MOST Analysis

Mission Statement

When it comes to IT transformation, there are a number of risks that organizations need to be aware of. By not taking into account the potential risks, companies can end up making costly mistakes. Companies are looking to grab any technology-driven advantage they can as they adapt to new ways of working, managing employees, and serving customers. They are making bigger moves toward the cloud, e-commerce, digital supply chains, artificial intelligence (AI) and machine learning (ML), data analytics, and other areas that can deliver efficiency and innovation. At the same time, enterprises are trying to manage risk — and the same digital initiatives that create new opportunities can also lead to risks such as security breaches, regulatory compliance failures, and other setbacks. The result is an ongoing conflict between the need to innovate and the need to mitigate risk. While the rewards of a successful IT transformation are clear, there are also risks that businesses must consider and manage carefully. By understanding these risk in digital transformation and taking steps to mitigate them, your organization can confidently move forward with its digital transformation initiative.

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Objectives

01. Technology Risks: departmental SWOT analysis; strategy research & development. Time Allocated: 1 Month
02. Workforce Risks: departmental SWOT analysis; strategy research & development. Time Allocated: 1 Month
03. Automation Risks: departmental SWOT analysis; strategy research & development. Time Allocated: 1 Month
04. Compliance Risks: departmental SWOT analysis; strategy research & development. Time Allocated: 1 Month
05. Cloud Risks: departmental SWOT analysis; strategy research & development. Time Allocated: 1 Month
06. Cybersecurity Risks: departmental SWOT analysis; strategy research & development. Time Allocated: 1 Month
07. Resiliency Risks: departmental SWOT analysis; strategy research & development. 1 Month
08. Third Party Risks: departmental SWOT analysis; strategy research & development. Time Allocated: 1 Month

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Strategies

01. Technology Risks: Each individual department head to undertake departmental SWOT analysis; strategy research & development.
02. Workforce Risks: Each individual department head to undertake departmental SWOT analysis; strategy research & development.
03. Automation Risks: Each individual department head to undertake departmental SWOT analysis; strategy research & development.
04. Compliance Risks: Each individual department head to undertake departmental SWOT analysis; strategy research & development.
05. Cloud Risks: Each individual department head to undertake departmental SWOT analysis; strategy research & development.
06. Cybersecurity Risks: Each individual department head to undertake departmental SWOT analysis; strategy research & development.
07. Resiliency Risks: Each individual department head to undertake departmental SWOT analysis; strategy research & development.
08. Third Party Risks: Each individual department head to undertake departmental SWOT analysis; strategy research & development.

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Tasks

01. Create a task on your calendar, to be completed within the next month, to analyze Technology Risks.
02. Create a task on your calendar, to be completed within the next month, to analyze Workforce Risks.
03. Create a task on your calendar, to be completed within the next month, to analyze Automation Risks.
04. Create a task on your calendar, to be completed within the next month, to analyze Compliance Risks.
05. Create a task on your calendar, to be completed within the next month, to analyze Cloud Risks.
06. Create a task on your calendar, to be completed within the next month, to analyze Cybersecurity Risks.
07. Create a task on your calendar, to be completed within the next month, to analyze Resiliency Risks.
08. Create a task on your calendar, to be completed within the next month, to analyze Third Party Risks.

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Introduction

Digital Transformation Risks and Mistakes

The Coronavirus crisis has accelerated a global digital pivot, forcing businesses to rethink their processes and strategies for a new reality. Analysts from HBR, Gartner, Forrester, McKinsey and more are all saying the same thing – investing in technology will help mitigate the impact of this event, both right now and in the long term.

But what if you’re among the 30% of organizations who haven’t yet made any major digital shifts, even before the pandemic started?
Now that transitioning to digital is not just important but urgent, you could actually be in a better position than some of your competitors, who may be partway through their technology initiatives and must now suddenly shift gears.

You have the opportunity to transition to technologies that reflect where your systems and customers are now, where they’re headed, and the trends that will shape business in the long haul, post-crisis.

But first, you need to be aware of the most common digital transformation risks and mistakes to avoid.

Mistake #1: Shiny object syndrome

Sometimes businesses will embrace a technology trend, such as AI chatbots or automation, whether it’s because they feel compelled to digitize or because the idea intrigues them.

Many businesses are instinctively looking for a quick fix or a solution that just appears out of nowhere to put things back on track, especially in the present climate of uncertainty. But by alone, these single-technology solutions won’t live up to the expectations.

Any use of a new technology must be integrated into a broader strategy for the business and the customer experience, rather than being done only once.

Mistake #2: Staying siloed

The CIO or the IT department are not the only ones who must handle digital transformation. It affects every division of your business, including sales, marketing, finance, and human resources. It’s very likely to fail if you try to implement a change without including all departments.

Top-down cultural issues like transformation necessitate everyone’s comprehension, a change in thinking, and buy-in. And now that transformation is no longer an option but rather a requirement for almost every firm worldwide, it’s critical that everyone in your organization is informed, on board, and equipped to change.

