Cultural, leadership issues plague many digital transformation efforts
A growing number of organizations are investing in digital transformation efforts, but almost as many report a number of challenges with the effort or obstacles to success. In many cases, the problem lies with the stated objectives of the effort, or rather, lack of them.
Poorly defined strategic objectives can doom digital transformation at even the most tech-savvy organization, since it is business processes and not technology that are most involved. To aid organizations in their journey with digital transformation, Information Management asked several members of the Society for Information Management for their advice on what works best to ensure a positive outcome.
Knowing where to start
“In our experience the great challenge surrounding digital transformation is figuring out what to build,” explains Mike Davis, director at MojoTech, a software design and development agency and a member of the SIM Boston chapter.
“Organizations know their business well and often have skilled, sophisticated IT teams, Davis says. “They know what their customers want, or at least think they do, but do not have experience putting the end-user at the center of the development process. They also do not have experience building software that meets customers increasing expectations or delivering applications quickly. As a result, customer experience suffers, putting business at risk.
“The way we've seen client's address this challenge is by creating a ‘product owner’ role,” Davis explains. “Product owners understand how digital technologies can impact current business processes and models, and can act as a go-between between business oriented subject matter experts, the development/IT team, marketing and others.”
The key functions of the product owner are to “rive cross-organization collaboration, take ownership of the product roadmap, prioritize features, take a user-centric view of development, and make difficult decisions when required,” Davis says.
“Underpinning the rise of the product owner, as we call it, is the need for leadership support and a culture that supports rapid experimentation, investment in talent, distributed decision making, collaboration, agility and accountability,” Davis notes.
Don’t let the effort begin a customer problem
Digital transformation is a complex effort from the internal perspective, and to make it even more challenging, it shouldn’t appear to be that way from the customer perspective, explains James Campbell, practice lead with experience design at Shalom.
“Some of the biggest challenges with internal forces – like buy-in and commitment from all functional areas, sponsorship from executives, board and other governing bodies, and willingness to redefine KPI’s – actually pale in comparison to the effort required to prevent your digital transformation from becoming your customer’s problem, too,” Campbell says.
When organizations fail to realize that, poorly implemented digital transformation can cause lost sales, loyalty and public reputation, “and it can make or break the type of effort that will differentiate the companies of today from the companies of tomorrow,” Campbell says.
Make the case based on real results
“While many industries are considering digital transformation, CEOs in asset-intensive industries are less likely to consider IT a priority, and low levels of historic investment may have created an environment with poor digital readiness,” explains Allen E. Look, chief information officer and chief information security officer at SI Group, Inc.
“Rather than feeling left behind, CIOs in these environments need to make a faith-based presentation of digital's promise, backed by facts in the form of benchmarks showing real and related results in similar industries,” Look continues.
If the organization is not ready for a full initiative, he recommends building collaboration across a select few functions, and those early wins can increase visibility and the likelihood of a future digital transformation success.
Capable leadership is critical to success
“Most organizations refer to digital transformations as strategic initiatives,” notes Mikhail Papovsky, president and founder at Abraic, Inc., a consulting firm that helps organizations specifically with digital transformations. “As such, the challenges they experience are typical of strategy execution – lack of alignment, resistance (change management) and leadership talent.”
Last year Abraic sponsored an independent market study on digital transformations by Bennet Frank and Associates, which included input from over 50 CIOs.
“The latter is the key,” Papovsky says of the study findings. “As long as the most capable leadership talent in the organization is bought into the digital transformation, the rest of the pieces fall into place.”
Overcoming challenges with cultural and funding
One digital transformation effort where the pieces did all fall into place is that of the St. Louis County Government, which wanted to leapfrog years of deficient systems and process capabilities.
The first step was for St. Louis County Executive Steve Stenger to bring in a new CIO that had experience with digital transformation, and Rick Nolle was tapped for the job.
“The first year of ‘transformation’ was assessment and groundwork in preparation to catch up for 20 years of lost progress as our county compared with private sector leaders,” Nolle recalls. “A foundation was built on best practices in project management, service management and cloud technologies.”
The IT management team built a 5-year roadmap to “advance St. Louis County into the leader quadrant in the public sector,” Nolle says.
The first two technology projects to be delivered are a ServiceNow implementation and the building of 311—Non-urgent Citizen Services which encompasses a new mobile app, web site capabilities and state-of-the-art contact center,” Nolle explains.
As they are for many digital transformation efforts, the two biggest challenges in St. Louis county government are money and culture, Nolle explains.
“While the county had gotten used to spending less and less on IT over the years, the county executive rallied millions of dollars for new projects as we looked to double the IT spend over a 3-5 year horizon,” Nolle says. “Our culture across the county is to protect people and to shy away from accountability. That creates resistance to automation and requires careful communications and trust building to move forward without steamrolling people.”
The technology piece of the turnaround is actually the easy part, Nolle says - “figuring out where we are short of best practices and putting plans in place to get there. Reinvigorating the IT organization required infusion of private sector talent at key positions.”
Nolle says the inertia has shifted from negative to positive and continues to build. “By the end of 2022, St. Louis County will be squarely in the 21st century as we deliver services to citizens electronically, efficiently and with reducing unit costs,” he says.