A business-focused perspective on how IT leaders can drive, prepare and accelerate digital transformation
Innovate Your Business with Confidence
Many companies desire to innovate their IT departments for future objectives and competition. However, far too many that set out on a Digital Transformation (DX) journey fail due to lack of strategy and buy-in. This guide gives actionable advice to ensure success of the DX journey.
Chapter 1: What is Digital Transformation?
Establishing a Common Understanding
Recognizing Your Stance for the Future
In its most simplistic definition, Digital Transformation (DX) is the practice of transforming business with the use of digital technology. Given the reliance upon technology to move modern business forward, the ultimate goal of DX is to enable organizations to proactively recognize opportunities to gain an advantage in their competitive landscape. This often demands considerable rethinking of existing internal practices in favor of new, more innovative ones.
Sometimes confused with “digital disruption,” it’s important to note that DX doesn’t always mean becoming the next Uber or AirBnB to digitally transform for the future. Instead, companies need to be aware of where a likely disruption might come from and be prepared to address it. A DX initiative is often about building ideas for new revenue streams based on business goals for the long-term and insights from within the business.
Companies that Implement DX Often See the Following Results
- Increased productivity and operational efficiency
- Improved Customer Experience
- Flexibility and scalability to support dynamic needs of the business
The Evolution of the IT Department
At the heart of these improvements, though, is the evolution of the IT department. IT teams must gain a deep understanding of organizational business objectives, needs and challenges in order to effectively align technologies to drive desired business outcomes. DX can help IT teams make the shift from being utility service providers to being centers of innovation and revenue generation.
“Companies engaged in digital transformation most likely understand that what made them successful in the past won’t help them succeed in a digital economy. A digital transformation involves rethinking the company’s value proposition, not just its operations. This means innovating to deliver enhanced products, services, and customer engagement.”
Jeanne Ross, Principle Research Scientist, MIT Sloan
Source: Digital transformation requires digitization–and a whole lot more
DX covers every aspect of a business such as Sales, Marketing, and Human Resources, but the foundation of this transformation is driven by a business-aligned IT strategy. The IT department falls squarely into consideration when business leaders desire to digitally transform their organizations. This means IT teams must have a keen eye for the specific underlying technologies necessary to achieve an effective and efficient business model. As such, the IT department is the linchpin that determines the success of an organization’s DX journey. For this reason, we’ve built this guide. We hope that our definitions, tips and suggestions will help to facilitate your IT team as they drive your organization into this new territory.
Success in Digital Transformation is not about strengthening or bettering your company; it is about exposing new business and growth opportunities. The InterVision DXS team understands that, at the end of the day, digital transformation is all about your business.
Chapter 2: Why are Companies Asking IT Departments to Transform
The Impetus of Digital Transformation
Innovation as the Key to the Future
IT departments should be actively enabling company growth and pushing their organizations into the future with confidence. This can be a difficult objective, however, when many IT departments have stagnant budgets, operate with outdated infrastructure, and are overburdened with the tasks of keeping operations running. On top of this, there is a general perception among too many business leaders that IT is a cost center rather than an innovation driver. Together, these collective frustrations make the concept of DX particularly attractive to business leaders.
“In an increasingly digitizing business world, most companies need better digital leadership and coordination. You need to create a compelling digital vision, coordinate digital investments, drive appropriate synergies, build a clean technology platform, and foster innovation. You need to energize a busy workforce and generate shared understanding in your senior executive team.”
George Westerman, Researcher and author of Leading Digital: Turning Technology into Business Transformation, MIT Sloan
Source: Should Your CIO Be a Chief Digital Officer?
DX demands the IT team take a leading role in moving the business toward innovative practices. Unfortunately, when other departments are misaligned with IT, it often paralyzes IT teams from taking this leading role. When executive leaders are apprehensive about launching DX, despite knowing the inherent value of it, they are apprehensive partly due to departmental misalignment. These executives may not be actively listening to IT’s concerns and therefore, the misalignment could be coming from the leadership level as well.
IT Alignment with the Business
In these organizations where confidence in IT is lacking, there’s usually an IT team that is focused too heavily on tasks that “keep the lights on.” Oftentimes, they’re overwhelmed with day-to-day tactical challenges around managing technology infrastructure and providing basic services and support for the business. It’s not that these IT teams typically lack the skillsets and the desire to be more involved with business decisions; they are challenged with outdated infrastructure, stagnant budgets, resource constraints, and lack of executive support.
