Some examples of digital transformation are easy to spot and identify. We all know about how Uber is changing transportation, AirBnb upending hospitality, GE betting big on IoT, and IBM leveraging Watson in new AI challenges. If you work for a B2C company or already put out customer facing experiences, then it might be easier to identify new digital opportunities.
Recent news has made me question why some organizations and CIO struggle to define their digital strategy and get started with a transformation program. In one study, 52 percent of companies reported that the CIOs and CTOs were responsible for creating the organization's digital vision, but that they faced roadblocks. In another study, only 40 percent of financial service executives were concerned that their firm and their industry was at risk of major disruption. I read notes on a third study sighting top challenges companies face in corporate innovation.
Why are some industries, and organizations slow to develop digital strategies, transformation programs and innovation practices?
Growing examples of CIOs leading digital transformation
Perhaps it’s not all that bad and the numbers don’t tell the full story. At a recent Sinc USA technology leaders event in Houston, I heard about some shining examples of out-of-the-spotlight organizations having success starting and implementing digital transformations.
- Paul Krueger, CIO of Stewart and Stevenson is becoming cloud ready and implementing more remote monitoring by redesigning his networks and updating security.
- Steve Young, VP of IT at the VIA Metro aligns digital transformation with metro rider experience, recognizing that new services like Uber and technologies like self-driving cars will change commuter needs and city landscapes.
- Rusty Kennington and Walter Meyer of Commercial Metals Company leveraged agile management practices to deploy an ecommerce solution for selling rebar and other commercial metals, then expanded the agile practice and used it to roll out a global ERP program.
Digital advice from CIOs to CIOs
What is some of their advice? Rusty knew that IT had a credibility gap with their field and operating teams and also that his company needed to differentiate the customer experience. “We had to make it easy for customers to do business with us… and we decided to include customers in defining what that looked like.” The results paid off as Commercial Metal Corporation saw market share growth across the Americas and a sizeable percentage coming from the ecommerce channel.
Digital transformation increases the scope and risk of strategic initiatives and CIO are adjusting. Enterprises that are transforming take on a significant number of parallel initiatives, and Paul advises that, “The CIO has to be the hub to keep this all together.” In addition, while we all recognize the need to innovate and fail fast, perhaps CIO have to think of new ways to position an innovative culture in their organizations. One government CIO also noted, “We need to fail fast, but you don’t really like reading in the newspapers about government failure.”
There was advice from other panelists. Ross Tucker, CIO of Texas United runs shared services and spoke of the need to leverage common platforms. His recommendation is to ask questions when business leaders request new technologies and make sure the investment makes sense, that leaders understand the total cost of ownership, and that teams look to develop solutions out of existing services.
A very important note came from John Varkey of Direct Energy. “You have to understand the difference between the lowercase digital, and the uppercase Digital.” Lowercase digital is about technologies such as websites, mobile, and ecommerce while upper case Digital is about “Accelerating business change” in areas like customer experience, operations and business model.
Thinking about it that way, more CIO have to be challenging their leadership teams on accelerating change and then developing their Digital strategy and transformation programs.
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