Mistake #3: Doing too much too soon

This may seem contradictory given the pressing need for firms to go digital.

Yes, you must move quickly.

However, you must also approach it in a way that maximizes your chances of success. You might currently be concentrating on your “no fail” tasks, or the crucial business procedures that must continue in order for the organization to survive. This is a fantastic illustration of how the priorities for transformation will be determined by our new normal.

What unexpected needs or expectations do customers (and workers) have today that you are not currently meeting?

Beginning there, move forward in a method that enables you to move fast while remaining safe. This entails experimenting regularly, working slowly, and having the flexibility to pivot as necessary. Because what is required and anticipated in a month or a year from now can be entirely different, and you want to be able to change swiftly.

When moving from plan to implementation, you frequently encounter issues because the company adopted a “big bang” strategy and discovered all of the leaks in the pipes far too late…When they could have learned more quickly and cheaply by doing modest tests.

Another possibility is that they gain a lot of momentum in the beginning but quickly exhaust their leaders and talent due to doing too much too soon. In order to accelerate digital transformation effectively, one must first slow things down.

Start your digital journey by considering the four S’s: When adopting digital, set a SIMPLE goal, ensure that your leaders are behind it, start small, and sustain energy by not overloading leaders, employees, or teams.

Mistake #4: Underestimating the extent of change

It could be tempting to focus your digital initiatives only on pressing requirements like infrastructure security, telecommuting, and supply chain diversification. With this strategy, businesses typically want to keep costs to a minimum, get through the crisis, resume normal operations, and then think about investing more in digital once sales have stabilized a bit.

We firmly believe that this is a mistake, nevertheless. It’s difficult to think that things will ever return to “business as usual,” despite the fact that no one can foretell the future. According to Harvard Business Review,

“Vision is especially urgent during a crisis as global and systematic as this one. Inflections that you might have had five years to anticipate in a normal environment might unfold in a matter of weeks or months.

Trend lines, such as those towards telecommuting, telemedicine, online shopping, and digital media consumption, are suddenly much steeper…Some of the fundamental assumptions underlying your current business model may have been (or may soon be) upended.

In short, the business environment that you land in when the pandemic comes to an end – which could be one to two years from now – may be very different from what it was before the crisis began.

You need to begin preparing for it now.”

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Case Study: Why you should design better UIs (and not make your creditors mad)

“if it ain’t broke, don’t fix it” is a common company philosophy when it comes to IT products, and if you’ve ever been involved in a failed upgrade or deployment, you understand why. However, this can lead to some seriously antiquated systems being used in production with UIs that date back to the early days of the software industry, which can lead to usability issues with real-world repercussions.

This trend is well shown by one of Citibank’s back-end systems, which was also the main contributor to a $500 million error. The narrative goes as follows: On behalf of Revlon, one of Citibank’s clients, Citibank was attempting to pay interest to numerous of Revlon’s creditors in the amount of $7.8 million. To calculate the interest properly, Citibank’s employees had to set up a transaction as if they were paying off the entire loan. They then had to check multiple boxes to send the majority of the payment to an internal Citibank account while only the interest portion went to creditors. Doing that in Flexcube, an outdated piece of in-house Citibank software, was a particularly cumbersome process. Even though this deal for Revlon was approved by three different individuals, it proceeded without all the necessary checks being made, and $900 million was distributed, the majority of which wasn’t due to creditors until 2023.

You might be surprised to learn that this kind of blunder is not unheard of and that the party receiving the payment typically returns the incorrectly transmitted funds to the entity that made the error. But this time, things went differently: More than half of the monies distributed went to various hedge funds, who were still irate that the loan’s terms had been altered in a way that favored Revlon. A judge decided last year that they were not required to return the money because they said they saw it as an early payment of the obligation they were owed.

The main takeaway from this is to, at the very least, update your user interfaces to ensure that staff can carry out their tasks efficiently and coherently. Another important takeaway is that, when mistakes aren’t exploited, they can be less painful.

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More IT transformation risks you may come across

Faulty digital transformation premises

You may be familiar with this remark from the film The Big Short:

It’s a great summary of the factors that contributed to the 2008 financial catastrophe and the irrational optimism that caused it. It also exemplifies what we observe in big businesses undergoing digital transformation.

For instance, many large businesses are currently undergoing or intend to begin an end-to-end ERP upgrade to the cloud. It is assumed that an ERP upgrade will produce business outcomes that boost profitability and enhance operations.

However, this is absolutely untrue. There is a ton of proof for this. Major ERP provider is implemented by large company. 36 months later, they are still having trouble locating the value.

This isn’t because putting in place an ERP based in the cloud is a terrible idea. It’s really good. However, this usually gives you the capacity to use your data in novel ways, opening up chances for increased profitability and operational efficiency. It cannot complete it on its own.

Without the necessary production deployment skills, driving innovation

Nowadays, chief digital officers are employed by many businesses. Some organizations have innovation teams and even funds for innovation. Design sprints, hackat