“Digital transformation is about how technology changes the conditions under which business is done, in ways that change the expectations of customers, partners, and employees.”
Gerald C. Kane, Professor of Information Systems, Boston College
Source: Digital Transformation’ is a Misnomer
On the other hand, within organizations where executive leadership is eager and willing to move forward with DX, there’s confidence that comes from having an IT team that is well-aligned with business needs and challenges. IT managers and executives in this case will usually have an established, ongoing dialogue around cyber threats, innovations within the market, and any IT project challenges they encounter. The IT department “has a seat at the table” to help drive the business forward. When executive leaders partner with IT, setting them up to succeed, it is much easier to approach DX with the required holistic perspective to achieve their competitive objectives.
How to Flip from Misalignment to Alignment
No business department is immune from misalignment. In fact, usually when misalignment exists in one department, other departments are often feeling the same. For IT teams that are struggling to ensure ongoing alignment with their business, try improving your relations with these steps:
- Open a dialogue with an executive leader (CEO, COO, etc.) as a way to reaffirm your IT department’s direction as it relates to the rest of the business
- Listen to what the executive leader’s goals are and figure out how your department can assist in these goals
- Make this dialogue a common occurrence, even if it’s a short monthly meeting or lunch between yourself and that executive leader
- Pick a different business unit and repeat these steps to establish ongoing dialogue with the whole business
Digital Transformation Is the IT Team’s Shining Moment
Because DX demands a certain level of trust placed in the IT team in order to move forward, DX is the IT team’s magic moment to show the rest of their organization that they can evolve into a business enabler. The organization is asking for this. Sometimes, this shift may mean a cultural re-education and hard conversations with executive leadership to secure buy-in and set accurate expectations around the strategy and technology needed for DX. All indications are that the change will be worth it in the end.
The extensive experience and deep expertise of InterVision’s digital transformation practice consultants resulted in a framework that guides the 360-degree view of digital transformation for our clients.
Chapter 3: The Role of the IT Team in Digital Transformation
The Moment to Evolve Is Now
What It Takes to Transform
As with any large-scale business initiative, executive leadership must be supportive of the Digital Transformation (DX) journey in order for it to be successful. But the onus of success doesn’t fall squarely on executives. Without a holistic perspective from every business unit, portions of the organization risk being shortchanged. The IT department, more than every other business department, has a unique perspective of the fast-evolving technology landscape and where it could be in the next five years and so on. From business continuity and cybersecurity to applications and infrastructure, IT has a wealth of expertise that can be leveraged for the DX journey to put “digital” to work for the business.
In some cases, the CEO might be asking the IT department to assist with DX. In the ideal scenario however, the IT department itself would be leading the charge along with the CEO. Indeed, the CIO should be in the driver’s seat—if not, someone else will end up doing IT for the company. During the DX journey, IT department should act as a hub to drive the DX experience and the business’s leadership should take a supporting role.
“Digital is not doing what you have always done but doing it faster and cheaper. Digital is a full-scale transformation of nearly every facet of your business.”
Martha Heller, CIO, Heller Search Associates
Source: What does it mean to be a transformational IT leader today?
A Value-Focused Approach
To aid in the DX journey, IT must shift away from their traditional perspectives and begin providing more visible value back to the business. DX is well-suited to push for this change, since it acts to build a greater connection between IT and the business. The more aligned IT becomes with the organization and its goals, the more they will be able to see their own purpose and ultimate goals
Getting Started: Grade IT Responsibilities by Their Type of Impact
- Responsibilities that contribute innovative value to the business and increase market competitiveness
- Responsibilities that contribute differentiating value to the business
- Responsibilities that contribute competitive value to the business
- Responsibilities that contribute operational value to the business (“keep the lights on”) and are time-consuming to execute
- Responsibilities that don’t contribute any value to the business and are prone to failures and outages
DX means creating new revenue lines based upon data you already have. New technologies will no doubt be adopted during the DX process, so IT must facilitate these digital changes within the business for a seamless user experience. To free up the resources needed to give this attention to the business, IT should reassess all existing operational tasks and consider whether or not these tasks are core to the organization’s identity. If they’re not, then they need to be minimized. This often means offloading all “keeping the lights on” duties because these things don’t contribute direct value back to the business.
