. Implementation of new systems and integrations require people to shift to new ways of working. The transformation plan should include these aspects, identifying the organizational change management, communication and training needed to settle everyone into the new systems.
Modifying the detailed plan as the demands change
The IT transformation initiative is not a project that will be completed in a matter of days. Depending on the scale of the transformation, it may take years for the effort to be completed. The transformation roadmap will be a guide throughout the process of the transformation and most of its activities and ideas will remain relevant to the project throughout its course.
But as you proceed with the transformation, your business environment as well as the available technology may change over time. This may give rise to new opportunities that you should not miss out on. In such a case, it becomes necessary to adjust or modify your digital transformation roadmap to accommodate these new opportunities. It may also sometimes be necessary to tweak your IT transformation plan to avoid certain risks or threats to the business or due to changes in budget, resource availability, or overall priorities of the business. The IT transformation plan should be a living document that is kept up to date with the realities and challenges that naturally occur in the life cycle of a large-scale project. The plan should guide the course you are on, not a fictitious representation of a non-existent perfect world.
It is nearly impossible to map out a detailed transformation plan that can be followed and executed with 100% accuracy. Course corrections will always be required at some point in time or the other. But this should not be taken as a failure of the plan.
Having a detailed roadmap also helps in making course corrections or choosing alternative courses of action, as you have a reference to compare with. Every time you need to make a change, you can always compare how close the changes are to the original plan and whether these changes will take you closer to the goals faster, or if you are making optimum use of resources as predicted in the original plan. It prevents you from going off course or spending too much time and resources on the new activities.
Having a detailed plan helps you to make adjustments in a coordinated way and minimize disruptions to the progress that has already been achieved.
Globalization and digitization are transforming the business economy and enabling a shift to a digital knowledge economy in which knowledge takes precedence over physical labor. Knowledge today is a core business asset, and the exchange of knowledge is a key contributor to business success. The development of communication systems to aid the transfer and utilization of knowledge has become a vital part of enterprise strategy. Collaborative technologies are aiding decentralized organizational structures and remote working arrangements.
The need for digital communication tools can increase manifold during crises that disrupt in-person collaboration. The novel coronavirus pandemic has also forced enterprises to rethink their communications infrastructure. The hybrid workforce and gig economy are also reshaping corporate communication.
Unified Communications and Collaboration (UC&C) is a potential IT service offering for organizations that have been slow to adopt digital communication tools. Start-ups and smaller companies often use Slack, a free collaboration tool that becomes a paid platform as the user base increases or additional features are chosen. A Slack channel is a single place for a team to share messages and files. Users can set up workflows in Slack and customize the platform with internal integrations.
Voice over Internet Protocol (VoIP) allows audio conferencing on-the-fly, while video chats are ideal for situations where nonverbal cues are as important as what is being said, (e.g., vendor negotiations and team meetings). Videoconferencing tools such as Microsoft Teams, Google Meet and Zoom Meetings also enable team chats and file sharing. The organization can, after a comparison of the features and pricing of various videoconferencing tools, establish one official tool for virtual collaborations.
The ubiquity of mobile phones and social networks should make the adoption of UC&C tools by end users quick and seamless. Training people on the tools is helpful for those who aren’t digitally proficient or have less experience using digital communication tools.
Cyberattacks have become increasingly sophisticated and insidious. Typically, companies detectca data breach nearly six months after the event has taken place. This includes top players such as Facebook, Equifax and Capital One. That’s a long time for a bad actor to do damage to the company, the employees and/or the customers.
Digital transformation undoubtedly brings numerous benefits for the organization. But it is not devoid of risks either. With IT transformation, a lot of important sensitive information is stored in the cloud or on digital platforms. These include customer data, financial information, crucial company information and more. With such confidential data being stored in the system, there is always a risk of falling prey to cyberattacks.
It is often seen that companies undertaking IT transformation are hesitant to hire new people to look after security and compliance. But a Chief Information Security Officer and a cybersecurity team are of utmost importance once your organization goes digital.
There are several cybersecurity best practices that organizations can adopt. You can look at other organizations that are already working in a digital-first environment or the industry standards to understand which best practices your organization can benefit from.
Here are a few simple but fundamental tips that can ensure a certain level of data security.
Change passwords frequently
Once you have transitioned to a digital platform, it is important that all employees understand the importance of a strong password. Firstly, the organization should ensure that data can be accessed only after proper authentication through passwords. The password format should be strong enough to ensure better security, such as including both upper and lower case letter, alphanumeric and special characters.
Employees should be reminded to use strong passwords as a habit. They should also be reminded to keep changing their passwords frequently, may be once a month or every three months. You can even make it mandatory by requiring a password change and/or denying access if the password hasn’t been changed in a specified timeframe.
Note: Technology cannot solve what are, in reality, human problems. This dictum applies to organizational cybersecurity. According to IBM, over 95% of cybersecurity incidents arise from human error. Organizations looking to strengthen their cybersecurity as part of IT transformation must focus on addressing their employees’ poor IT security habits. The undesirable behaviors can be identifiable by the behavioral biases employees usually exhibit while taking security-related decisions.
– Set important security settings to default on employees’ computers. Setting all computers to default security settings can ensure better compliance.
– Send employees emails about adding calendar events for system updates. Software update messages are usually deferred and inevitably get ignored. An email asking employees to add an update event to their calendar encourages early commitment and follow-through. Another option is to force the technology upgrade if the user defers the automated upgrade three times, as an example.
– Use comparison to encourage action from employees who are less diligent on matters of cybersecurity. Social proof spurs motivation to perform the desired actions. Another tactic is to poll employees on their security behaviors and compare individual scores.
– Test your employees to guard against social engineering tactics by hiring a vendor that sends phishing emails, with a “gotcha” message if they employee clicks on the suspicious link.
– Make awareness training an ongoing, feedback-driven process that incorporates feedback. Just an annual awareness training does not encourage proactive cybersecurity behaviors. Ongoing training that includes a feedback and remediation can help employees switch to better cybersecurity habits in an informed manner.
Use Virtual Private Networks (VPN) on all connections
A VPN can secure your connections, especially if you are using a public wifi network. It minimizes the risk of your network being breached. That is why it is essential to ensure that all your connections within the organization run on a VPN.
Ensure secure browsing
For added data security, it is also essential to ensure that none of your employees accidentally opens an unsecure website or clicks on unsafe links. While it is not possible to monitor each and every employee’s browsing activity, there are still ways to ensure safety. You can apply restrictions through applications such as Google Ad Blocker, Google Safe Browsing, a reliable antivirus software, anti-spyware software, firewalls and more. These kinds of applications can significantly reduce the chances of your systems getting infected by bugs and viruses.
Use two factor authentication on all your business emails
Two factor authentication (2FA) is actually important on all other platform, apart from email, as well. A 2FA makes your email and other platforms much more secure and can help prevent hacking or security breaches significantly. There are applications that can help with 2FA as well.
