For many organizations, the digital transformation journey has passed from jargon and hype to planning and execution. The journey that fraught with challenge because it often involves change around technology, people, and business model.
The impact of digital transformation on the CIO and IT is considerable. Aside from the obvious technology impacts - data and analytics must become a way of life - a not-so-subtle mindset shift is required. The historical role of CIO as supplier of technology must give way to a new set of skills that involve business models and deep understanding of competitive forces and changing consumer expectations.
To gain a better picture of digital transformation, I spoke with one of the top researchers on this subject. Dr. Didier Bonnet is the Global Practice Leader at consulting firm Capgemini and is executive sponsor for the firm's digital transformation practice. He is also co-author of the book Leading Digital and leads Capgemini's joint research program with MIT.
Our conversation was wide-ranging and explored Bonnet's research and his accumulated lessons on how to scale a program of digital transformation.
The conversation was part of CXOTALK series of discussions with innovators. Watch the video above and read the complete transcript.
Here is an edited summary of key points in the conversation.
What is digital transformation?
We're in a world where the word "disruption" is bantered around all over the place ─ everybody's getting "disrupted" and it's all about disruption.
Not everybody's trying to do floor-to-ceiling-type of transformation. You can start with customer experience. You can start with operations. But fundamentally, these technologies are going to touch every single point of the organization. Hence the need for a good strategy and a good vision, because you could spend a ton of money to try and change everything in your organization.
But, you can't truly change every part of your organization with technology. So, one of the exercises is figuring out how to focus my investments on making sure that there is a payoff.
People tend to think we have to change everything. No! Within a big digital transformation, you have different types of programs, each with a different risk profile and a different investment profile, and a different timeline. It's good to manage it as a portfolio so you can add your bets, and your risk, and your investments.
What is the role of IT and CIO in digital transformation?
We're seeing a fusion between IT and the business side, where IT people should be much more educated around the business challenges and strategies that the company is trying - to become businesspeople.
And equally, the businesspeople ─ the business side ─ must become much more attuned to what technology can do for them. It doesn't mean that each will replace each other. But there needs to be a lot more communication, a lot more cross-functional collaboration between these two teams.
Even the language for communication is important. In the best companies, the businesspeople are totally okay having a technology conversation, and the IT guys are totally okay having a conversation about channel strategy. And that's where you want to end up.
If you want to succeed in digital technology today, or in digital transformation, these two worlds have absolutely got to fuse.
It's not about alignment; it's really about fusion. And the way to deliver these projects has got to be with cross-functional, multi-skilled team that includes IT, creatives, marketing people, supply chain people, and so on.
We're breaking down some of the natural barriers we've built in the organization over the years. In a very large organization, this is hard to do.
What are the challenges of scaling digital transformation?
I've always had an eye on the human aspects of change. Because I've studied organizations for a long time, I know that an organization is just a collection of people. If you don't get the people aligned and engaged, then nothing will happen.
I have spent quite a bit of time trying to understand how companies can "mass-skill." We're talking about scale ─ sometimes hundreds of thousands of people. How do we mass-skill the population [in the best way]?
[Without that], you will end up with a two-speed community. It's not two-speed IT anymore; it's a two-speed community of people who get it and people who don't.
It's about hiring and training. But, it's also about incubating. It's about conquering. It's about reverse mentoring. Whatever tools you can use, there's a whole panoply of them that you need [such as] building your own transformation university, which many companies are doing right now.
When we asked corporations, "What is the biggest obstacle to accelerating your digital transformation?" In 77% of the cases, the answer was "capabilities and skills ─ people".
We've got to tackle that problem because it's not going to go away. And we don't have the luxury of waiting until all the people who are not skilled retire so we can hire new ones.
The problem with innovation is not ideas. Everybody's focusing on ideas, but that's a piece of the problem. You can get ideas from everywhere.
The problem is how do I get my idea to a business application through my organization. Through prototyping; through testing; through experimentation; and then to scale?
I still see clients where the proof of concept is running for two or three years because they can't scale it. There is no process within the organization to scale it, no capability to do so.
Please see the list of upcoming CXOTALK episodes. Thank you to my colleague, Lisbeth Shaw, for assistance with this post.