Another basic tip for a successful digital transformation is about how to position the leader coordinating the digital transformation journey.
As you have understood from the former tip, a digital transformation is touching all the functions and processes of an enterprise so cannot be imagined under one single direct function like finance, hr, procurement or operations.
The market reacted over the last 8-10 years introducing the concept of a Chief Digital Officer. Some companies have split the roles, between the CDO reporting to CEO and the CIO reporting to one shared or operating function sometime creating huge inconsistencies between wishes, from the CDO and reality from the CIO in terms of maturity and platforms to implement, some others combined the two roles in a more comprehensive CDIO, some others didn’t go thru the formal concept and have a CIO that has an embedded, but not necessarily formalized, digital agenda to execute and other functions are not fully aligned on how and what.
So in any digital transformation “the what” is always with each function leading the purpose of the processes they own and “the how” is with the CIO, to choose proper technologies, long term scalable, properly secured and enterprise-ready.
Gartner made a survey, you can find details in my regular newsletters, about the fact that most advanced digital companies, marked as “digital vanguard” have been particularly successful because the digital Chief lead, let’s call the modern CIO, was positioned to work together with the other C-level to achieve best transformation.
This is I think a crucial aspect of each transformation. It cannot be led only by a CIO executing Finance, HR, Procurement, Operations or Sales transformations on his/her own but is always a co-owned process where the lead is with each single function and the CIO works as consultant and coach in the digital and technology area to make the overall advancing properly integrated and effective. This is also quite relevant from resources perspective because in such initiatives, again digital vanguard companies work with teams cross the functions highly in synergy with different competences.
Now, some companies believe that one function in specific need to develop first, for example Finance, most probably because one of the first that need to be properly digitalized to make it more effective each stream in terms of basic having control on the figures of the company but this causes a clear slow-down and less focus on the other functions that are, naturally, taking less priority for a second stage and are forced meanwhile to approach digitalization a little bit more in isolation, sometime with ad hoc solutions that are not enterprise capable and generate problems as more integration of data come to demand.
Looking to a real Digital Enterprise concept, this is an integrated world touching from the backend to the frontend, touching HR transformation, from Sales thru Operations and Procurement to Finance and involving backend IoT and so on. It’s an integrated as is the Data Level concept and has to be designed in such way.
So companies that keep some departments as second priority in the digital journey, forget that a digital transformation happens at the speed of the slowest department involved and because is strategic to build integrated cross-functions business processes in such digital journey, it’s crucial to have a synergic work cross all the functions.
The effect of a short term thinking, focusing only on one main function to digitalize first is clearly visible when, coming more at data analytics level, a company struggles when need to build comprehensive view of data, for example making value out of revenue streams, in terms of sales per product, how the product is really costing in terms of materials, how the process of generating a product or operating a service costs in term also of people, not only on direct but also on indirect costs and how the chain of procurement is effective cross all the streams.
Where integrated businesses can build such views continuosly in seconds, companies missing an integrated digital enterprise strategy, make their teams departments busy extracting and normalizing data to combine them together taking weeks or more at each iteration to get value of reports that can be outdated just after short time.
This comes more visible when a company wants to use AI effectively to improve its core processes but this is another #GGDT Tip.
GG