An efficient digital platform can only bring maximum results if it is integrative. All tools and applications that you are going to introduce through this IT transformation initiative, should be easily integrable with existing systems as well as any other tools you may have to adopt in the future.
Unless your digital platform is integrative, it loses out on a lot of critical impacts, including employee productivity, the ease of real-time tracking of workflow and timelines, and more. Not having an integrative platform also makes the system a lot more complex and increases the cost of maintenance. In fact, the best solution in this case, is having a platform with most of the features integrated within it. A comprehensive platform can give you all the benefits your organization needs without having to go to multiple tools and apps for different functions.
Integrated and interconnected systems are known to increase efficiency, improve visibility across the organization and drive growth.
According to Pew Research, “roughly six-in-ten U.S. adults say they do not think it is possible to go through daily life without having data collected about them by companies or the government.”
Global technology companies face the challenge of complying with tighter data privacy regulation. The EU’s General Data Protection Regulation (GDPR) is the most comprehensive and progressive data privacy legislation in the world. It gives consumers the freedom to provide consent to services by ‘opting-in’ from the default ‘opt-out’ privacy setting. However, there is ambiguity around legal grounds for collecting data on the basis of ‘necessary processing’ and ‘legitimate interest’. As more stringent data protection laws emerge, global technology companies will have no option but to concede power to consumers regarding the usage and collection of their private data.
Large-scale data collection has a societal impact. Data-driven analysis is helpful but can have unintended consequences. It can reinforce pre-existing beliefs about a particular race or gender. To address this risk, data modelers need to consider whether they are unknowingly inserting their own prejudices. Every bias can have a subsequent consequence. Companies are tapping into alternative sources of financial data, such as social networks, which has implications around how people use social media and share information. Interdisciplinary efforts are needed to ensure that innovation and societal benefits from data sharing occur side by side.
Manufacturing companies in the west are facing fierce competition from their Asia-Pacific counterparts. They’re also contending with hardware commoditization and a shift from core hardware to hardware-software-services, which their traditional model and processes cannot accommodate.
The digitization of machinery (digital machinery) has emerged as an imperative for large manufacturers. Analytics, the Internet of Things (IoT), robotics and additive manufacturing all options on the table. The considerations and activities explained below support the transformation to a digital machinery organization.
Identifying the new ecosystems that can deliver the highest value: Organizations should determine, based on their strengths, resources and strategic goals, which new ecosystems can generate the highest value. The IT transformation will support the creation of the ecosystems, which can range from creating new products/service and developing new delivery models to digitally extending products and services.
Innovating a new business architecture across four critical functions: Organizations have the opportunity to digitize in areas of sales and marketing, product, operations and services and administration. Industry 4.0 solutions, such as digital marketing, automation, artificial intelligence, automation and advanced analytics, can generate more value.
Developing the capabilities and culture that support digitization: Organizations should strengthen their IT architecture and capabilities in areas of enterprise connectivity, analytics and cybersecurity. A supportive organizational culture, firm leadership and smart partnerships will also be necessary.
Conduct a SWOT analysis before designing or choosing a digital platform
The best way to ensure that you know what features you need in the digital platform you choose is to conduct a SWOT analysis along with your team. SWOT (Strengths, Weaknesses, Opportunities and Threats) analysis is a holistic and complete analysis of the organization that will identify what the organization lacks in its current state. It helps the transformation team look at a complete picture and understand the business needs better. Once it is clear what is helping the business and what is holding it back, it becomes easier to make decisions on choosing the right tools to use.
Resistance to change
Resistance has been widely acknowledged as one of the causes behind the failure of organizational change strategies. However, there is a positive side to resistance and tapping into how people feel about the transformation can build commitment and participation.
Resistance to transformation occurs on three dimensions: cognitive, emotional and behavioral. Cognitive resistance stems from the individual’s perceptions and beliefs surrounding the change. Signs of cognitive resistance include an unwillingness to participate in or communicate about change activities.
Emotional resistance arises as people try to balance their emotions during the transformation process. Their feelings about the change can be rooted in the organizational values and symbols. When the emotional commitment to change is low, people may not be proactive; high emotional commitment to change can lead to chaos. Behavior resistance, a combination of cognitive and emotional resistance, can manifest as rumor-mongering, agreeing to something but not acting on it, or other forms of formal or informal resistance.
Strategic change management communications address resistance to transformation through open and frequent conversations with the people affected by the change regarding the impact and benefits of the initiative. Employees may understand the need for the organization to change and improve, but they can be suspicious about the organization’s intent (especially when the company culture is negative). Change communication should be integrated into the transformation plan. It must be iterative, consider people’s feedback and alleviate their concerns at various stages of implementation.
Leveraging data analytics
Data-based decisions accelerate transformation projects. Iterative data collection, processing, and analysis are the foundations of a fact based, data-driven organization. Organizations are in fact using data analytics as a competitive tool to perform better than others and offer greater value.
Data and analytics should be made part of the transformation strategy from the very beginning and should be a key discussion point in every progress meeting. You need to decide which data that the organization owns can be used in making decisions throughout the transformation initiative. There is also data that the organization can procure from external sources, which may be valuable in filling gaps in the organization’s knowledge about its customers, markets, competition, etc.
To make better decisions on information management and streamline the process of data collection and analysis, it is important to have a Chief Data Officer (CDO) or a Chief Information Officer (CIO) who will be responsible for making this cultural shift. Many organizations do not tap the potential of data analytics because it is not a part of the traditional business model. Having a dedicated team of data analysts headed by the CDO can help change this approach.
There are few things that the data analytics team must focus on in order to build data analysis competencies in the organization.
• Collect information on how the organization, or other organizations, have benefited from data and analytics and communicate this information company-wide.
• Get involved in strategic planning discussions to ensure that data analytics is given its due and made an integral part of the transformation strategy.
• Measure and bring forward the value of the information that the company holds so that people can see data as an actual asset.
• Move beyond traditional business intelligence tools and take the help of advanced analytics technologies such as machine learning.
Data analytics can help the digital transformation effort in more than one way. Some of the key areas that data analysis helps with are –
Predicting customer behavior and demands
Data analytics is being increasingly used to understand customer behavior and predict their demands. From e-commerce to banking to entertainment, all industries rely heavily on data to forecast shifts in customer preferences and use that information to modify or improve their strategies. Advanced data analytics can help improve these predictions. There is a sea of customer information out there that must be used to support the IT transformation effort of your organization.
Optimizing business processes
Internal data in an organization can be used to improve its business processes. Structured and unstructured data collected from different units and different levels of the organization can be used to analyze how the processes are contributing to the goals. It can help identify gaps and predict failure to allow for preventive maintenance before failure occurs. Thus, it helps monitor the health of field assets in the organization as well.
