Implementing digital transformation requires C-level ownership

11 September 2017 Consultancy.uk

While digital transformations are often seen as a task for the IT department, the importance of top executive involvement in these transformations, by actively engaging and owning their responsibility, should not be overlooked. Only then can digital transformations yield lasting successes, says Ben Gorter, Partner and Head of the Business Technology Management practice at Qhuba.

Recent research of CEOs by Gartner shows that after growth, IT improvements and technology is the second priority of executives at major companies. In practice, however, a large number of digital transformations being implemented do not yield the desired results. One of the reasons for this, according to Ben Gorter, Partner and Head of Business Technology Management practice at Qhuba, is that responsibility for IT improvements is often laid deep in the organisation.

“Digitalisation has never been so high on the priority list," according to Gorter. Against the backdrop of developments in the market, he and his team say that organisations are still improving when it comes to the way in which IT change is managed. "We come across many different organisations in various sectors and see a wide variety of ways to manage digitisation. What is noteworthy is that in most organisations, the C-level is not made responsible, it is only distantly involved in projects, and it is hardly involved at all in wider governance."

Governance of digital transformation needs C-level ownership

"CEOs tend to say that digitalisation is important, but in practice, responsibility lies elsewhere in the organisation. Most often, they allow information managers of an entity or department to take their seat on the steering committee," he continues, before stating that while many IT managers today carry the title CIO or CDO (Chief Digital Officer), but many also remain disconnected from strategic role like that, still reporting to the CFO. "In short, the gap between strategy and execution within the organisation, or the support needed by the top management to complete complex change paths, is too big."

Process development for digital transformations

Gorter further explains, "When Qhuba is asked to deliver a transition programme, we first look at how IT is managed within the organisation. The manner in which this is organised says much about the importance or value that the organisation attaches to IT improvements. Then we look at the topics handled by the IT steering committee. In instances, where governance is subpar, it often appears that the steering group has limited engagement in IT strategy, let alone business strategy, and especially towards meeting operational issues. In such cases, it is likely that the projects will not be in line with the chosen strategy. "

C-level, he contends, should therefore always be involved in digital transformation and, more importantly, should act as its drivers. "A simple guide to setting up the control of digitisation from the C-level is in line with the way in which processes in the organisation are organised." This includes the primary process in which the products or services are manufactured, the delivery process, which turns about communication, the final transaction with the customer, and the supporting processes needed to perform the primary process and delivery processes.

Quote Ben Gorter - Qhuba

The control of digitisation can also be divided into these three domains. For each domain, a management group can be set up which is responsible for the direction of digitisation (or IT). In the example, the control groups fall under the responsibility of the COO (primary process), CMO, CCO or sales director (delivery process) and CxO (this role depends on the relevant support processes). Gorter: "In this way, the C-level is made responsible for part of the organisation's digitisation."

In this model, the C-level responsible domain managers are not alone, they are supported by a number of specialists, usually including a domain architect who has knowledge of all processes, data processed within the domain, the applications used to support these processes and the collection of domain relevant data. Additionally, there exists a domain director, who is responsible for the change portfolio within the domain. This is also the manager who controls all product owners in the agile teams.

Gorter considers another possible division model for CxOs, which takes digitalisation as its base aim. For example, the use of digital technology can focus on further automation, process improvement, cost reduction (compared to the typical COO interest); Empowerment, making better decisions based on better information (compared to the typical strategic (CEO) or commercial interest (CCO); or, for example, transformation of the business model or the way in which customers are treated (compared to the typical domain of the CEO / CMO).

Setting up digitalisation governance

The overall governance of digital transformation can be invested in a digitisation & data steering group, meanwhile. This includes the domain managers (COO, CMO, CxO) as well as a number of specialists who assist them in various IT areas. These include the IT controller, who is aware of all budgets and investments; the enterprise architect, who ensures the maintenance of all architectural principles; the security officer, who monitors that all data is processed in a safe manner and that any security incidents are solved and prevented; and the compliance officer, who monitors that the organisation complies with laws and regulations and provides for (mandatory) audits and inspections.

Gorter concludes, "Digitisation is too strategic to leave to the IT department. C-level stakeholders will have to take control of their own digital transformation."

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