Time Is Now For A Digital Capability Maturity Model

Digital disruption is testing the glory days of the IT Organization – more than ever, the CIOs need to double as a business leader. So, are CIOs ready to embrace Digital and take their enterprises to next orbit of growth?

 

The transformation is evident from the early 2000 and today CIOs are no longer relegated to the sidelines—rather they have taken the centerstage….but for how long? If the CIO is not progressive enough to induct newer tech and align IT for business to accrue more value, then, the very purpose of IT enabling better  business outcomes stands defeated. In a book in early 2010, titled the  ” The Real Value of IT” by RIchard Hunter and George Westerman, they aptly said,  “The cost of IT is not the value of IT. It’s time to start communicating in clear, measurable terms non-technical managers can understand how IT improves business performance. Nearly half of all capital spending by businesses worldwide goes to IT, yet many business leaders remain skeptical about whether their IT investments are paying off. Frustrated—even angry—with their IT departments, the only input they seek from their CIO is why IT costs so much.”

The panacea the authors advocated  :”  The escape from IT’s value quandary begins with something as simple and profound as a change of paradigm for the IT organization. We can sum up this paradigm change as rule number 1: it’s not about IT. It’s all about business outcomes and business performance, whether you’re communicating IT’s internal performance or IT’s impact on business operations and financials.”

CAUGHT BETWEEN THE DEVIL AND DEEP BLUE SEA

Across the world, the CIOs are caught in a dilemma. One they still have legacy and siloes and assets on a corporate data center. But they are told to give the much needed tech leverage for the business to expand its footprints in the digital economy. What experts call as a digital-led business transformation is not an easy task. And now, this digital disruption is testing the glory days of the IT Organization and how truly the CIO is also doubling up as a business leader. So, are CIOs ready to embrace Digital and take their enterprises to next orbit of growth? Clearly enterprise IT organisations need a ‘Digital Capability Maturity Model (DCMM)

A study by Commvault, the global leader in enterprise backup, recovery, archive and the cloud, and Quadrant Strategies, late last year said that an alarming gap between the expectations of management and the readiness of IT organizations. The study, “Measuring IT’s Readiness for Digital Business,” a survey of 1,200 IT executives and IT personnel in six global business markets revealed that while many executives recognize the need to be able to lead their companies through digital transformation, IT personnel actually feel they lack the skillset, technology, and bandwidth to create the data-centric foundation required for that digital change and future innovation.

This is indeed a hard-hitting fact, comes at a time when CEOs and executive boards are calling for a rapid transformation to digital business models. The study further pointed out that Digital transformation is no longer a choice. Organizations must transform or die.

For example, studies have shown that companies utilizing data-driven insights to make strategic decisions have improved their productivity by up to 33 percent. Meanwhile, progressive companies that have transformed their business models are future-proofing their organizations and reshaping their industries. The common theme among these companies is progressive CEOs and CIOs who recognized that a digital transformation vision was not enough. Instead, they enabled their IT organizations – through new skillsets and tools – to create a data-centric foundation that supported more cost-effective current operations while providing deeper business insights and the agility to support radical new ideas and new applications for doing business with customers.

WHERE ARE WE NOW?

More recently, Korn Ferry (a global organisational consulting firm that help companies design their organisation—the structure, the roles, and responsibilities, as well as how they compensate, develop and motivate their people) announced its findings from an in-depth research, which finds that leaders across India need to embrace a radical mindset shift to enable real and sustainable digital change within their organisations. The study also highlighted that leaders across APAC are not yet digital-ready and risk derailing digital sustainability initiatives by perpetuating legacy ways of working.

The report, titled “Digital Leadership in the Asia Pacific”, analyzed the leadership profiles of more than 9,000 leaders from eight APAC countries and territories including the 2600 Indian leaders, and compared these profiles against the traits, competencies, and drivers of great digital leaders. The countries and territories involved in the study include Australia, China, Hong Kong, India, Japan, Malaysia, Singapore, and South Korea.

Across the region, a few bright stars are Australia and India, fare relatively well against the profile of a great digital leader. However, much of APAC is struggling with the scale of change required and looking for a way through the complexity.

DIGITAL LEADERSHIP IN INDIA: EMBRACING AMBIGUITY AND ENABLING CREATIVITY

According to Korn Ferry, India is one of the great global growth markets and the government’s investment in the Digital India initiative is unleashing the power of digital connection. Indian business leaders see the market opportunities, yet many continue to struggle with what “digital” looks like for their organizations, particularly as they continue to enjoy strong performance today.

