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 process, 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 undergo an upgrade in their skills and knowledge to ensure that they continue adding value to the organization.
Although there is always a 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 status 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 such change and that is when it loses its purpose. 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 the competition.
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 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 best practices listed down 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 a lot of 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 adopt change. How the employees or management in an organization acknowledge and address the rapid change in IT? Does the organization simply try to overlook the changes in IT adoption around it 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 but the fact remains that 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 or 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 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 drive transformation?
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 more on innovation.
But most of the successful organizations are able to strike a balance, dividing their time and resources between both the management of existing resources as well as the adoption of new ones. This 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 best 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.
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. They include 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 from 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 the opportunity to develop cross-functional skills.
• Potential for greater efficiency from an optimum use of resource and lesser wastage.
• 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.
• Power is distributed evenly, empowering employees to act quickly.
• Faster and better decision-making
• Able to adjust quickly to changing environments
• Can increase transparency and accountability within the organization.
• Reduces control
• Can create too much individualism, causing employees to lose sight of the big picture.
• 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 provided a holistic picture of what the organization will look like some time into the future. It guides transformation efforts, inspiring everyone to move forward and reducing conflict by everything in sync within 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 everyone into stride. 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 you have set 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 certain commonly seen 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 left just as a branding or marketing tool. It is more for internal use than for showcasing to the outside world. Setting a vision and not working upon it is the biggest mistake any organization can make. By that, we don’t mean, though, that the vision is a binding statement and all employees must work within its boundaries. The vision should restrict employees or limit their ideas. Employees should have the freedom to come forward with new ideas that can improve the transformation initiative in any way. The vision should only be 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 has to 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 clarity and set clear expectations.
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 the IT transformation vision of the company.
Lastly, the vision requires leaders to take into account 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 set up without this initial analysis can never give you the real picture. Focusing on the business capabilities is extremely important when setting vision and goals.
Setting achievable goals for IT transformation
Measurable objectives collectively help fulfill the goals of IT transformation in an organization. Setting some 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 have 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 system 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 (ex: 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 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 can take several months or even 2-3 years. They should guard against losing sight of the journey or motivation halfway. As challenges are inevitable as the transformation progresses, project stakeholders must also be prepared to flex and adapt as needed.
After the new systems have been implemented, they might need to be integrated with existing systems and require people to shift to new ways of working. The transformation plan should plan for these aspects, identifying the communication and training needed to settle everyone into the new system.
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 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 slightly to accommodate these new opportunities. It may also sometimes be necessary to slightly 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.
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 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 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 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.
UC&C is a potential IT service area for organizations that have been slow to adopt digital communication tools. Start-ups and smaller companies have 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 but negotiations and team meetings, video chats are ideal. Videoconferencing tools such as Microsoft Teams, Google Meet and Zoom Meetings enable team chats and file sharing. The organization can, after a comparison of the features and pricing of various videoconferencing tools, establish one officially 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 an option for those who aren’t digitally proficient or have less experience using digital communication tools.
Cyberattacks have become increasingly sophisticated and insidious. Most companies are able to detect a data breach nearly six months after the event has taken place. This includes top players such as Facebook, Equifax and Capital One.
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 containing 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 denying access after a certain period if the password hasn’t been changed in a while.
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.
– 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.
– 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, specially 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 open an unsecure website or clicks on unsafe links. It is certainly not possible to monitor each and every employee’s browsing activity, but 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, firewall 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 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 effects, 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 costs 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 for 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.
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 consequence has 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 are going to choose is to conduct a SWOT analysis along with your team. SWOT or 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 communication addresses resistance to transformation through open and frequent conversations with the people affected by the change about the impact and benefits of the initiative. Employees 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 in 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 an IT-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 has to procure from external sources.
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 has to 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.
• Involve 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 actually 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 with the system has always 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 team
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 that the company collects and analyses and the insights gained from it is of utmost importance to the IT 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 made a deliberate effort to figure out what clients valued 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 telephones and e-mails should never have frequent breakdowns to ensure their reliability as a means of communication.
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 this information goes out, customer information is at stake, and the business that fails to take due care may end up losing customers. Businesses must ensure that any communication mechanism that is used to send out sensitive information must be 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 wastage of 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 process becomes much more involving and takes 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 division of responsibility for any task. Decisions take a collective effort. Until and unless there is deliberate effort to follow up on the progress of an action, individuals tasked with implementation may evade responsibility. To reduce the chances of this happening, it is necessary to have tight terms of reference for individuals, thereby making it clear where ultimate responsibility lies.
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 clearly. 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 not just 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 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 to create a culture of open discussion, while making sure that feedback is listened to and responded to.
• To encourage your staff to make appropriate representations to senior management. If your staff wishes to raise a more serious issue, they should be encouraged to present their feelings directly to senior management, without the fear of repercussions.
• To 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.
• To have standards in place against which 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.
• To have 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 whom to communicate to as 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 original 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 out of office. Companies can ‘reset’ bonds and increase team members’ morale by reimagining the office as a community where people come together to solve problems.
Build team cohesion and social connectedness: The loneliness that sets in among employees working remotely for months can weaken team identity and connect. Companies need to build communication structures that maintain or create trust and 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 regularly already manage an important feedback mechanism. There are a number of tools available for monitoring customer service. These tools include suggestion boxes, service quality questionnaires, mystery shopping, focus group discussions, and many more.
Organizations should make it easy for customers to make 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 were acted upon.
Also, when customers’ comments come to a central point it becomes much easier to identify whether comments were a one-time event or were symptomatic of a wider issue. For making it easier for customers to make complaints businesses should be careful to identify staff clearly, especially in situations where many different employees can 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 instill hope and encourage innovation. That said, stretching a goal too far only leads to disappointment. Here is how you can 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 whether small successes are possible along the way or the journey will be paved with failures.
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 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.
– The team leader or any senior expert brought in to advise the team should 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.
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.
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 so as to be absolutely clear and not give rise to any doubts or confusions. 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