What is digital transformation? A necessary disruption

Digital transformation journey

Here are five steps companies can follow to affect the kind of change they desire.

Align objectives with business goals. Answer the question: What business outcomes do you want to achieve for customers? Stacey Goodman, CIO of insurer Prudential Financial, says its incumbent on IT leaders to know the problem the business is trying to solve, and to align their goals with the outcome the business strives to achieve. “The companies that I come from that have done well were all aligned to the business outcome,” Goodman says. Use your customer journey map as a guide.

IT and business must co-create. Traditionally, IT departments were called on to fix broken services, says Julie Averill, CIO of retailer Lululemon. Today, IT must work as co-creator with the business to solve problems and deliver value for customers. “It has to go both ways,” Averill says. “The business can’t just sit there and demand tech; they have to know what they’re asking for.”

Pick strategic partners. Whether it’s a Big 5 consultancy, system integrator, or a boutique design shop, IT leaders need help fulfilling digital imperatives to reduce time to business value, says Fenwick. Bet on the ones with proven track records whose values most closely align with yours.

Redesign business and products around customer outcomes. This could include using cloud software to accelerate change and embracing artificial intelligence to boost operational efficiency and respond to evolving customer expectations, Fenwick says. Banking services firms, for instance, are changing how they deliver wealth and retirement to consumers by using digital channels, Fenwick adds.  

Retrain employees around digital. Companies seeking to align their digital imperatives with customer preferences must ensure that their employees are on the same page. Financial services firms such as TransUnion and TIAA are reskilling staff in cloud, DevOps, CI/CD, and other modern technologies and practices to fortify themselves for the future. “In the pivot to become a digital business, software has become a strategic asset, so you need the same strategic abilities as a software company,” Fenwick says.

Digital transformation roles and skills

While emerging tech and revamped processes are crucial, having the right skills on staff is essential to any digital transformation.

Software engineers, cloud computing specialists, and digital product managers remain key roles for companies seeking to roll out new products and services. DevOps leaders galvanize software development by merging development with operations, enabling companies to continuously iterate software to speed delivery.

Data scientists and data architects are also in high demand, as companies seek to glean insights out of vast troves of data, and transformations lean increasingly on machine learning and artificial intelligence.

UX designers, digital trainers, writers, conversational brand strategists, forensic analysts, ethics compliance managers, and workplace technology managers round out the talent priorities.

Of course, leadership matters. Many CIOs have appended the chief digital officer (CDO) title to describe their remit, while some are simply rebranded as a CDO. Sometimes the roles CIO and CDO roles are distinctly bifurcated. Typically, these calls are up to the CEO. But it doesn’t matter who owns the digital imperative, as long as someone is competent using technology to drive revenue growth, Fenwick says.

Digital transformation pitfalls

Digital transformations are lagging or even failing for several reasons, including poor leadership, disconnects between IT and the business, lagging employee engagement, and substandard operations, according to a report from Capgemini Digital Transformation Institute and MIT Sloan School of Management.

But the key culprits of a derailed digital transformation are obsession with big bang change, focus on cost cutting as a business driver, and failure to loop in the business.

“Boardrooms and C-suites talk about digital and there is pressure to show something and show results, which creates wrong expectations about how quickly what can be done and when,” says Genpact CEO Tyger Tyagarajan.

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