Improving customer experience
Data analysis can provide information on how customers interact with other brands. It can give insights into what draws customers to a particular business. The organization can use this information to adjust and alter its internal processes as well as customer interactions to enhance the customer experience.
Fundamental changes required in an organization for better data analytics
To make data analytics more useful and meaningful to the IT transformation effort, an organization must make some fundamental changes in its approach to information management.
Finding the right tool for integrating and exchanging data
Data integration has been a challenge for most organizations. When the organization goes digital, there will be more and more data piling up every day. Not all of this data will be easy to access or integrate. Though data integration can be done manually, in most cases, it will be a time-consuming process. So, the organization needs to decide on the right tools to use for processing and integrating data, to make it easily accessible to everyone who can use it.
Creating central data repositories
Data cannot be left scattered among individual departments and desks if you wish to utilize it effectively. All the data that an organization collects must be stored in one place centrally so that anyone on the analytics team can access this data and work on it whenever they need to. You can either modify your job flows within the organization to ensure that all the data from different locations are routed to the central repository or use automation software to extract and transfer data to the central storage without any manual work required.
Focusing on data quality and not quantity
It does not matter how much data you collect if that data is not relevant to the business or does not contribute to the business in any way. In fact, collecting too much data actually makes the job of processing and analytics more complicated. The data that the organization collects needs to be cleaned and filtered before sending it to the archives. Not all data is worth retaining. What kind of data is to be kept and what can be discarded should be made clear through some established guidelines.
Encouraging collaboration between the data science and IT teams
The IT team will be at the forefront of the digital transformation of the organization. They are the ones who will be implementing the changes and carrying out the groundwork. The data the company collects and analyzes, and the insights gained from it, are of utmost importance to the data team. To gain maximum returns from the data, it is important that the data analysts and IT people work in close collaboration. There should be no barriers to communication or silos that restrict the flow of information between these two crucial units.
Attributes of feedback mechanisms
During feedback loop analysis, businesses make a deliberate effort to figure out what clients value in the feedback mechanisms.
The following attributes are the most important and should influence the choice of mechanism:
The communication channel chosen should be able to forward information promptly. It allows both internal as well as external clients to have sufficient time to make decisions and respond accordingly.
The chosen mechanism should be able to deliver communication not just once but also on subsequent occasions. Businesses should ensure that telephone and e-mail systems are reliable and available to enable communications both internal and external to the organization.
Whether it is customers or staff, the mechanism should be able to maintain uniformity of information that goes out. Consistency facilitates buy-in across the business through increased knowledge, making the marketing of services and products easy for everyone within the business. It also greatly reduces confusion, not just about the products and processes, but also the general operations of the business.
Confidentiality has two aspects- confidentiality of information and confidentiality of sensitive complaints.
Customer information is extremely sensitive and must not be shared or accessed by unauthorized third parties. If customer information is leaked or stolen, the company’s reputation is at risk. A business that fails to take due care may end up losing customers and/or face legal consequences. Businesses must ensure that any communication mechanism that is used to send out sensitive information is secure.
Customers may be reluctant to criticize or complain against staff when it comes to sensitive issues. They are often unaware that most businesses have a no-tolerance policy against issues like corruption and encourage customers to make complaints in such situations.
Coverage is an important attribute of communication channels. If businesses need to send out information that is meant for the public, they should choose a mechanism that has a wide geographical coverage, like print media or radio. Internal information can be sent through the intranet. However, if the information is only meant for the staff or a selected group of staff, businesses must use communication channels that do not compromise confidentiality.
Content of communication
While businesses need to use the right communication mechanisms, it is equally important to pay attention to the quality of information.
The quality of information can be defined in terms of:
Businesses must take care to target their message appropriately. They should use clear and concise language to ensure that the message is quickly understood by the target group. It may be necessary to deliver messages to different groups of customers in different ways.
The target group should perceive the information sent as relevant to their needs and preferences. Only then will they properly understand and remember the information.
The communicated information should be comprehensive so that it fully addresses the communication requirements. Inadequate communication may be distorted and require a lot of clarification leading to a lot of wasted time.
The information that you deliver should seem realistic and within the business’s capacity to deliver. The confidence that clients have in a business is largely based on their previous experiences with the business, that is, whether it has lived up to its promises in the past. When promises made are not delivered, it can bring disrepute to the brand and damage the confidence that customers have in the business.
Improving feedback loops
Every aspect of a business requires feedback loops to stay healthy. Like everything else in life, feedback loops can also be improved.
1. Understand that feedback loops are dynamic
As the organization grows and develops, both in terms of geographic expansion and the number of customers, the nature of the feedback loops within the business change. When the business is young and small, senior management may find it easier to operate close to the operational level. However, that may not be possible when the business grows and expands. When a business grows, it is necessary to formalize communication mechanisms and introduce intermediary layers. The downside with business growth is that the information collecting and the decision-making processes become much more involved and take longer. With a bigger business, it becomes more and more difficult to obtain feedback and act upon it.
2. Delegate decision-making with care
Businesses usually suffer from two problems, first a delay in decision-making, and second, the assignment of responsibility for any task. Implementing decisions takes a collective effort. Unless there is deliberate effort to follow up on progress, implementation may or may not occur, depending upon the responsible individuals’ workload, priorities, skillset, buy-in, etc. To improve the chances for successful implementation of decisions, it is important to ensure clarity of roles and priority, and an escalation path for any concerns or issues the responsible individuals encounter.
3. Make sure there is strategic alignment within the institution
It is extremely important that the staff are aware of the key business priorities and understand their role in delivering these priorities. When a business is clearly aligned, the staff find it easier to coordinate their actions and communicate collaboratively. In such circumstances when a feedback loop shows the business is out of line, it is much easier for the staff to recognize and correct the issues at hand. Doing so also ensures there is greater consistency in the communication and implementation phases of the feedback loop.
4. Use the right technology
Unlike earlier times, operations have significantly improved due to technological advancements. Businesses that have embraced technology and have invested in the right software have improved information collection, consolidation, storage, and access. Technology has made it easier for clients to transact but also to access the information on their accounts. The increased use of the internet and smartphones is decreasing customer dependency on face-to-face contact for information.
5. Encourage your staff to provide honest feedback
A lot can be done to improve the attitude of your staff and to encourage them to use feedback mechanisms.
• A supportive business culture creates an environment for open discussion, while making sure that feedback is heard and addressed, as appropriate.
• Encourage transparent and honest communications to senior management. If your staff wishes to raise a more serious issue, they should be encouraged to present their concerns directly to senior management, with no fear of repercussions. Senior management needs to show gratitude and appreciation for staff that are willing to take the (perceived) risk of sharing their concerns openly and honestly. This will encourage other staff to do the same, should they have concerns in the future.
