Establishing a digital transformation strategy can be a daunting prospect for IT leaders and CIOs, but many organizations already have the technology – if not the culture – to get started tomorrow, analysts at the third annual Gartner CIO & IT Summit this week said.
The first step in creating a digital transformation strategy for CIOs and IT leaders is to help their organization understand where they are in terms of the journey – even if it is at the beginning, Kristin R. Moyer, VP distinguished analyst at Gartner told an audience of CIOs and IT leaders from the private and public sector in Toronto on Wednesday.
“There’s a gap between where most organizations are today, compared to where they want to be,” she said. It is a significant disconnect, Gartner research indicates, where 66 percent of leaders think they are transforming, but only 11 percent are.
“The most important thing you can do for the next 12 months is to help your organization make faster progress,” she said. In moving towards high-velocity digital transformation, rather than exploring operational changes which can be done in the existing business model, organizations should explore new business models, which means finding new ways to make money.
Every business wants to make more money, of course, but the reality is not all leaders are ready to make the cultural changes that empower teams to take risks.
“The biggest barrier you’ll face is passive resistance – people want to change, but when it comes to it, it’s hard,” Moyer said.
In some cases, it may be easier to start innovation projects separately from the so-called “mothership” of the organization.
“Figure out what is the right distance from the mothership,” Moyer said. “Most organizations can be good at putting the word ‘no’ in innovation.”
You want to be thinking about if it is something that could exist in an existing business unit, or if it needs to be close, but not too close, she said.
Trying new things away from the mothership can help drive new business models, Salim Ismail, founding executive director at Singularity University said in a keynote. Google and Apple are both examples of companies who have done this successfully. Google with Google X and Apple with its special projects teams.
“Apple’s core innovation is actually organizational,” Ismail said. “They’ll form a small team that is really disruptive, keep them really stealth and secret.”
Chief of research for Gartner's CIO Research group, Chris Howard, said in a keynote that 70 percent of organizations have a dedicated team whose mandate it is to move digital business forward. Of those dedicated digital business teams, 42 percent report to the CIO, while 16 percent report to the CEO.
Howard said that much digital transformation strategy today is happening within existing business models, but the problem with this approach is that people are not motivated to innovate – especially if the culture is risk-averse, as is the case with many organizations, especially in Canada, he said.
In a survey of global CIOs, Canada stands out as a country whose overall IT spending is slowing despite growth being a top business priority around one-quarter of CIOs. Twenty-two percent of CIOs say digital business is a top priority. But what is missing from the list of top 10 business priorities is perhaps more telling: profitability and M&A.
“Canadian CIOs need to get out of the business as usual, and become intentionally more strategic,” he said.
Being more strategic with technology investments can help prepare organizations for change and create new sources of revenue, adding business value. Top performing organizations are investing in artificial intelligence, BI and analytics, and getting out of the data center, Howard said.
“Don’t be so risk-averse, take small bets, and scale the ones that work,” he said.