More than two-thirds of senior managers say their company will no longer be competitive by the end of the decade if they don’t become more digitized. These managers increasingly use data and technology to build new business models, expand business process and decision making automation, or develop new products and services.
CIOs certainly have an important role to play in all this but it requires them to navigate two different parts of the company: guiding senior execs to make the right decisions and to define the firm’s digital ambitions while, at the same time, preparing IT to support those digital ambitions.
The Five Changes
CIOs will have to guide their function through some major changes to support this digitization. From conversations with numerous CIOs and other IT leaders, there are five changes that stand out if corporate IT is going to advise, coach, and consult with business partners in support of a much more digital future.
Define IT’s digital mandate: Digitization requires IT to shift between providing new technology, consulting, brokering, and coaching, depending on where it has a comparative advantage. Corporate IT will neither be the source of all digitization ideas nor the source of all funding.
One consumer goods company in CEB’s networks of IT professionals, for instance, educates IT staff on the levels of technology experimentation that business functions can undertake independently and where IT can help ensure that the technology is used widely and is integrated properly.
Streamline intra-IT interdependencies: On average, 39% of IT projects employed Agile development methods last year. As IT leaders use iterative methods for a larger number of projects, they find that coordination between applications teams, IT infrastructure teams, Information Risk, and Enterprise Architecture are among the greatest roadblocks.
CIOs can apply a range of solutions to streamline these intra-IT interdependencies. One leading technology company in CEB’s networks, for instance, details the handoffs from one team to another in any project plan, and lists the biggest “pain points” within IT to improve collaboration.
Flex IT’s sourcing strategies: The sheer number of technology vendors that support digitization is reshaping the vendor landscape into a fragmented and often immature marketplace. Extracting full value from these new and emerging vendors requires IT leaders to adapt their sourcing strategies to rapidly onboard vendors of all types and sizes.
One software company, for instance, rewrote the rules of vendor selection using the same criteria that venture capitalists use to evaluate their investments in startups. This helped the IT team understand whether an new vendor would be useful and help come up with new ideas.
Build a more relevant workforce: Digitization requires changes to many roles and competencies within IT. Most IT functions have short-term plans to fill their talent gaps, but only a few have a longer-term talent strategy that supports their digitization objectives and encompasses technical talent needs across the company, not just in IT.
One approach for companies to get the right talent in place is to create a multiyear strategic IT workforce plan. Differentiated by its broad scope and long-term orientation, IT strategic workforce planning ensures the right talent is on hand when it’s needed.
Build a climate of openness in IT: Digitization also requires IT teams to engage much more with employees and leaders in other functions who wish to take on their own digitization initiatives. Not surprisingly, one of the greatest challenges to broad-based digitization is the risk-averse mind-set of IT staff.
In response, one leading media company in CEB’s networks uses gamification principles to encourage IT employees to learn from their experiences of acceptable types of failure and make them open to risk, collaboration, and new ways of working.