• Invest in Employee Relationship Marketing, which can be done by developing an employee relationship marketing strategy. The strategy should encourage and reward good ideas presented by the staff.
• Define standards to measure the performance of important feedback loops. Just like businesses have a Customer Service Charter for Customer Service, it is also important to have standards for feedback within a business. These standards should highlight how important information should be collected, how often, by who, the time within which to give feedback, and more. Such steps go a long way in curbing inefficiencies that may crop up from a lack of points of reference. It can also prevent information from getting lost or blocked at any point in the feedback loop.
• Develop and maintain Internal Directories. In larger businesses, there are internal directories available, explaining the position and telephone number of staff members. It is a simple measure, though often not performed, that makes it much easier for staff to identify who to contact as questions or problems arise.
6. Staff motivation during a crisis
If the project team does not feel motivated, the best performance cannot be expected from them. Organizations should develop staff incentive schemes that align and reward staff based on the achievement of targeted goals. The staff incentive scheme feedback loop can work swiftly. The best schemes are those that are highly transparent and directly attributable to objective achievements.
Stress the priorities that make work meaningful: Team members will ponder more deeply about their health and family, as well as assess how their work relates to these priorities. Organizations navigating transformation in unprecedented times – such as the novel coronavirus pandemic – can engage employees by framing the return to work as a fresh start, but with priorities such as inclusion or work-life balance intact.
Promote collaboration and identity-building in the workspace: Following a long period of isolation, team members may find it difficult to regain a sense of belonging once they start working in the office. Some employees may continue to work remotely. Companies can ‘reset’ bonds and increase team members’ morale by reimagining the office as a community where people come together to solve problems – whether in person or virtually. Technology can be leveraged to encourage and support collaboration, regardless of physical work location.
Build team cohesion and social connectedness: The loneliness that sets in among employees working remotely for months can weaken team identity and connections. Companies need to build communication structures that maintain or create trust, and build psychological safety that encourages employees to share their concerns openly. New performance management systems and online mental health advice are other areas of focus.
Allow some degree of autonomy and flexibility: Flexible work arrangements on an individual basis have been seen to improve innovation, performance and collaboration. As the pandemic has impacted different demographics differently, companies should have agreements with every employee based on their circumstances and needs.
Make remote leadership effective: Traditional leadership styles are quite ineffective in inspiring virtual teams. Managers and the project team lead should inform employees of the values that matter to the company, communicate a bold vision for the future, and openly discuss the company’s challenges and hopes, and express confidence in achieving goals.
7. Customer Service and the Feedback Loop
Organizations that maintain systematic methods of monitoring customer service levels already manage an important feedback mechanism. There are many tools available for monitoring customer service, including suggestion boxes, service quality questionnaires, mystery shopping, focus group discussions, and many more.
Organizations should make it easy for customers to submit complaints and ensure confidentiality. A simple way to do so is to introduce a customer telephone hotline and an email address to improve the feedback loop. Customer comments, suggestions, and complaints could be reviewed directly by a marketing manager. Management should allow the marketing manager to have the authority to ensure that the customers’ suggestions are acted upon, when appropriate.
Collecting customers’ comments at a central point makes it much easier to identify whether comments were a one-time event or were symptomatic of a wider issue. To make it easier for customers to make complaints, businesses should be careful to identify staff clearly, especially in situations where many different employees serve customers.
Feedback loops must be an integral part of any business that strives for high productivity and efficiency. Getting feedback as early as possible and acting on it the right way can spell success for a business. Speaking your mind in front of everyone may seem uncomfortable. However, it can be a crucial step for businesses that want their teams to be more productive, improve their performance, and have fully collaborative and coordinated deliverables.
Rethink stretch goals
Intelligent goal-setting matters immensely in a high-pressure IT transformation initiative. As stretch goals are ambitious and inspire the best in people, they can motivate and encourage innovation. That said, being overly aggressive and unrealistic only leads to disappointment. Here are some tips to help you plan stretch goals effectively.
Think about whether the goal is achievable: When people sense that there is no realistic path to the goal, they are unlikely to work harder or smarter in achieving it. If anything, unattainable stretch goals deplete people’s energy and have a demoralizing effect.
Envision expectations around the stretch goal: It may not be possible to picture every step leading to the goal. However, you should be able to work out the talent and resource requirements of a realizable stretch goal. This alignment can help set the right expectations among project team members.
As part of the improvement efforts, organizations should reflect on how to recognize small successes along the way. This helps to keep momentum and motivation alive.
Rethinking performance reviews
In challenging times, such as an extended public health crisis, employees face the pressure to quickly adapt to different ways of working. The right feedback and coaching can help employees deal with change and avoid too much stress. However, studies show that many employees lack clarity about their performance and what managers expect from them. This should prompt the project team leader and/or transformational director and/or project sponsor to think carefully about the performance review for the project team.
– Effective performance reviews are forward-looking rather than backward-looking. Focus the conversation on how team members can improve performance or achieve a better work-life balance, indicating that you want to help them do well.
– Questions that simply ask how the team member is doing serves nothing beyond a social function. Instead, directly inquire about the biggest problems they are currently facing, and how you (as leader) can help to remove roadblocks or improve the situation.
– The team leader, or any senior expert brought in to advise the team, should listen first and if appropriate, offer inputs on challenges that they may have experienced and overcome. They should connect employees to people who can address their pain-points. Team members will welcome efforts on your part to help them deal with key challenges.
– The sources causing frustration for team members may also be the reason for the team leader’s dissatisfaction with their performance. So, conversations should always be concluded by discussing a few pertinent performance issues. Focus on the result or impact that needs improvement, and ask open-ended questions about what the team thinks (or feels) about what happened or what went wrong, what needs to be done to improve performance, what are the inhibitors or blockers to performance, what can the leader do to help, etc.
Digital copies of documents recording the IT transformation
The IT transformation project is formalized in digital documents for sharing and record-keeping. Organizations invest in project management tools and documentation software to facilitate easy collaboration, editing and reporting.
A variety of information will be created during the program and organized into relevant documents. For example, some documents will explain the plan of action to meet targeted outcomes. For efficiency and productivity improvements, process digitization (via automation), employee enablement (via collaboration and remote working tools) or faster data analysis (via business intelligence tools) are possible solutions. These documents can be used to market the transformation program with company executives, giving credit to the team for the great progress, improvements in productivity, etc. using metrics whenever possible.
IT transformation is usually an expensive undertaking that requires careful resource planning. Project priorities are determined and planned in advance to direct focus on what matters most. Stepping outside the boundaries of the project can make it challenging to control project costs within the approved budget, and the project may get out of hand. As scope creep is a risk, team members must be aware of what constitutes extraneous work from the project’s viewpoint. These aspects are expressed in the scope document, and are as follows:
Objectives: IT transformation is planned with clear objectives. Objectives make goals specific, measurable and time-bound. They inform team members about what the project wants to achieve and what needs to get done.
