Avoid these digital transformation false starts

Congratulations! You’ve just been hired as the CIO of a large global company that is in dire need of digital transformation. For your new company to thrive in the digital economy, everything must change: business model, technology, and culture. Your CEO needs you to drive this digital transformation now. There is no time to waste!

Bruce Lee, who has held CIO roles at BNP Paribas, HSBC Securities, NYSE Euronext, and Fannie Mae, applauds your bias for action, but he suggests you take a minute to think things through.

“We are so focused on the ultimate destination of digital transformation — good data and customer centricity — that we do not always focus enough on the starting point,” says Lee. “When CIOs do not truly understand their current state, they automate the wrong processes, deliver capabilities that no one wants, and lose their team along the way.”

To help CIOs avoid this disastrous end, Lee describes the early traps that often trip up a digital transformation and offers guidance for how to avoid them.

The premature pattern recognition trap

You’ve seen it all before, and you know that the problem is the networks. So, you upgrade the switches only to discover that the problem was not the networks after all.  Or you know poor governance when you see it, so you tear down and rebuild — and then realize that the problem actually isn’t governance; the problem is talent.

Fannie Mae

“CIOs want to demonstrate their problem-solving skills, so they often start talking solutions before they truly understand the problem,” says Lee. “They assume, for example, that they have the data necessary for an artificial intelligence program, so they start down the AI path. But it turns out the company data is not timely or of sufficient quality, and the path is the wrong one.”

Lee’s suggestion: “Slow down and listen carefully to your existing team, your customers, and your business partners. Recognize that you are already the CIO, and you will establish credibility faster by caring enough to understand the current state.”

The legacy labelling trap

Discussing “bi-modal IT” or “run the business vs. grow the business” may actually jeopardize your digital transformation.

“By segregating legacy technologies from next-gen solutions, you are labeling one team as the past and another as the future,” says Lee. “When you identify one set of technologies — and one team — as something to get rid of, not only do you hurt the morale of half of your team, but you fail to innovate at the very foundation of your transformation. It’s not just customer-centric mobile apps that deserve innovation.”

Lee’s suggestion: “Understand that your digital transformation is built on a set of common services and standards. If you are not innovating on these foundational levels, you are only taking your transformation half way. The legacy vs. innovation concept not only deprives legacy systems of attention, but it also insures that innovation is something different from what the rest of the company does and is handled by just a few special people. Rather than setting up an innovation center or team, CIOs need a framework that supports innovation at every level.”

The C-suite trap

You’re a CIO! Of course the entire executive team sees you as their digital transformation leader. Or do they?

“CIOs need to understand whether their colleagues want them to lead the discussion of transformational change or just to provide solutions and skills,” says Lee. “When they don’t understand their colleagues’ expectations on their leadership role, they may have trouble getting partnership and support.”

Lees’ suggestion: Be explicit with your CEO and his or her direct reports about your role.

“There needs to be a collective agreement of whether your role is to transform the very foundations of your business or deliver new capabilities that the business will choose if and how to adopt,” says Lee. “You need to understand those expectations, especially when you are new to the company.”

And of course, even if you’ve been anointed as the white knight of digital transformation, you won’t get far if your operations are not running well.

“The stakes of traditional IT disciplines: stability, security, software quality, and capacity are magnified during a digital transformation,” says Lee. “Those basics are only getting more important as your digital transformation takes technology closer to the customer and the core of what your company does.”

About Bruce Lee

Bruce Lee is currently a strategic advisor to Fannie Mae regarding operations and technology, previously he was CIO and head of operations and technology for the organization for four years. Prior to that, he held positions as Group CIO for NYSE Euronext, COO of HSBC’s Americas Investment Bank, and various CIO roles in BNP Paribas. He holds a BSc in Computer Science from the University of Hertfordshire.