by Heath Muchena

3 ways to take a business-focused view of digital transformation

Feb 10, 2020
Digital TransformationIT LeadershipIT Strategy

To successfully implement digital transformation strategies, CIOs need to align with other business leaders. African CIOs focus on 3 key strategies for doing so.

diverse group people collaborate using Post-It notes to strategize on a glass wall
Credit: Thinkstock

Creating new sources of value for an enterprise requires the alignment of business and technology objectives. According to a Gartner CIO Agenda Report, as enterprises accelerate their digital transformation efforts, the focus of  IT is on “information” rather than “technology,” and the role of the CIO is shifting from controlling costs and re-engineering processes to exploiting data and driving revenue.

In an IBM Global C-suite study in which more than 2,000 chief information officers and a total of 12,800 CxOs responded, CIOs expressed a clear change in sentiment about their roles – a shift from seeing themselves as conventional IT managers and coordinators to digital culture shapers and business growth drivers.

We asked a number of Africa-based CIOs to share some insights on their approach to finding the right balance between keeping the lights on and driving business performance. Below are the three key strategies.

Develop strategies for change and scale  

 “As CIOs we must operate effectively in complex, highly dynamic environments, driven by globalization, regulations, innovations, disruptions and cyber-attacks,” said Avsharn Bachoo, CTO of PPS Insurance.

To address an ever-changing business landscape, Bachoo said CIOs should view business and technology strategy as inseparable. “My role involves positioning the business as a technology and platform company selling insurance. This means that understanding the value of digitization by combining technological know-how of backend servers and software upgrades with a business perspective of how IT impacts the business from daily operations to strategic projects is crucial.”

IT leaders can help identify opportunities to scale in response to a changing business landscape. For example, Intergreatme – which supplies technology and applications for digital IDs and Know-Your-Customer (KYC) business issues — originally focused on an ecosystem-play, according to CIO James Lawson. Too many of their early products were tightly integrated into one another, though, which affected scalability and  incurred technical debt.

“I led the change in the necessary mindset shift needed to create more siloed products by decoupling services, user interfaces, and databases. The challenge has since become understanding the bigger picture, where each unit of processing occurs, and how a change in one system impacts the other solutions downstream,” Lawson said. “For instance, our Self-KYC solution has been siloed from our identity validation and verification solution, and incorporates our independent liveness detection module. Each product is now seen more as a building-block that can leverage other products.”

The company’s micro-service architecture is now also easily scaled out in the cloud for distributed processing, through the use of containerised services, Lawson added. “This flexible and dynamic approach has allowed us to scale-out our identity and address machine learning technologies, drastically reducing compute times from minutes to seconds, while our cloud cost has been optimised to reduce spend,” Lawson explained.

 In order to deal with a changing business environment while looking for growth opportunities, CIOs should address risk management as well as overall business impact, said Bandile Ntombela, CIO at the Department of Health Free State in South Africa.

“To transform businesses, we need to build a strong technical and dynamic workforce that is able to sustain business growth by creating the biggest impact involving the least risk and helping to translate business needs into digital opportunities that help achieve desired results,”  Ntombela said.

Communicate the value of tech investments

According to the 2019 Insight Intelligent Technology Index, 89 percent of IT decision makers surveyed feel that their digital innovation investments have improved their companies’ standing in the market or their financial performance. But a lack of resources or alignment with overarching business goals can lead to failure to implement or unlock the potential of even the most innovative transformation strategy. There are ways of ensuring optimal results for digital transformation efforts.

“An effective CIO can save a business from revenue-depleting digital transformation initiatives by analyzing business operations of the company and engaging different business divisions to understand their financial goals and then figuring out how technology can augment processes to achieve those goals faster and cost-effectively,” said Shayne Turley, CIO, Goldwagen. “When a clear upside has been established, a CIO needs to effectively communicate the impact and ROI of IT investments to business leadership in order to gain buy-in and commitment.”

Technology investments need to fit into the business growth strategy to enable higher levels of operational efficiency. However, 14 percent of technology leaders in Deloitte’s 2018 global CIO survey reported that they do not measure the impact of technology investments.

“The biggest mental block that dilutes the focus and sense of urgency to digitize is that people still separate addressing the business challenges from the digitization strategy,” said Rapelang Rabana, founder & chair at Rekindle Learning and former Chief Digital Officer at systems integrator BCX. “Until people across the organization actually see digitization as fundamental to solving their business challenges, there won’t be urgency.”

Set goals that align IT and business

In a Harvard Business Review study where companies representing 17 countries and 13 industries were surveyed, Accenture researchers revealed that companies reported poor returns on their digital investments. One of the main reasons cited was disagreement among top managers about goals. This highlights how important it is to define and articulate not only the opportunity, but also the problem that digitization solves, in order to create the cohesion required to successfully integrate technology into relevant business areas and maximize efficiencies to boost the bottom line.

  “Every aspect of our business demands greater technology capabilities, therefore collaboration with business leaders and confirming their sponsorship and involvement is one of the most critical factors affecting all our continuous digital improvement efforts,” said Helen Constantinides, group chief information officer for AVBOB Mutual Assurance Society. “Technology is part of the business strategy and an effective CIO needs to ensure that business embraces the appropriate attitude to technology. I believe that a successful CIO is a trusted CIO and to earn trust requires a lot of proactive engagement,” she added.  

According to SAS Insights, digital transformation occurs at the intersection of people, business and technology and is guided by a broader business strategy. “A focus on business outcomes is key to successfully transforming a business using technology and strengthening its competitive advantage as well as maintaining market relevance. All this requires IT and business executives to align their strategic goals,” said independent strategic advisor, Saleem Motlekar.

Nirshan Harryparshad, interim CIO of Ithala SOC Limited – a financial services firm whose goal is to meet the needs of the unbanked in the province of KwaZulu-Natal, South Africa — agrees with the view that business and technology strategies are essentially inseparable. “My product is technology services, which means I have to ensure that I am continuously looking to create value for the business through clever use of technology and constantly looking to evolve my thinking,” Harryparshad said. “In doing this, we can then take a business-focused view of technology as I’m not only ensuring that the technology ecosystem is adequate to support the necessary products, services, and processes. I believe that business agility is directly linked to an agile technology environment,” he said.