Outcomes: Outcomes are the benefits gained from accomplishing a goal. The outcomes linked to the goal of automating a business process are greater efficiency and better job satisfaction from not having to do monotonous repetitive tasks.
Deliverables: The title and description of each deliverable provide the details team members need to execute the tasks assigned to them. Anything included within the scope of the project will reflect in the deliverables.
Exclusions: Any items excluded from the scope of deliverables must be explicitly stated. They represent the extraneous work that must not be performed. Exclusions and inclusions must be stated in simple terms to be absolutely clear and not give rise to any doubts or confusion. Team members must be encouraged to ask questions and get the clarifications they need to align completely with the project goals, objectives and deliverables.
Why should the project team document outcomes?
• To articulate key points of the project
• To validate the need for action and key transformation-enabling activities
• To reflect on possibilities and risks
• To communicate project mission and goals
• To archive data for future use
Types of outcomes
Process indicators are action steps indicating the quality of how the problem was solved or opportunity realized. They are needed to understand how the funding decision was made, and the quality of the decision. Virtually all IT transformation initiatives target process improvement and define the process indicators applicable to the project.
Intermediate outcomes can be partial results of the project, important steps or milestones. The project team lead should determine why intermediate outcomes need to be documented. In other words, state reasons for including partial results, important steps and/or milestones in the documentation.
Long-term outcomes address the original problem or opportunity. They can be measured only after the expected results of the transformation become observable. Long-term outcomes are closely intertwined with strategic goals such as improved competitiveness, greater revenue or business growth.
In the event that goals are not met, avoid generalizations as a substitute for evidence. Put any evidence that exists in a positive light, and communicate unachieved objectives as an ongoing problem, a still-outstanding opportunity or as a risk to sustainability.
For example: We were able to create the software application within the time that our big-ticket clients were asking for. However, we did not add the number of visual cues that may have perhaps made the application more engaging or visually-appealing. Based on feedback from clients, we will incorporate the necessary changes in order to improve their experience engaging with the app. Here are some options that we’ve determined: [insert options].
Documenting a process improvement versus an impact assessment
An impact is a result of long-term behavior and policy change. It can be seen in service levels improvements, profitable products and improved cost efficiency. In relation to future transformation plans, impact assessment can result in improved planning and implementation, which can help optimize project budget, time and efforts, while also yielding higher quality efforts.
Documenting impact involves monitoring and learning. It is an on-going process extending beyond the project timeline. The impact from a current program can be felt in the future or set the company up for success in some way. Early documentation serves as a historical lesson for what the company did right, such as pursuing IT transformation in a timely manner and taking a certain approach to project planning and execution.
Documenting process improvements is one of the key activities of the IT transformation plan. It is a commentary on how those enhancements have brought about the desired results, subject to the KPIs or OKRs for the individual processes in question. In general, process documentation covers a range of activities, including key points discussed in meeting, interviews of key stakeholders, and any events that supported or hindered progress in the project.
Develop a clear documentation plan at the start of the program
Planning how to go about documenting the program improves focus, defines roles and responsibilities, and helps make process documentation useful and systematic. After all, the quality of the information gathered depends on a clear understanding of the transformation plan, an understanding of the stakeholders involved, cooperative relationships between stakeholders that aid the collection and observation of information, and time for reflecting and critically processing this information.
Planning program documentation
– What is the purpose of documentation? Be specific and make reasons explicit. Progress reports and risk registers are needed for communicating status updates to all project participants, formal monitoring, internal learning and updating board members.
– Which tools are needed to document the project? The type and features of tools to capture information, analyze findings and disseminate information must be known to make an appropriate selection.
– Who will document the project? Will a single documentation specialist take responsibility for all documentation, or will he/she work jointly with another similarly experienced team member?
– What are the key activities in project documentation? Broadly speaking, information will be gathered, analyzed and disseminated. Between project commencement and closure, the documentation effort may involve many other time- and effort-intensive activities, such as performing change requests, creating the same document in different formats for sharing with clients or board members, updates to documents or even a change in resource allocation if a team member exits the project.
– A structured, focused way of capturing the transformation
– Requires time, skills and resources
– Includes a wide range of activities
– Not a standalone activity; supported by teams
– A team responsibility
– Requires harmony between documentation specialist and other team members
Organizations that develop a 90-day plan that recognizes risks, opportunities and the business reality, and puts checks and balances in place to steer efforts in the right direction, will be off to a great start. They can then confidently execute the plan and organize efforts in the right areas.
Technology underpins virtually all business strategies. It isn’t just a business necessity but also a game-changer. Rapid technology innovations and developments have disrupted all industries, created new players that are challenging large, entrenched companies, and proved invaluable in dealing with unforeseen shocks to global businesses, (such as 2020’s novel coronavirus pandemic). Leading market research company Forrester predicts that 2021 will be the year companies that were lagging on the technology front – that’s about 85% – will play catch-up with technology leaders (the remaining 15%) by prioritizing technology changes in every part of their business.
Companies have come to accept that unless they transform through technology, they cannot succeed – or survive. Technology transformation is not just about implementing technologies that deliver business value. Neither is it a one-time program that organizations can execute and expect benefits to keep coming. Adopting new technology, improving the organization’s delivery of IT services, and other technology-related changes across the organization require engaging people, adapting processes and aiming for continual improvements. Successful IT transformation is a sum of many factors, which are considered during the planning stage.
Beginning with the 90-day plan
The first 90 days are crucial, allowing organizations to reflect internally, determine priority areas and build the transformation roadmap. While an IT transformation doesn’t have to include digitization strategies, it offers organizations the opportunity to examine their digital maturity.
What makes the 90-day plan an effective tool in IT transformation?
There are certain critical success factors that are differentiating elements between organizations with successful transformation efforts and those that failed in their efforts. The four primary factors that contribute to a successful transformation in any organization are found to be the following.
The first and most important factor that decides if an organization will succeed or fail in its attempt to carry out a company-wide IT transformation is whether all aspects of the business have been covered. Successful companies have always analyzed each and every aspect of their business when considering a transformation. No business function, irrespective of how big or small it is, has been neglected or overlooked. That is the first thing successful IT transformation needs – a holistic approach to the change that is desired.
Companies that have carried out transformation successfully are known to manage their operations efficiently so that no ongoing work is stalled or slowed down. The transformation planning and execution is carried out in parallell with the regular, day-to-day functions minimizing the down time and disruptions caused by the transformation efforts.
Integrating different functions
Successful transformation processes are also found to integrate the various business process and functions so that they do not work as separate streams but contribute together towards the common goals. This also helps in sharing of knowledge across boundaries and breaking down the silos that are formed as a result of segmentation within the organization.
