In my previous post, I discussed solving the IT obstacle to digital transformation and business agility. Today I’d like to take that further and talk about a process for driving transformation and business outcomes to use to evaluate its success.
At their core, digital business transformations are about changing the business, not about the technology. This begins with the business decision to choose a new direction (McKinsey) for the business. It is important that any new business direction be clear and have measurable business outcomes.
I believe that business transformation requires the digital transformation of IT. A transformation of IT, just like a business transformation, begins by stating the measurable business outcomes expected from a new direction for IT. I believe there are three essential outcomes needed from transforming IT:
- Applications that support the exact way the business wants to work – Digital business transformations require supporting modified or new business processes to support a market niche, customer service, and other organizational opportunities. This is a change to the conventional wisdom of the past few decades, which has been to adapt business processes to the way an application works. Measure: yes or no.
- Easy to implement applications with low TCO and fast ROI – Agile business operations require applications that are easy to implement and change. This is reflected in two key measures for business applications: their total cost of ownership and speed to realizing operational business benefits. Measures: (1) TCO and (2) time to using the new application to realize its business benefits.
- Applications with less IT complexity and simpler IT operations – The problem of IT complexity arose from the layer upon layer of technologies most companies have accumulated over the years. These layers have created redundancies, inconsistencies, and layers of operational integration that add more complexity. And, as CIO magazine states, “Complexity is the sand that grinds all innovation to a halt.” Measures: (1) How well these applications enforce consistency of data and rules; (2) how easily applications can be maintained and enhanced; and (3) how easily applications can incorporate and use new technologies.
These three outcomes require a new way of supporting the business and its unique operational requirements. To see why this is so, consider two observations about the process and technology components of the People-Process-Technology principle as you think about the implications of setting a new direction for your business organization.
The first observation is that a new business direction requires modified or new business processes. Continuing to work in the same way as before the change is unlikely to create the desired business outcomes.
The second observation is that changing a business process is constrained by the business applications used in the business process. These applications take time and resources to change, making changes to business processes expensive and slow. This is why Forbes says the biggest obstacle to transformation is legacy IT.
My next blog will address how to digitally transform IT so it can no longer be an obstacle to business transformation efforts.
Future blogs will dive more deeply into IT, digital transformation, Instant IT, and more. Let us know if you would like to receive email notifications of future blog entries and more from InfoNovus.