“The person who wants to lead IT with strategic vision must aspire to be more of a business person than a technologist…For the CIO who lives and breathes their business, the industry gets ingrained in who they are and how they think about technology.”
Jeff Ton, Author of Amplify Your Value: Leading IT with Strategic Vision
Source: Amplify Your Value: Leading IT with Strategic Vision
New Responsibilities for Greater Impact
During the DX journey, the IT team will need to focus their attention on becoming innovators for the business, which means becoming fluent in these roles:
- Brokers: When tasks that aren’t core to the business are offloaded, IT must act as the conduit between these third-party providers and the rest of the organization.
- Assemblers: Able to focus more on core technologies, IT will build more micro-applications into business processes to support customer experience. Think of it as providing your business pre-fab housing to build homes upon.
- Integrators: With less focus on building applications from scratch, IT will facilitate daily business by supporting the integration of value-driving applications from third parties.
- Innovators: Consider all viable options regardless of bias toward status quo. Be the voice of change, but also the hand of reason, when it comes to applying new digital solutions to old business problems.
Chapter 4: Core Tenets of DX: Cloud and Digital Transformation
Building the Foundation for DX Technology
Building a Reliable Stance for the Future
In any Digital Transformation (DX) journey, it’s expected that technology will help to move the business into the future. That’s why it’s crucial to build a strong “digital infrastructure” upon which to transform your IT systems. Digital infrastructure describes a dynamic environment that aims at enabling software-defined infrastructure and software-based policies to adapt more readily to business needs. This can be done on any type of datacenter infrastructure, from physical hardware to a hybrid setup to a fully-virtualized cloud environment. In every respect, digital infrastructure is the building block for adopting specific applications and automating practices that serve the business. In choosing the right digital infrastructure to embrace, your business should consider what “availability,” “accessibility” and “security” is desired of your technology systems to achieve objectives. If having a datacenter managed in-house is core to the business itself, then it makes sense to maneuver DX toward that goal. If not, then don’t be too married to the idea. Explore ways to offload these aspects to an expert third party, since this will enable you to better embrace activities that are core to the business.
Using Cloud to Accomplish Goals
As you consider your IT vision for DX, cloud is just one strategy to deliver digital solutions and services to the business. What makes cloud enablement different from other IT strategies is the facilitating role it’s well-suited to play in the DX journey.
“The cloud promises so much – almost instantaneous, pay-as-you-go access to enterprise-class software, services and infrastructure, the ability to rapidly scale applications to cope with the peaks and troughs of seasonal traffic, as well as cost-effectiveness. However, organizations must adapt to take advantage of the benefits that cloud offers in alignment with their wider business strategy.”
Nick Ismail, Editor, Information Age
Source: Cloud strategies for digital transformation
Cloud is a way to reduce the repetitive nature of managing applications and infrastructure. With physical IT systems, you often need to perform a hardware refresh every couple of years. With cloud, you can leverage increased flexibility by provisioning Infrastructure as Code for quick updates, and flip server operations over to a new location to perform maintenance. In addition, you can spin up AND shrink down any IT solution at a moment’s notice. This flexible capacity is like being able to build a staircase, then smooth out that staircase into a walkway whenever needed. Purchasing physical systems doesn’t allow for this quick downsizing, since you’re tied to sunken capital investments rather than operating costs that can be adjusted.
“To keep pace with modern business, companies must continually position themselves in the best possible stance to embrace new growth and adapt quickly to evolving market pressures. Technology, more than ever, has become integral to accelerating advancement and efficiency.”
Vic Tingler, VP of Digital Transformation, InterVision
Source: 4 Truths and a Lie About Digital Transformation
When considering whether cloud is right for your business, think of what level of agility you need in order to meet growing demands in your competitive industry.
- Do you need multiple points of access to support a mobile-focused initiative?
- How quickly will employees need to serve customers?
- How fast can you recover from any given disaster scenario?
- How do you enable your organization to dynamically respond to business drivers?