Complete commitment at all levels
Organizations that have succeeded in carrying out transformation effectively have the complete commitment of their employees at all levels. Everyone is invested in the effort and understands the need for change. But most importantly, they have complete buy-in at the executive level. For successful transformation, the top level must be fully involved in the effort. Without buy-in at the top, transformation may not even be possible, as making decisions and getting approvals becomes a major challenge.
The 90-day plan for IT transformation covers all of these keys to success. It embraces all the critical success factors that are necessary for making the IT transformation effort successful.
The 90-day plan is inclusive, involving people from all levels of the organization and from different functional areas. This helps give a wide and holistic perspective of the organization and the underlying issues.
The 90-day plan also requires buy-in from all the key people and leaders within the organization, creating a solid support system for the transformation effort. Involving people from all levels and departments, reduces the resistance to change that the transformation leader would otherwise have to face.
As more people are actively involved, they understand the purpose of the IT transformation and realize how it is going to impact their personal growth in the organization as well. Including all the people in the transformation effort also breaks down many barriers to communication and information flow that previously existed. Skills and know-how will travel across borders in the organization and create more experienced change managers and leaders, who can take on more such roles in the future.
The different phases of the 90-day plan are discussed in Theory and Communication portion of the manual.
Examining whether the organizational structure is conducive to change
An organizational structure is a system that defines the hierarchy within an organization. It identifies each job, each function and the reporting function within the organization. Based on this information, a structure is formed to show how the organization operates.
An organizational chart is a broad visual representation of the organizational structure, indicating the following:
• The organization’s major departments or positions
• The way different positions are grouped into specific units
• Reporting relationships from the higher to the lower levels
• Official communication channels
The chain of command is the line of authority linking employees with organizational positions at the highest levels through managerial positions at each successive layer in between. Most organizations have a defined chain of command, a concept that derives from the classical management viewpoint of unity of command and scalar principle.
Unity of command states that an employee should have only one boss or supervisor. It is a feature of the organizational structure of many companies, barring those that have a matrixed structure, as discussed further.
The scalar principle states that a clear line of authority should extend from the individual holding the ultimate authority at the top to every individual in the organization. That means every individual must be able to identify their boss and trace the line of authority across the organization to the position residing at the highest level.
Organizational structure and IT transformation
IT transformation can be let down by an unsupportive organizational structure. The main obstacle for the failure or poor progress of digital transformation is unprepared organization (Gupta, 2018). Rigidity, silo structure, poor communication and bulk of formalization and rules can slow down the entire organization (De Smet & Gagnon, 2018).
When designing an organizational structure that supports IT transformation, leaders should consider the following issues (Schreckling & Steiger, 2017):
• Are digital initiatives established in separate units or are they integrated into the entire organization?
• How do organizational units coordinate on digital initiatives?
• What new roles must be created in the organization to work effectively with the new technologies?
• What is the training required to enable employees to use the new technologies in their processes and activities?
• How to set up performance measurement systems, key performance indicators, compensation plans and incentives to improve digital transformation?
Building blocks of organizational structure
A company’s structure is made up of four elements or building blocks: centralization, formalization, hierarchical levels and departmentalization.
Centralization is the extent to which decision-making authority is concentrated at the higher levels of the organization. In a centralized organization, managers and CEOs make many of the important decisions. In a decentralized organization, problem-solving and decision-making happens at the lower levels by employees.
Formalization is the extent to which organizational rules, job descriptions and policies are articulated and codified. Its goal is to control employee behaviors, making them more predictable. On the positive side, employees can regulate their behaviors to the expected standards by referring to their company’s handbook and procedure manual. The disadvantage of strictly adhering to prescribed behavior is that it can stifle creative thinking and innovation. Excessive formalization has also been shown to adversely affect employee motivation and job satisfaction.
Formalizing rules and guidelines is helpful in service industries, where customer-facing teams must handle customer complaints in an appropriate way. That said, manuals and handbooks don’t always have all the answers. Moreover, employees are bound by strict rules and have little flexibility to frame other acceptable, perhaps even better, responses.
Organizations operate at different hierarchical levels. In a tall structure, there are many levels of management between frontline employees and top-level leaders. A flat structure is characterized by fewer layers. The span of control, the number of employees that report to a manager, is smaller for the tall structure. Higher-ups oversee fewer people below them, which allows them more opportunities for supervising and controlling employees. Managers in companies with a flat structure have a wider span of control. Consequently, they’re unable to supervise employees closely. Employees enjoy greater levels of freedom and action, which may have a positive influence on job satisfaction. Drawbacks include the need for employees to be self-reliant and a greater ambiguity around roles.
Departmentalization, the process of grouping activities into different departments, can be based on function, or the division may be related to the company’s products, services, customers or geographical location.
Big organizations may favor departmentalization based on product or service line as it allows functional managers to supervise work groups in each division. Geographic departmentalization is generally adopted when marketing and operations activities are widely dispersed, or customer needs and tastes vary according to geographical locations. When the organization’s customers can be grouped into several categories based on distinct needs, a preference for departmentalization according to customer groups can be seen.
A functional structure comprises separate departments for marketing, finance, human resources, manufacturing and so on. A divisional structure creates separate units that handle a unique product, service, type of client, and each has different departments based on specific functions, essentially replicating roles in the functional model. This is discussed in detail further on.
Depending on how the four structures are arranged, two configurations of organizational structures can be noted: mechanistic and organic.
A mechanistic configuration is characterized by high levels of formalization and centralization. An organization with this configuration is rigid and resists change, which can make IT transformation or any major overhaul difficult. The structure can also prove to be an impediment to innovation, while reducing individual autonomy and self-determination. Big efficiency gains are possible with the mechanistic configuration, making it suitable when the organization is aiming to boost efficiency and lower costs.
An organic configuration, commonly seen in small companies and start-ups, decentralizes decision-making and does not formalize job roles and descriptions to the degree of the mechanistic structure. Communication is open and fluid. Employees have the flexibility to shift between roles that match their expertise or where they’re required based on organizational needs. They are self-reliant and accountable for their own actions. An organic structure is associated with innovation, entrepreneurial behavior, and higher levels of job satisfaction.
Types of organizational structures
There are different types of organizational structures, each with their advantages and disadvantages.
A functional organizational structure is based on creating groups based on skill and function. For example, a technology company may have an IT department that supports the organization’s technology needs, and a marketing department that markets the company’s products to its target audience. Each department is led by a director who reports to an executive at a higher level in the organizational hierarchy. Apple Inc. has a functional structure organized around functions such as design, product marketing, operations, software engineering, hardware engineering and hardware technologies.
Structuring an organization based on specific functions is disadvantageous from the perspective of inter-departmental collaboration. Employees in each function tend to view the company from the lens of their specific job function and fail to understand the full extent of the contributions of other departments. This can prove problematic when teams from different departments must work together in achieving IT transformation.