Korn Ferry’s analysis compares a sample of over 2,600 Indian leaders to the digital leadership profile. The findings suggest that Indian leaders need to embrace a radical mindset shift to enable real and sustainable digital change within their organizations. Great digital leaders don’t only deliver results right now; they also create the conditions for future success. Market demand in India will only increase, so the race is on to capture the competitive advantage on offer.

While Indian leaders are strongly motivated by challenge and have proven capacity to engage and inspire their people and deliver results, their preference for structure currently hinders their ability to engage and inspire their people in uncertain conditions and cultivate innovative thinking. It also promotes the “safe” approach, rather than giving free rein to more entrepreneurial thinking and iterative decision-making and stifles curiosity, confidence, and risk-taking.

Going Digital hence is a judicious blend of policy and technology execution. And digital readiness is indeed a painstaking exercise. With the multi-pronged ramifications, it is vital for IT organizations to fast track their digital transformation initiatives to stay relevant in the marketplace. So enterprises need a combination of best practices and indulge in enterprise re-calibration initiatives. Here we suggest 5 best practices that improve your digital maturity.

FIVE BEST PRACTICES TO JUMPSTART DIGITAL TRANSFORMATION 

#1: Map your digital priorities: It’s a given fact that enterprise IT organization suffers from technology plurality and information overload, legacy, and silos. The starting premise hence for a CIO or a CXO on the road to digital transformation is to indulge in a due diligence on the current state of technologies that run the enterprise. Once when the technology inventory is done, and experts suggest that a relevance analysis of the current business demands need to be done.

In this process, the enterprises will clearly ascertain how relevant is their existing IT- hardware, software, and apps, and update to newer ones meeting the business demands of the current new normal digital economy. Based on the tech assessment a digitalled business transformation plan needs to be inked. That plan must in its ambit have all the relevant ingredients of transition.

#2: The CEO-CIO Collaboration: According to a Gartner survey last year, it said that product improvements and technology are the biggest-rising priorities for CEOs in 2017. IT-related priorities, have never been this high in the history of the CEO survey,” stated Gartner.

Almost twice as many CEOs are intent on building up in-house technology and digital capabilities as those plan on outsourcing it. Gartner refers to this trend as the ‘reinternalization’ of IT — bringing information technology capability back toward the core of the enterprise because of its renewed importance to competitive advantage. This is the building up of new era technology skills and capabilities.

Deeper transformation can only be achieved at scale if it is systematically driven. Experts say that CIOs should help CEOs set the success criteria for digital business. It starts by remembering that you cannot scale what you do not quantify, and you cannot quantify what you do not define. You should also ask yourself: What is ‘digital’ for us? What kind of growth do we seek? What’s the No. 1 metric and which KPIs must change.

Experts like Gartner say that many CEOs have recognized that being open-minded, entrepreneurial, adaptable and collaborative are the most-needed digital leadership mindsets. “It is time for CEOs to scale up their digital business ambition and let CIOs help them set and track incisive success metrics and KPIs, to better direct business transformation. CIOs should also help them toward more-abstract thinking about the nature of digital business change and how to lead it.

#3: Create a tech Eco-System: At the end of the day, digital transformation is all about how IT can enable business for more profitability. In more ways, you can call it as an IT-led, digital-driven business transformation. Clearly, the starting premise lies in the creation of technology ecosystem and a seamless blend of hardware and software. So it starts with managing your PC fleet, server sprawl and the kind of apps and software one is running. So the IT infrastructure has to be in sync with times and agile enough to take in all the elements of transformation and be able to evolve as the organization grows and need to be relevant and updated all the times.

#4: Reimagine and Reinvent: Again, this might sound cliché, but there is no escaping it. This is more of a mindset problem. When things are going fine, the most organization goes into the ‘Niagara Falls’ syndrome and they fall into the trap of ‘If things are going fine, why change it.’ But today IT has reached an inflection point and the writing is clear on the wall- ‘Go Digital or Perish’. It is in this backdrop, experts suggest that organizations must put in place a staged digital transformation plan, that is realistic and achievable. The key takeaway here is that transformation will not be overnight, rather phased and consistent. So from legacy- in terms of thinking and technology, the organization must pass through various stages of digital transformation and achieve a level of technology and process maturity that can drive digital initiatives.

#5: Digital transformation is a journey and not an end: Clearly, this is an ongoing exercise. One of the biggest challenges is to create a tech adoption model that is agile enough to explore and experiment. So once when you have aligned your IT towards digital demands, the emphasis should be on metrics. As a technology decision maker and the one driving the digital transformation, irrespective you are a CIO or CTO or a CXO, you need to provide tangible RoI benchmarks. By providing benchmarks, one is also creating an on outcome driven digital transformation model.

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