Crisis of Clarity: 3 Ways CIOs and LoBs See Things Differently and What to Do About It
Common assumptions and a shared reality are essential for developing and implementing any strategy. In the case of digital transformation (DX), a shared reality is often elusive. The pace of change has been so rapid that it can be nearly impossible to maintain a clear view of where your company stands in terms of technology development, and thus where it needs to go.
A survey conducted by IDC of IT influencers and decision makers in August 2017 reveals that IT professionals and line-of-business (LoB) managers in Central and Eastern Europe (CEE) often see the state of their IT development differently. And while the truth will inevitably lie between the two views (good news for IT suppliers looking to assess DX readiness), those differences will nevertheless translate into different understandings of core assumptions. Resulting missteps or extended debate will, in turn, impact the speed at which the plans and tools of digital transformation can be put into place.
While there are multiple areas in which IT and LoB decision makers have different perspectives, three stand out as worth addressing right away.
1. Faith in management to transform the organization
IT teams and LoB decision makers in the European Union part of CEE agree that their leaders understand how technology will change the future of their industry. Of 311 people surveyed across four countries (the Czech Republic, Hungary, Poland, and Romania), 71% of IT and 73% of LoB respondents agree or strongly agree that management has done its homework and at least has an idea about the future of their given industry. The high numbers also suggest senior management has been reasonably adept at communicating this understanding to others.
When it comes to vision, however, those numbers are not only much lower, but also differ considerably: 45% of IT teams believe (agree or strongly agree) that their management has a strong vision and will transform their firm into a digital leader. But just 31% of LoBs feel the same way. Similarly, IT teams are also more positive about their organization’s ability to develop data-driven products and services. While 51% of IT decision makers agree or strongly agree that there is a clear vision for launching digital products, only 44% of LoBs feel this way.
Source: IDC, 2017
What to do about it:
Those C-level leaders, VPs, and directors who have yet to construct a strategic framework for transforming their firms should do so right away. (Our survey reveals that only around one-third of organizations in EU CEE have digital transformation strategies in place, which helps explain the lower level of confidence compared to understanding the impact of DX.) In so doing, they must present a structured approach to change, then run workshops that collect and synthesize feedback from frontline staff. Plans emerging from strategy sessions must contain SMART objectives and be clearly communicated to staff in a manner that reflects their immediate, day-to-day needs as well as longer term goals.
2. An understanding of what is possible
Proximity to the technology also explains numbers that skew the other direction towards LoBs. For instance, in our survey, 21% of LoB respondents — compared to just 10% of IT respondents — strongly agree that key product and service lines are fully integrated with each other and with client data. Broadening out a bit, half of LoB respondents and just 38% of IT respondents agree or strongly agree that interactions with suppliers and partners is fully digitized.
Again, compared to non-IT staff, IT leaders generally have a better idea about what integration means. They also have a keener sense of what technology can and cannot do. According to our survey, 23% of LoB respondents strongly agree that a lack of understanding of what technology can do (and what digital transformation is) is a major obstacle to faster development. Among IT professionals, that number is just 8%. Such differences of understanding can hamper efforts to create technology maps and plan for change.
Source: IDC, 2017
What to do about it:
Run a technology assessment to determine the level of development in the organization. Use a maturity model that breaks digital transformation into component parts, such as strategy and leadership, the omni-experience ecosystem, work sourcing and skills, processes and governance, and information use. Each area should be further subdivided, with each subdivision modified for different functional areas. When communicated internally, such an audit should create alignment between IT and non-IT workers on where the organization stands, and what should come next. At the same time, whoever leads transformation efforts needs to run workshops to ensure staff understand what technology can help them achieve, and its limitations. For CEE, this is usually done by the IT team. Firms should therefore leverage their expertise internally with continuous education programs for LoB managers.
3. What drives DX
Cross-functional cooperation remains a challenge at organizations in Central and Eastern Europe and globally. Agreeing on what drives the need for transformation is crucial for establishing KPIs, which are too often directed to division or department goals, causing staff to focus on oiling their own cog in the company without consideration of the big picture.
It is true that drivers also emerge from the nature of the work itself. Shop assistants, claims adjusters, and procurement managers will all be after tools that make their jobs easier. For IT, after the proverbial “keeping the lights on,” teams may be focused on enhancing experiences more generally, which might include sub-goals such as UI improvement, the streamlining of processes, data integration, and replacing old systems. But this is why it is essential to bring IT and non-IT together to agree on common needs.
While our survey does suggest a disconnect between IT respondents and LoB respondents when it comes to understanding what drives DX, it is important to note that IT respondents assign the highest value to any given driver at a lower rate than LoB respondents. For instance, 40% of LoB respondents “strongly agree” on their top driver, while only 30% of IT respondents “strongly agree” on theirs. This makes sense. Most LoB managers and leaders are usually focused on one area: their own. And while IT decision makers and influences may also focus on one area, they generally have to also consider all the different systems, IT goals, and business goals in play at the same time.
Source: IDC, 2017
What do to about it:
It is unlikely that any two individuals within a company will have identical views on what the top drivers are, and thus what the top priorities should be. Nevertheless, organizations must ensure that the process by which they agree on key drivers is not just transparent, but inclusive. Our survey tells us that IT is heavily involved in leading digital transformation in CEE (by contrast, in Western Europe, the CEO has a far more prominent role), it is therefore incumbent on IT leaders to reach out to division heads and managers, bring developers, application leads, and administrators together with relevant non-IT staff to agree on what is needed, and then together develop the boundaries, specifics, and rankings of key priorities.
“Well begun is half done”
Creating confidence in leadership through a shared understanding of what digital transformation means, where an organization stands in terms of development (technologically, culturally, and so forth), and what drives the need for change is no mean feat. Having the right technology in place and a plan for developing it along with processes, skills, governance models, and new business models is essential. Such a plan must serve as an instrument for both communicating direction and generating buy-in from key stakeholders. Of course, it is not easy and it will not please everyone. Some staff may resign. Others may need to be replaced. But, on the whole, an internal communications plan that includes interactive development of frameworks, strategies, technology roadmaps, and drivers will help ensure a common set of assumptions and thus facilitate agreement on what must come next.
IDC’s CEE Digital Transformation Survey was conducted in August and early September in five Central and Eastern European countries: the Czech Republic, Hungary, Poland, Romania, and Russia. (Numbers in this article do not include Russia.) It benchmarks digital transformation in five key areas (leadership, omni experience, worksource, operating model, and information), and assesses drivers, inhibitors, and priorities, leadership approach, and how budgeting works in relation to digital transformation, with regional data broken down by country and key verticals.
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