A company with a divisional organizational structure has different divisions that control their own resources and budget. Each division operates as a separate company and is led by one or two executives who report to the CEO or upper-level management of the parent company. As decision-making occurs at the divisional level, it can be quicker and smoother than filtering its way through at the top levels. On the flip side, this structure creates barriers between employees working in the same function in different divisions. McDonald’s Corporation has a divisional structure, where each division handles a specific operational area. The elements of its organizational structure include global hierarchy (CEO controls all business areas globally), performance-based divisions and function-based groups (corporate operations have human resources and supply chain sustainability groups).
A matrix organizational structure is a combination of the divisional and functional structures. The advantage of this hybrid model is that it allows specialized staff and equipment to be shared as required and avoids the duplication of functions as seen in divisional structure. Functional departments develop and solidify functional expertise, while cross-functional project groups broaden perspectives and enable knowledge transfer. The downside to the matrix structure is that employees report to two or more bosses, which can lead to confusions and conflict. If the company doesn’t set priorities effectively, employees may be unclear about their role and feel that they’re simply being shifted from one project to another. Caterpillar Inc, Nike, Phillips, Starbucks and Texas Instruments follow a matrix organizational structure.
For better collaboration and faster innovation, companies may adopt a flatter structure that still retains a hierarchy. Employees can suggest new ideas and upon approval, form teams to move forward with the idea. Adobe, Google and LinkedIn follow such a flatarchy structure. They have internal innovation incubators where employees can develop their ideas to create new products or services. Employees are grouped and regrouped to develop their ideas with greater autonomy and lesser bureaucracy.
A holacratic organizational structure is characterized by distributed decision-making and little hierarchy. Employees have the flexibility to move between roles and teams, and everyone gets the opportunity to work on what they do best. It is apt for start-ups and small companies, and unsuitable for organizations with thousands of employees. Some aspects of a holacracy can be utilized by a large organization to ease rigidity and give employees flexibility to try different roles.
Holacracy gained attention for its potential to speed up decision-making but it isn’t without faults. Disagreements on the levels of interdependence and inter-relationships in this set-up can lead to delayed decision-making. David Allen Company, Zappos and Valve Corporation use holacracy. At video game software maker Valve Corporation, employees have the flexibility to work on any product they want, but they must also take ownership of that product and responsibility for any mistakes they make.
Goals for IT transformation
The 90-day plan for the IT transformation of an organization provides a framework for the implementation of the transformation. To create this framework, you must first know what the organization aims to get out of this transformation effort. That is why setting the mission and the goals for the transformation project is extremely crucial at this stage.
One of the main reasons why the implementation of digital transformation in an organization is not successful is that there is a rift between the overall vision that the transformation leaders have and the actual plan. The transformation plan is usually outcome-oriented and based on the organization’s capabilities. The vision, on the other hand, may sometimes be over-ambitious. As a result, the plan that is created is unable to help achieve the big picture vision that the organization has for the IT transformation initiative.
This rift is usually caused because of one critical missing link – the lack of realistic measurable goals. During the 90-day planning phase, goal setting is one of the key activities that the transformation leaders need to undertake in consultation with the teams. It is essential to have a set of measurable, and achievable, objectives for the transformation. These measurable objectives help to turn the transformation strategy into a series of actionable steps that can help achieve the overall vision.
Why is it important to focus on the organization’s capabilities?
Recognizing the need for transformation is in itself a big step towards change. But an even bigger challenge lies ahead when you are trying to set the objectives for the transformation. That is deciding what to change and how to change. Transformation leaders often struggle with deciding which aspects of the business need to change the most and how to weigh their options. This is crucial because these are the things that will determine the objectives of the transformation initiative.
Transformation leaders need to consciously focus on the right targets for change rather than trying to change everything at once. They have to break the business down into smaller functions and decide which ones are in dire need of change. This is what makes a good transformation strategy for the long run.
To make this decision easier, it is important to remember that business capabilities have a very crucial role to play here. It is useless to set big goals for the digital transformation initiative if the organization cannot provide what it needs for those changes to be implemented. Focusing on the organization’s capabilities can help identify all the tools and support that are available to achieve the outcomes and overall vision that you seek. It can also help find out what is missing and how these gaps in capabilities can be filled. A holistic view of the organization is necessary to ensure that the transformation effort adds value and is not a half-baked attempt.
What is the purpose and importance of a vision in IT transformation?
Creating a big picture or a vision for the IT transformation initiative is usually the job of the leadership. In fact, one important skill that sets good leadership apart from average ones is their ability to inspire their employees to work collectively towards a common goal, or a vision. Employees develop inertia working with legacy systems and following the same processes and policies for years. To bring them out of their inertia and urge them to adapt to change, pick up new skills and move on to newer technology, the leadership must give them something to strive toward.
These lofty ambitions that the leadership sets give them the promise of a better future for the organization and their own growth. This drive is crucial to make employees ready for the transformation and minimize resistance. Poor leadership usually struggles to bring people together and channel or focus their energy toward a common goal.
The organization’s vision plays an important role in bringing everyone together under the leadership’s supervision. The vision describes what the organization hopes to be like in the future. A well-defined vision clearly translates the organization’s ambitions and is representative of its commitment to perform better.
What is the purpose of a mission statement in IT transformation?
While the vision statement of the IT transformation initiative describes what the organization aims to become in the future, the mission statement explains why the transformation is necessary and what is its role in the company’s growth.
A well-formed mission statement helps answer some fundamental questions about the IT transformation effort, such as “what is the need for transformation?” or “how the transformation will help the company perform better?”
Like the vision statement, the mission statement of the IT transformation initiative should also be formed in consultation with key stakeholders of the company, including employees, customers, suppliers, and others. Involving everyone in the setting up of the mission statement will help them understand why they should support the transformation and how this digital transformation will help the business.
One good example of an organization’s mission statement is Google’s mission statement. Google’s mission statement is “to organize the world’s information and make it universally accessible and useful”. This clearly states how the company is adding value for its consumers and how it hopes to impact society. An IT transformation’s mission statement will be no different.
Let us consider a simple example of a digital transformation mission statement. An IT transformation initiative’s mission could be “to drive productivity, innovation, and growth in a global market with ever-increasing competition”. This is just an example of how the mission statement can look. Depending on your organization’s needs and goals, the statement can change.
To give you a general idea, the mission of digital transformation would usually be:
• To make new technology easily accessible at all levels in the organization
• To make the implementation of new technology scalable and reliable
• To support the various business functions and improve productivity
• To reduce the amount of repetitive and non-value adding tasks and utilizing the human resource better
• To help people develop new skills and adopt new technology faster
• To gain a competitive edge by adopting the latest, best-in-class technologies
• To optimize the business processes and improve competencies
• To provide better service to customers
• To improve collaboration within the organization and across departments
These are just some quick ideas but there’s much more that digital transformation can do. The mission statement of the IT transformation should not focus on the monetary gains that the transformation can bring. It should rather focus on how the transformation can impact the lives of the people associated with the company, be it employees, customers, or society as a whole. It should convey how the transformation will improve people’s experiences.
