Special Feature
Part of a ZDNet Special Feature: Digital Transformation: A CXO's Guide

Want to create digital transformation? Make a solid plan first

Recent surveys show that many digital transformation efforts are fragmented, with no clear owner. Here's why it's important to have a good roadmap before beginning.

Digital transformation: Where is the shift in IT taking us?

The advantage of working in IT is that you are usually well ahead of digital and computing technology information and adoption curves. The downside of this is that you often understand the value propositions of a new technology before your colleagues do.

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The quandary for the CIO, then, is how to get buy-in from the CEO and other key stakeholders in the organization for technologies that you regard as essential to the business.

To consider this question at closer range, let's look at digital transformation.

In late 2018, TechRepublic Premium conducted a survey of CIOs, and more than half responded that their companies didn't have a formal digital transformation strategy.

Now they do -- forced on them by the COVID-19. The global pandemic has compelled many companies to close their doors and shift to a remote workforce, where employees rely on digital technologies such as video conferencing and online digital collaboration.

Since the COVID-19 crisis, the central challenge that CIOs and digital transformation leaders faced has also changed. In 2018, the main challenge was management buy-in, but the new challenge is limited budgets.

SEE: Research: Digital transformation plans shift due to COVID-19 (TechRepublic Premium)

COVID-19 required many organizations to dig deep into their pockets to fund video technologies which could support a remote workforce during the pandemic. Because of this unplanned digital spending, coupled with reduced revenues brought on from more consumers staying at home and spending less, these organizations are now sounding a warning bell that funding for digital transformation or any other major IT project will likely be deferred as budget tightening becomes the reality.

The impact on IT budgets, based upon recent research by TechRepublic Premium, shows that IT budgets going into 2021 haven't changed much from past years. They are staying within the typical range of a 5% increase of the prior year's budget. However, the real question for 2021 is how aggressively these budgets will be spent.

The most likely scenario is that spending will be constrained during the first two quarters of 2021, while companies watch the economy. If all goes well, budgets could open up in the third quarter.

Meanwhile, there are ways in which COVID-19 has changed -- and not changed -- digital transformation initiatives.

One significant change to digital transformation initiatives brought on by the pandemic, is aggressive investment into digital communications, technologies, and data sharing that support remote workforces.

At the same time, companies haven't wavered on their long-standing number one digital transformation objective: Eliminating paper. In late 2018, a TechRepublic Premium survey revealed that 68% of respondents were focused on paper elimination. That percentage dropped to 58% in 2020 going into 2021, and is likely diminished because of the new round of investments into digital technology for a remote workforces.

Given these factors, If you are a CIO working on updating your digital transformation plan for 2021, you may want to consider the following four actions. 

1. Focus on digital centralization

Two years ago, companies were in the early stages of digital transformation. Digital projects may have popped up in individual departments in a piecemeal fashion, with little thought for how these projects would integrate with other corporate systems.

The COVID-19 pandemic changed this.

This change of thought began with the immediate and unplanned need to implement digital technologies for a workforce that suddenly needed to work remotely.

Emergency funding was required to meet the need. This forced C-level executives to get directly involved, who in a non-emergency time would not.

One thing workers learned -- including non-IT executives and the CEO -- was that if employees were to work effectively from home, they needed access to a broad array of corporate data and systems. In short, the user department 'digital silo' approach of piecemeal digital systems wasn't working.

This organization-wide awareness of the importance of holistic systems and data has breathed new life into CIO pitches for digital infrastructure and integration investments, which formerly were viewed as invisible and intangible projects that did not deliver anything impactful to the bottom line.

It is now much easier than it was a few years ago for a CIO to present a digital transformation strategy with a secured and centralized data repository, which facilitates safe corporate-wide data sharing and leverages every digital asset under management.

2. Digital security and governance

In April 2020, the International Association of IT Managers (IATAM) sounded the alarm that at-home work would lead to a spike in data breaches

"The work-from-home environment has created a multitude of opportunities for leaks," said IATAM President Dr. Barbara Rembiesa. "Too many organizations have left themselves wide open for attack. Understanding the pathways for access within a company's data network is a valuable lens for businesses and agencies to avert leaking their own assets." 

Among the many data entry points for security breaches were devices at home that employees used that were not as secure as those they used at work; devices that employees left unattended in their homes that others could use; additions of new hardware and software that weren't vetted for security, and so on.

Collectively, this activity generated considerable anxiety over the security and governance of digital assets.

The same concern is reflected in TechRepublic Premium's 2020 survey, in which 43% of respondents said that defining security and governance requirements for digital technologies was challenging, 39% were struggling with developing security and governance policies and procedures for their digital assets; and 37% were concerned about the overall security of their digital assets.

These circumstances will continue to make digital security and governance priorities in CIO's digital transformation strategic plans.

SEE: Digital transformation research report 2018: Strategy, returns on investment, and challenges (TechRepublic Premium)

3. Continued investment in online training

In 2020, 56% of TechRepublic Premium survey respondents reported that their companies would continue to invest in online training for employees. This compared with 53% of respondents in 2018, so online training investment levels have remained steady.

Online training investments have used digital IT in two ways: As the facilitator of many different types of virtual training programs that employees can take whenever and wherever they are; and as an educational mechanism for employees who need to get up to speed on digital technologies.

Online training is an important digital strategy that should be in every CIO's digital transformation plan for 2021.

4. Less emphasis on business automation

Between 2018 and 2020, interest declined in IT and business automation as digital technologies.

Undoubtedly, the need to focus on more remote digital technology like video conferencing during the COVID-19 pandemic contributed to this lag. It also became much more difficult for employees to get together to plan and execute IT business process revisions -- an exercise that doesn't usually work well when done remotely.

This doesn't mean that IT and business process automation is going away -- but it is likely to be less emphasized in IT planning in 2021.