IT and business strategies are now one and the same; digitization requires enterprise-wide change; IT needs a faster...
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and more flexible operating model; and talent is the key to digital success. These are the themes that several hundred CIOs and their leadership teams discussed at CEB's Summit for IT Leaders in Chicago held in October. Recognizing that organizations need to digitize to remain competitive, attendees at the CEB Summit joined to discuss how large companies are approaching digitization. The event also provided plenty of examples of how digitization is creating a unique opportunity for IT leaders to serve as agents of change, helping to set the strategy for digital success and promote transformation across the company.
Presentations and discussions focused on four main ideas during the event, each of which helped to explain that as enterprise-wide digitization creates new opportunities for business growth, efficiency and competitive advantage, it also produces new career prospects for IT leaders.
1. Developing a digital business model
IT strategy = business strategy: Many companies are pursuing ambitious strategies for using technology to transform their products, channels and operations. IT leaders described how they are becoming ever more involved in these initiatives and how distinctions between IT and business strategies have disappeared.
Define digitization, develop framework to monitor progress: The first steps in developing a digital strategy include defining digitization consistently to ensure all leaders are on the same page, and developing a reusable framework to assess the impact of digitization on the business. Often, business leaders get sidetracked in developing these definitions and frameworks, as they try to find uses for emerging technology or forecast when technologies will mature. But the definition and framework should center on the business outcomes the company hopes to achieve, not on the technology.
Jettison annual strategy-setting plan for responsive strategy processes: CIOs also discussed the pace of change in digitization and that traditional strategy setting processes need to flex and accelerate to match. One progressive IT leader explained how her organization recognized that the annual strategy-setting calendar was too slow and how the team has adopted repeatable processes for facilitating digital strategy decisions as opportunities arise. These processes are made even more responsive if they are linked to a mechanism for regularly tracking and responding to changes in strategic assumption.
2. CIO role in digital change
Digital change is enterprise change: In the same way that business and IT strategies are merging, transformation efforts related to digitization must go well beyond the IT team. For example, digital products will struggle in the market unless sales and marketing incentives are aligned, and investments in big data will yield few results if users lack sufficient analytical skills and judgment. CEB data suggests companies that address issues like these as part of a broader change agenda for digitization are 15 times more likely to be successful in their efforts than companies that focus narrowly on delivering technology effectively.
CIOs become digital change champions: While IT leaders cannot -- and should not -- take ownership of the entire digitization agenda, they can play an important role in highlighting the need for change. In their dialogue, IT leaders prioritized aligning incentive and funding models and accelerating corporate clock speed as areas that most needed their attention for achieving digital success.
3. IT needs a new operating model
Plan-build-run model is no longer viable: Leaders attending the CEB Summit also considered changes to IT's operating model for the digital era. Digitization leaders believe that the default operating model of plan-build-run is too linear, slow and inflexible. Instead, many CIOs have established new models designed for iterative development, continuous delivery, minimum viable products and rapid changes in priorities.
Product-line management defined by business outcome, not technology: A key difference between these new models and the current plan-build-run approach is a move to product-line management. The product lines (which some attendees refer to as services, experiences or value streams) are aligned by business capability or outcome, not technology.
IT funding is allocated to each product line: The way IT budgets are allocated is also different. Instead of funding projects, companies allocate money to each product line depending on its strategic importance and give product managers flexibility to use the money to fund enhancements to their product lines through the year. In doing so, each product line can move at its own pace. Top-priority product lines can use Agile and DevOps techniques to introduce innovations rapidly while commodity product lines can be managed rigorously for efficiency and stability.
4. You can't digitize without digital talent
How to hire for digital transformation: Even the best digital strategies will come to nothing unless a company has the right talent to implement them. At the Summit, actions that IT leaders should take were reviewed to ensure that teams are ready for digital transformation, including:
- Hiring staff with versatile skills rather than narrow expertise in one area;
- Filling competency gaps in areas such as influencing, relationship management, learning agility and creativity;
- Standing up cross-functional "fusion teams" (i.e., a digital marketing team that includes IT staff and marketers);
- Making IT's culture more collaborative and open to new ways of working;
- Creating diversity initiatives to tap larger talent pools and finding IT employees with different perspectives and new customer insight -- both of which are vital for successful digital initiatives; and
- Developing strategic workforce plans to ensure that these actions all happen and are well coordinated.
These four areas impact organizations and IT teams, but they also open up many new opportunities. As digitization continues, CIOs and other IT leaders will have the chance to contribute to business strategy and enterprise-wide change on equal terms with leaders elsewhere in the business; to take on new responsibilities within IT; and to expand their managerial and leadership credentials.
CEB's Summit for IT Leaders ended on a high note as attendees realized that by seizing these opportunities and acting as agents of change in the enterprise quest for digital success, they can not only help their companies create competitive advantage, but accelerate their own careers as well.
About the author
Andrew Horne is an IT practice leader at CEB, a best practice insight and technology company. His column is part of a monthly series on SearchCIO, Digital Insights.
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