A strong mission statement is extremely important to drive home business case for the IT transformation and just like the vision statement, it should be communicated and propagated across the entire organization at all levels.
What will it involve and how long will it take?
The plan will contain specific points on how the expected outcomes are to be achieved. A new model for purchasing IT services can include the creation of a service catalog and cost transparency. The IT service to be made available to each department will be uploaded in an online service catalog. The costs, features and value will be mentioned for each service. Relevant decision-makers will be empowered to make decisions on short-term purchases and long-term investments.
For an organization-wide IT plan, the cost of deploying the underlying technologies will be spread across services and customers. The amount associated with each service or customer groups can be correctly associated, ensuring cost transparency.
Changing how IT is delivered across the organization will involve various aspects, including infrastructure, governance and service level agreements. SLAs can be formalized to indicate the measurable level of features and quality that each IT service will be expected to deliver. Some IT services may require upgrades to the current infrastructure or potentially outsourcing infrastructure services (e.g. infrastructure as a service, IaaS). An external vendor who can best meet the need for infrastructure modernization may be identified. The plan will also present ideas on creating a governance model and accountability to ensure a continual flow of information that allows informed decision-making about future investments.
Examples of IT modernization
IT modernization can occur in different ways. It can involve replacing the organization’s current enterprise resource planning (ERP) system with a new one that aligns better to strategic goals. Maybe the company is confident that moving from on-premise ERP systems – which are preferred for stringent regulatory and compliant environments – to a hybrid system can provide the benefits of on-premise and cloud solutions.
If the goal is legacy system modernization, Gartner suggests considering six drivers: business fit, business value, agility, cost, complexity and risk. Modernization options include deploying application components to a different infrastructure without modifying its code, features or functions; migrating to a new runtime platform and making minimal changes to the code; or altering the code and shifting it to a new application architecture to leverage new and better capabilities.
Capital One, for example, began exploring a move to the cloud as early as 2013, and in 2016, struck a deal with Amazon Web Services to migrate their obsolete applications to the cloud. Deutsche Bank announced a USD$1.1 billion program to pare down their 45 different operating systems to four by 2020. Goldman Sachs launched fintech subsidiary Marcus in 2016 to make consumer loans but has since expanded into new products and services.
When is IT transformation successful?
Businesses that fail to transform may lose their competitiveness or even fail to exist in the long run
Change is impelled by many factors, including:
– Technological advancements, which create opportunities to improve the business and increase value for the customer.
– Poising the company as an attractive acquisition target to gain access to capital, capabilities, systems, social capital and so on.
– Prospects of fast growth in a promising or sunshine industry, which can be achieved by improving products/services, or launching new offerings.
Change is compelled by external forces and internal requirements, including:
– High operational or technology maintenance costs
– Weak business growth or declining revenue
– Rising customer expectations
– A change in political climate
The success of IT transformation depends on certain factors:
Many organizations put off transformation until their feet are held to the fire as a result of weak revenue, customer dissatisfaction or new, aggressive competitors. Change then becomes a priority, and perhaps more stressful as the board will want to see results from it quickly. Determining what must be done takes time, so it is helpful to proactively recognize when change is needed and plan for it before the damage has occurred.
As discussed previously, an effective integration of people, processes, systems and data is necessary to change organizational design and make the necessary system integrations in complex operational environments. Looking at all parts as a whole can be helpful to make big strides and avoid unnecessary work or micromanagement.
As the transformation will occur alongside regular operations, allocating the bandwidth needed to execute strategies while simultaneously running the business requires careful consideration. If the required human resources are unable to split their focus between core operational tasks and change-related tasks, additional capacity can be brought in. These interim executives must have the expertise and soft skills to empower and lead teams.
An understanding of internal capabilities
Does leadership have all the skills needed for the transformation? More and more, hiring strategies are including transformation skills to judge executives’ capability to lead change. If an assessment reveals gaps in capabilities that could potentially affect the success of the transformation, then hiring for the requisite skills is an option.
A clear vision
One of the crucial aspects of organizational transformation is generating consensus among all stakeholders on the strategy and mission of the change strategy. Setting a clear vision and planning strategic change communication in advance can help limit resistance and unite everyone around the big picture.
Focusing on the Most Important Activities
IT transformation in an organization requires focusing on all aspects of the business. No department or process can be left out of the transformation effort. But when you are undertaking a transformation initiative on such a large scale, it is easy to get overwhelmed and lose sight of the priorities. There are several tasks that need to be completed for carrying out the transformation successfully. All of these tasks have to be undertaken, but there may be exceptions and planning of these activities is equally essential.
Digital tools that organizations can consider include:
Project management tools
A good project management tool can help employees be more productive and improve collaboration among teams. It reduces the pressure on the project manager as a lot of the trivial tasks can be managed through the platform itself. Data and files are accessible to everyone with permission and so sharing of information becomes seamless. Project management tools can significantly reduce the time required to complete a project.
Time tracking tools
Time tracking tools can help keep track of deadlines. They can help measure every team member’s performance with respect to the time they take to complete assigned tasks. If you are using a project management tool, though, a time tracking tool may be unnecessary as the same functionalities are usually available in most of the good project management tools.
Customer relationship management tools
A customer relationship management tool or CRM tool is absolutely essential for most businesses. Since customer experience is such an important aspect of the digital transformation initiative, using a CRM tool can be the best bet here. The CRM tools can help store customer data, lead information, identify sales opportunities, manage service issues, and even help with marketing campaigns. With a CRM tool, information on customer interaction is accessible to anyone who needs it within the organization to improve service quality and customer experience.
Social media management tool
Social media is an important marketing and publicity channel today. Having a digital solution to manage social media marketing campaigns is essential for most companies. These tools can help automate posting on social media as well as recommend best practices and keep track of trends to improve the marketing campaigns.
These are just some examples of essential tools that every organization may need. There are many other options to explore and this is best done during the planning stage itself.
When a large-scale IT change strategy is on the cards, there is a tendency to leave out a critical success driver from consideration – assessing the skills and mindsets needed to drive the transformation. Organizations that perform this assessment are six times more likely to meet their goals from the transformation initiative. The assessment is discussed below:
Using a three-step process to evaluate skillsets for the change strategy
1. The organization should consult experienced change leaders and functional experts to identify the skills most important to continuous technology transformation that generates value but is also in short supply.
2. The next step is evaluating the current skillset using benchmarking, performance assessment and observational assessment. A review of the employee value proposition against competitors’ is also a part of the process.
3. Finally, the organization should prioritize the acquisition of the requisite skills. The gap can be plugged by upskilling existing talent, recruiting new talent or outsourcing the work to expert talent.