Video: Digital transformation explained
Digital transformation remains a difficult concept to deliver on. The core idea is to use technology not just to replicate an existing service in a digital form, but to transform that service into something significantly better.
While the idea might seem simple, there remain significant differences between the vision and the reality of rethinking business processes. Here four CIOs give their best-practice tips for delivering business benefit that sticks.
1. Digital transformation is more than just tech
"I have a real thing about the phrase 'digital transformation' -- what is it? Did we have paper transformation? Did we have bricks and mortar transformation, or metal transformation?" says Chris O'Brien, CIO at the Royal Shakespeare Company (RSC).
He does, however, see the benefits of digital-led business change that can improve operations and customer experiences.
"For me, transformation in our organisation is about key business concerns, such as how can we sell more tickets, how can we improve audience engagement, and how we can reduce costs," says O'Brien.
But he warns that CIOs must be careful to avoid the creation of a silo, where people label their work as digital and then create a separate department. "You want people across your organisation, whether that's IT, content managers, or producers, working together," he says.
"I feel that overuse of the word 'digital' can be counterproductive. Get your organisation to work together. Set up a digital transformation team, by all means, but make sure that group has clear business goals and that it comprises people from across the organisation."
2. Be a long-term change agent, not a short-term catalyst
Ian Cohen, CIO at Addison Lee Group, is another digital leader who is concerned that technology professionals are spending too much time considering the semantics of change rather than delivering services. "We're still talking about what digital transformation is -- why are people still wasting time arguing about definitions?" he says.
That is something Cohen is keen to avoid in his role at Addison Lee. Appointed as group CIO last July, he now has responsibility for all product and technology activities at the transportation company. Cohen says this focus on products means recognising everything that his business does is directly related to creating great customer experiences.
Download now: Digital transformation: An IT pro's guide (free PDF)
He says technology is simply one of the various building blocks necessary to create new and ongoing value for the organisation. While digital leaders often focus on being the catalysts for this value creation, Cohen prefers a different concept, where successful digital leaders are defined by their ability to deliver the benefits of digital transformation on an ongoing basis.
"A catalyst is useful for bringing two inert substances together and creating something different. But at the end of that process, it disappears. So, you don't really want a career as a catalyst. It could be fun for a while, but not over the long-term. It's also a strategic truth that if you want to 'be' something, work out what that is, and then go and 'do' things to get there," he says.
Cohen says problems occur when CIOs fail to establish clear objectives. He says too many people are running around trying to 'do' digital transformation, with no idea what they want to 'be' as a result. At Addison Lee, Cohen's aim is to use technology to deliver engaging services for customers -- passengers, bookers, and drivers -- and he advises other CIOs to also focus on clear outcomes for their digital transformation projects.
"In my company, we are continually building and deepening our reputation as the premium ground-transport provider. We are focused on changing ground transport into mobility-as-a-service through an obsession with passenger service, having the best drivers, and delivering great solutions that inform, engage, and delight all parties -- that's the purpose," he says.
3. Have honest conversations with your customers
Akash Khurana, CIO and CDO at McDermott International, is leading technology-based initiatives that are boosting organisational efficiency and effectiveness at the engineering company. Khurana is using data and connectivity to transform how his business builds offshore and subsea facilities for oil companies around the globe. He says several lessons around engagement emerge from this transformation journey.
"It's very important to understand the strategy of digital. You must think about how the technology can impact the bottom line of the company in a positive way and improve the experiences of customers. You must get your head around those concepts very early. And the way to do that is to get out there," says Khurana.
"CIOs might be good at talking with internal stakeholders, but they are not used to going and talking to customers. IT leaders can bring a lot of value to the business if they go outside and look for opportunities in the value chain from the customers' perspective."
Once they're aware of how digital can be used to help solve client challenges, Khurana says CIOs should focus on understanding how technologies can come together and how new services will be integrated with legacy systems. His firm, for example, is working with technology company Alfresco to deliver open and connected systems. Khurana says digital transformation must be a continuous improvement lifecycle on behalf of the customer.
See also: IT leader's guide to achieving digital transformation (Tech Pro Research)
"McDermott is positioned really well because we're designing our own products and we're making sure our expertise and knowledge is transferred to our customers," he says. "Have an honest conversation about how tangible the benefits of digital will be."
4. Rethink successful processes to create a new future
According to Phil Armstrong, global CIO at finance firm Great-West Lifeco, when his firm talks about using technology as a strategic lever, it often means reinventing processes -- including those that are working well and some which are extremely profitable.
That approach sounds radical, but CIOs aiming to deliver constant digital transformation have no room to rest on their laurels, even in areas where their business is already raking in returns, explains Armstrong. "If we do nothing, because we believe our processes are already working well, then our perceived slowness will mean we lose customers to agile, responsive and client-centric organisations," he says.
"It's not about predicting the future, it's about reinventing the processes that we have today and which may be working well, to work even better to match the changing expectations of our customers. It's a lot easier to invent the future than to try and catch up."
Armstrong notes the potential danger from born-in-the-cloud fintech companies that are coming from nowhere and "trying to eat our lunch". "These small, startup companies have agility and they're chasing scale; we have scale and we're chasing agility to future-proof our business," he says.
Read more on digital transformation
10 technologies leading digital transformation in retail
With brick-and-mortar stores closing down left and right, here are the top 10 digital tools giving brands a fighting chance.
To succeed at digital transformation, focus on customers and innovation
New study of financial services firms shows a clear difference between leaders and laggards.
Otis Elevator CIO: Modern apps and IoT for digital transformation
The chief information officer explains how technology is transforming its core business and related services. This inside look offers important lessons to anyone interested in digital. He also reveals secret truths behind the "close door" button.
Digital transformation technology and services spending is on the rise
Research firm IDC posits that enterprises will ramp up spending this year on technologies and services that enable digital transformation, including applications, connectivity services, and IT services.
4 ways finance leaders must change their thinking to embrace digital transformation (TechRepublic)
New findings from Workday reveal how financial leaders can better keep pace with digital transformation.