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How to Stop Digitization Turning Your Firm into a Digital Gulliver

Although most managers want their firm to digitize, existing systems and cultures combine to slow down many small steps in the process; much like the Lilliputians bringing down Gulliver in Swift's famous satire

The idea of digitization, which is essentially the change from accomplishing tasks by physical or “analog” means to using digital technology and data, is as old as computing itself.

But in the past five years or so, the intensity and significance of this shift has meant that it’s become a high priority for companies in pretty much every industry and part of the world and worries and excites senior managers – including CEOs, CIOs, CMOs, heads of HR, CFOs, and heads of business units – in equal share.

Digitization certainly gives companies the chance to exploit sources of data and technology to do many things, such as: create and enhance products and services; help employees collaborate and make better decisions; and create more efficient operations, processes, channels and business models. But digitization is also something they must embrace because otherwise they risk being overtaken by competitors, both incumbents and new entrants to the industry.

The Risk of Becoming a Digital Gulliver

This shift has meant that the IT decision-making has become an essential leadership competency for all managers, much like talent management is something that all successful managers need to be good at.

Over three-quarters (77%) of business leaders’ priorities now depend on technology in some shape or form, according to CEB data. It’s no longer just the IT function delivering IT projects; business leaders now feel confident to spend their own money on technology, as much as 50 cents spent on top of every dollar in the official IT budget.

 

But while in most companies there is a lot of clamor for more digitization, and people are spearheading digitization “projects” across the firm, large companies are often much like Gulliver from Swift’s classic 18th century satire: pinned down by an army of small resisters.

These large numbers of Lilliputian forces include legacy systems used by many employees, or highly-prized skills that are no longer so useful, regulatory and security concerns, and an employee culture that is resistant to change, and they all hold companies and their IT functions back as they try to pivot their operations, channels, and products to digital modes of doing business.

Why IT Collaboration Needs to Change

Of all these constraints, CIOs are placing particular focus on the how their IT team collaborates with the rest of the business. That interface is both within the CIO’s control to shape and is critical to any large digital transformation.

Unfortunately, the existing model for managing the IT-business interface is outmoded, underserves the needs of business partners, and prevents the IT team from delivering on its full potential (see chart 1 for more).


The gap between what business partners want and what they end up with

Chart 1: The gap between what business partners want and what they end up with  n=687-997 business leaders  Source: IT Business Alignment Tool 2013-2015


Today, business leaders have multiple internal and external options for getting hold of and deploying technology. Moreover, unlike past eras in which most technology demand was siloed by business area, digital demand cuts across business areas and is far more interdependent.

Many IT shops employ a single point of contact, such as a business relationship manager (BRM) or business liaison, to address most questions that line managers have. This way of working streamlined communications and focused on relationship building. But many business leaders have outgrown this model and now need broader and more technical support than any one person in IT can provide.

A Better Model for IT Engagement

CIOs need a model for engagement that can be reconfigured based on the type of support business partners need, where, and when. That type of support includes evangelizing emerging technology opportunities, consulting business partners who are pursuing solutions on their own, brokering connections to vendors, coaching employees to build skills, and, of course, providing technology (this post covers the seven types of roles all IT teams will need).

To do all those things in an adaptive fashion without running into resource constraints, the CIOs should follow three guidelines.

  1. Structure engagement around what business partners want to get done, not how the enterprise is currently organized: Leading companies use business capabilities, not functional boundaries, to organize engagement resources.

    For example, one CIO from the technology sector in CEB’s network of IT professionals engages with business partners through a “customer experience service portfolio” in which all capabilities align to defined business activities.

  2. Provide fast, seamless access to technical expertise where it is needed, not filtered by powerless intermediaries: A growing number of business partners want to reach the IT enterprise architects and delivery teams they work with directly and many have the technical skills to interact effectively with IT’s wonkiest elements. In these situations, they believe that BRMs just get in the way.

  3. Establish idea sharing to overcome limitations in individuals’ expertise: The corporate IT teams needs a mechanism to spot and share successful business-led technology experiments across different parts of the company.

    For example, if IT business analysts are embedded in local teams across a global IT function, they should help connect their peers in different regions to the ideas and resources that are providing the most value to business partners.

Whether BRMs go away entirely — or are re-invented — is beside the point. The model for IT-business collaboration needs to change from one-size fits all: IT organizations will need to get better at fluidly engaging with the business in different ways for different purposes.

More On…

  • Digital Enterprise 2020

    These resources will help you understand the future role of digitization at your firm, and the implications for the corporate IT team.

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