Identify which parts of the business can be digitally transformed ... Beyond working side-by-side with the business duri
IT Leadership for a Digitally Transforming World The Digital Divide Develops Two-thirds of CEOs in the G2000 will put digital transformation (DX) at the center of their corporate strategy in the next 24 months, according IDC’s 2016 FutureScape predictions for Digital Transformation. Those companies that do not initiate a DX initiative will find themselves struggling to respond to changing market demands and also find it difficult to stay profitable. We expect their very survival will be threatened. Given the strategic importance and sense of urgency organizations feel to digitally transform, some CEOs are electing to put a chief digital officer in place. In other cases, separate digital businesses are being established. Either option leaves IT organizations unsure of where they fit in with DX and what their role should be.
The Need for IT in DX Initiatives A recent IDC research study with 300 line of businesses executives provides IT organizations with reassurance there are important roles for them to play. The following three roles were identified most often: • Identify which parts of the business can be digitally transformed • Identify emerging technologies that accelerate digital transformation • Manage digital project implementations Beyond working side-by-side with the business during the digital innovation stage, IDC believes the IT organization is needed to ensure the digital innovations are ultimately integrated into the enterprise IT platform. IT can also ensure existing systems are transformed to a flexible and optimized IT infrastructure that is capable of supporting a digital enterprise.
Transforming IT First For many IT organizations, an overhaul of IT culture, talent, service management, vendor management and operations are in order before they can be an effective partner in digital transformation. According to a recent IDC benchmark study, only 17% of IT organizations are functioning as “DX Change Agents” or “DX Visionaries” when partnering with the line of business. The rest are still finding their way. To help IT leaders map out the transformation required from within, IDC developed an IT leadership framework for digital transformation, called “Leading in 3D”. Digital savvy IT organizations need to tackle three dimension of IT transformation simultaneously:
Dimension 1: Innovate with the business to create a digital enterprise.
This dimension addresses the need for IT to serve as an innovation engine. Digital savvy IT organizations work closely with the business in an agile manner to create new digital capabilities. Such organizations require an innovation culture, a deep understanding of business and consumers, and IT talent versed in digital technologies.
Dimension 2: Integrate digital capabilities with the enterprise platform.
Once the digital innovations have been generated, it is incumbent upon the IT organization to ensure a reliable, scalable and secure digital infrastructure is in place. When and how the digital assets are integrated into the enterprise platform is up to the IT organization. A focus on enterprise architecture, service management, security, and program management come into play heavily in this dimension.
Dimension 3: Incorporate new techniques and technologies into the IT organization.
For many IT organizations, legacy systems are seen as a barrier to innovation. Digital savvy organizations create a flexible and optimized IT infrastructure that is capable of supporting the digital enterprise by selectively infusing the environment with digital techniques and technologies. Through a careful balancing act, they adeptly parse their resources to drive innovation while still running the current IT environment.
A Virtual Cycle of Innovation Leading in 3D is the process of managing continuous transition from old to new and from experimental to operational in the context of digital transformation. It requires IT leaders to simultaneously transform a multitude of domains ranging from IT talent to services management to IT operations. IT organizations begin their transformational journey by assessing where they currently stand in each of the three dimensions i.e. innovate, integrate and incorporate. For each dimension, they must create a roadmap for transforming. Below lists the priorities IDC believes should top most Leading in 3D roadmaps.
Innovate
Integrate
Incorporate
Rebalance IT’s talent portfolio for digital competencies
Implement cross functional DX program management
Modernize infrastructure to support digital organization
Generate multi-tier digital revenue strategies
Broker, integrate and orchestrate delivery of IT services
Reorganize vendor sourcing for legacy transformation
Develop consumer engagement expertise Create an innovation culture
Prioritize IT integration efforts
Drive innovation while running current IT environment
Deliver enterprise applications on standard platforms
Selectively incorporate new skills into existing IT organization
While there is a large amount of change that must take place in a short period of time, those IT organizations that can master this will find themselves in a virtual cycle of innovation. Such IT organizations will be able to drive the initiatives that shape future business models and create best-in-industry digital products and services.
