by Jeffrey Bannister

Who’s driving digital transformation? Who should be?

Jun 28, 2017
Digital TransformationIT LeadershipTechnology Industry

Businesses overwhelmingly expect their industries to be disrupted by digital trends. Innovative IT departments should take the lead in helping them make data-based decisions.

2016 digital transformation
Credit: Thinkstock

Over the past two decades, digital technology has disrupted entire industries, from music to hospitality to finance and beyond. Now companies of all sizes are undergoing their own digital transformations to align IT innovation with their own business objectives and stay ahead of this curve. But who is driving these efforts? Business or IT? And more importantly, who should be?

Business at the vanguard

At one level, the first question answers itself. If digital transformation is defined as a deliberate strategic initiative, then those driving are the ones with the authority to set the course, or at least those who have a seat at that table. Because in traditional business structures, IT was several steps removed from corporate strategy, more often than not it was business leaders who ended up leading these initiatives.

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The same answer surfaces when we look at the word “driving” from another angle: Not only setting a course, but also pushing for it. If digital transformation is about alignment, consider what happens when business and IT are at odds. In a typical scenario of limited IT resources and expanding business goals, misalignment can lead to long delivery schedules, missed opportunities and other negative consequences. While no one may like the situation, this lack of alignment is going to be more frustrating to those with ownership of business-specific goals than to IT leaders themselves, whose default mode, truth be told, always has been oriented more toward maintenance and trouble-shooting than innovation. As a result, it’s business teams that are most likely to be agitating to harness technology in pursuit of their goals.

It’s easy to picture this in practice. Imagine a legacy environment, where Dan (or Danielle) from marketing or sales or operations submits a request to IT, only to be told that it would take two or more months to process the request, never mind scheduling it. As a result, this hypothetical business leader, who is attuned to the disruptive threat and competitive advantages, may very well try to get the job done outside of IT.

The rising generation is especially inclined to take such steps. Those most familiar with digital technologies and holding the highest expectations for it grew up with high-speed internet, powerful mobile and cloud computing, and easily accessible software tools and apps. Yet with millennials having overtaken baby boomers as the largest generation in the workforce and the “consumerization” of technology affecting everyone, a digital outlook is becoming pervasive.

In any case, forward-leading business leaders of whatever age have multiple options to solve pressing problems with digital technology, with or without the IT department’s knowledge or assistance. They could deploy marketing automation tools, migrate to a cloud-based CRM or accounting system, move product development into a public cloud sandbox, open an online store, trial big-data analytics and more. If these initiatives reach critical mass, business leaders across the board may organize them into a more comprehensive exercise of digital transformation.

All along, however, the organization’s business leaders have been at the vanguard. Nor is this talk about Danielle (or Dan) instigating a digital strategy merely hypothetical. A 2016 survey by IDC of the European market, for instance, found that 72 percent of all digital transformation was business-led, vs. 28 percent being IT-led.[1] Results could vary somewhat by region or industry, but the business-led tilt is clear. Which begs the next question: who should be leading these efforts?

The rightful role of IT

It may come as no surprise that I see a disconnect between who is and who should be leading digital transformation journeys. And as a longtime technology professional, currently a leader at the U.S. division of one of the world’s largest information and communications technology (ICT) organizations, I could be accused of bias.

Consider this. There are valid reasons for IT to assume a digital transformation leadership role. Let’s examine a basic alignment problem. From the personal devices and applications of individual employees to the cloud services that entire departments may have launched, many businesses are now divided between legacy and parallel “shadow IT” infrastructures, raising questions of efficiency, security and standards.

To address these and other issues arising from business and technology divergence, corporate IT should at least engage as a co-equal with other leaders responsible for shaping a shared strategy.

As for the objection that a cumbersome and slow IT department is ill-equipped to support strategic growth strategies, that perception may be accurate, but is all the more reason for IT to undergo its own transformation. By collaborating with managed service providers and embracing validated digital initiatives already underway, IT can reduce its role in “keeping the lights on” and create more space to become an enabler of innovation. Rightly structured, a modern IT department stands not only as co-equal with other business units, but the leader in domains appropriate to it.

The question becomes: what is IT good at? The answer has shifted over time. At one point, IT was clearly expert at email server management and client software updates. With cloud-based automation handling those and other routine tasks, that is less the case today. At its root, however, digital translates into ones and zeros, or data. To the extent that digital transformation is tied to data management, IT leaders are uniquely qualified to bring their knowledge to bear on related opportunities and threats.

Which business functions are best suited for what kind of compute, storage and transport technologies? One urgent question today is how to leverage the various kinds of clouds for a wide mix of applications. Migrating an ERP system to the cloud, for instance, is an entirely different scenario from creating, beta-testing and deploying an IoT application. In the first case, any virtualized application — whether ERP or other — still entails ongoing (even traditional) tasks of installation, documentation, protection, etc. The latter app, likely being cloud-native, can leverage automation and operate within a more dynamic environment.

Providing the means to distinguish and manage those two broad classes of traditional ICT and cloud-native applications was one of the reasons NTT Communications (NTT Com) strengthened the capabilities of the its Enterprise Cloud solution a year ago. Along with a global infrastructure of connected data centers, we used SDN to connect hosted private cloud services ideal for mission-critical systems with the highly flexible and scalable public cloud services that enable rapid business expansion and nimble responses to changes in market environment.

On top of that infrastructure is NTT Com’s unified cloud management platform, which gives enterprise IT leaders tools of discovery, visibility and management applicable to any point along a digital transformation journey.

First among equals

Business—rather than IT—leaders still tend to be in the forefront of digital transformation initiatives. Reasons include the “consumerization” of technology and IT’s lingering reputation as a less-than-agile gatekeeper.

That pattern will change. Business leaders in their own right, IT leaders should at minimum be engaged in shaping corporate strategy. In technical matters, they should take a leading role. As managed service providers and other partners lighten the burden of routine tasks and maintenance, they will enjoy a greater scope for action. The right platforms and tools can provide them the data, visibility and management necessary for ensuring that digital transformation efforts are optimized, which will enable enterprises in turn to become disruptive forces themselves.

[1] IDC European DX Survey, 2016; n=308.