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Enterprise digitization: How to scale, where to start

Christopher Paquette, a partner at McKinsey & Company, is an expert on enterprise digitization. He advises companies on the many facets of digital transformation -- including the new technology architecture, customer service improvements and cultural changes that are part and parcel of becoming a digital enterprise.

At the recent MIT Sloan CIO Symposium in Cambridge, Mass., Paquette spoke with SearchCIO senior news writer Nicole Laskowski on what enterprise digitization means and how to scale digitization across the enterprise.

In Paquette's experience, most digital transformations are a hard slog. Executive leadership is critical; in particular, the ability to rally the cross-functional teams required of digitization and to quickly find value for the company.

You have done research on scaling and accelerating enterprise digitization efforts. What does it mean to scale out digitization?

Christopher Paquette: So, I think with scaling digitization, first you have to say, what is digitization? I define it very broadly with my clients. It's not just how do you automate some processes in the back office, but it's about how do you ensure better connectivity with your customers, how do you improve collaboration internally, how do you use data to make better decisions, how do you innovate and advance the thinking within the company?

That is the foundation. So what does scaling mean? I think it's doing more, faster and, very importantly, bigger. And all of that requires a foundation. So the foundation is less about the technology, although that's important as well, but it's a foundation of the culture, the way that people are working together, the set of governance and capabilities that the employees in the organization use to work with each other. So things like Agile, but not just Agile as in, 'We've got to get in a weekly or every-other-week-rhythm,' but Agile as in, 'We really need to collaborate and come together.'

How do most companies get started with enterprise digitization?

Paquette: Most of my clients are larger financial institutions, and so this is a really hard question for them because they have decades, if not centuries, of inertia and momentum. And they have hugely complex organizations with all sorts of politics, and the underlying technology systems are full of the spaghetti that you would see at a big institution.

So, therefore, what does getting started take? A few things. It takes a clear business case. The economics have to be there. You have to have clear line of sight to the value that you're going to create for the institution, the shareholders and your customers. Two, it requires an executive who can actually bring together the cross-functional set of folks that are required to really do digitization. And so I get back to this definition of what [enterprise digitization] means. Well, it means it's not just technology, it's the business, it's operations, it's the front-line employees, it's regulatory, it's compliance, it's legal. And you need a leader who can really marshal and, frankly, inspire that set of folks to come together.

And I think the third thing you need to get started is blood, sweat and tears. Many companies, as they begin, begin with the test and learn. So they say, "We're going to try this, we're going to try this." And often what they find is that you can do it, but it takes a lot of water cooler conversations and hallway negotiations and closed-door conversations to bring together the pieces to actually move this quickly and get to the value. The organization learns a lot but, frankly, it can be really hard and painful. And executives are kind of left breathing heavy after this getting started phase.

And so what we see is the institutions then take a step back and say, 'So that was great, we did a lot. Now, if we're going to do that for the rest of your organization, what is that going to take?'

The scaling then begins to answer the questions -- not just about who are the people and the leaders and how do you really work hard, but it's how do you work smarter? What are the foundational pieces that you need to put in place to do more, better, faster in a way that's sustainable for the organization?

Go to part two of our SearchCIO video with Christopher Paquette to hear his advice on the skill sets and metrics required to ensure enterprise digitization success.

Let us know what you think of the story; email Nicole Laskowski, senior news writer, or find her on Twitter @TT_Nicole.

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