These are all examples where cloud can make a substantial difference. But sometimes, cloud might not be the best fit for your business. Here are a couple reasons why some do NOT move to cloud:
- Legacy applications not designed for the cloud
- Some applications or services simply will either not perform optimally in a public cloud platform or be supported by your product developer.
- Physical connectivity and bandwidth limitations
- If the consumer is located in geographical area with limited WAN bandwidth, it may be more effective to have IT assets installed locally.
- TCO/ROI may not make sense
- If the application is very static and does not scale or flex, the cost justification may not exit for consumption-based cloud platforms.
- Security and regulatory requirements
While this is a diminishing argument, there are still existing use cases for some clients that do not allow for data to live outside of a secure, local datacenter.
People and Process changes
In some cases, personnel and process may be either too disruptive or costly to allow for an immediate move to the cloud. This typically is a short-term barrier rather than a long-term strategic roadblock.
- Business objectives in refactoring applications and workflow analysis
- Leveraging new tools where they make sense and standardizing on common frameworks will ultimately incorporate a distributed and secure design.
DX can assist in driving a faster, more efficient IT stance. Even if the cloud isn’t right for your organization in the moment, this doesn’t mean it won’t be a right choice later down the road. For this reason, it’s key to assess company goals not just for the next year, but for the next decade as well. This focused planning will ultimately determine which technology choices you make.
Chapter 5: Core Tenets of DX: Security and Digital Transformation
Protecting Digital Investments
What it Means to be Secure
Digital Transformation (DX) represents a huge opportunity to grow your business for the future in a smart way. However, it’s paramount to also secure IT systems and data at every stage of the DX journey. This protection of assets notes the process of “digital resiliency,” which leverages digital solutions to secure subsequent digital solutions. This use of technology assists in some of the more manual processes that contributed to slow-paced, traditional security measures.
Like any good security professional might tell you, robust protection demands a holistic approach to ensure no vulnerabilities exist. And using a technology set to protect other technologies shouldn’t be the only gatekeeper of your IT systems. Since no single solution is ever 100% effective, especially when cybercriminals are getting more sophisticated each year, it’s important to have a backup plan to your primary plan. In other words, a two-pronged approach is necessary to ensure holistic cybersecurity against threats of data loss, exposure and downtime. But what does this specifically look like?
Sanction vs. Control
It’s key to remember that when using any cloud environment, there’s a shared responsibility with a third party, and it’s essential to see where those responsibilities lie in order to close security gaps. Too often, companies can find their sensitive corporate information sprawled across several applications they might not be knowledgeable of or comfortable with. To embrace new solutions in a controlled manner, keep a list of sanctioned applications to help identify and prevent non-sanctioned ones. When considering these sanctioned applications, also be aware how much and often data is being exchanged between them, and if you approve of this traffic.
“Security should be at the forefront of all digital transformation initiatives, ideally at the planning and design stages right at the beginning. Too often, I see projects that get delayed or railroaded because they are not designed with security in mind or the right principles from the outset. Therefore, when the security team does finally get involved, the entire project gets red flagged.”
Nick McQuire, VP of Enterprise Research, CCS Insight
Source: What is security’s role in digital transformation?
If you haven’t already, establish rules of data governance for the business to define what datasets you deem valuable, where you keep them, who’s using them, who’s storing them and why. If someone asks for this information, would you be able to provide it? For example, the EU’s General Data Protection Regulation (GDPR) requires that organizations track which data is collected on EU citizens, knowing where that data is kept and who has access to it. For companies with global clients, they will be asked to show evidence for this security posture, even if not subject to those regulations.
The roles and responsibilities of IT members managing cybersecurity can make or break even the most advanced technologies, so companies should keep this front and center as they move through DX. As in any business, it’s especially important to have an employee education program that informs the workforce of the latest threats and best practices for handling sensitive data, identifying suspicious emails, and ensuring proper protocols are followed. The changes that often occur in the DX journey make education and re-education particularly important.
These are all examples where cloud can make a substantial difference. But sometimes, cloud might not be the best fit for your business. Here are a couple reasons why some do NOT move to cloud:
DX can assist in driving a faster, more efficient IT stance. Even if the cloud isn’t right for your organization in the moment, this doesn’t mean it won’t be a right choice later down the road. For this reason, it’s key to assess company goals not just for the next year, but for the next decade as well. This focused planning will ultimately determine which technology choices you make.
