IT Plays a Critical Role in Digital Transformation

Given the strategic importance and sense of urgency organizations feel to digitally transform, some CEOs are electing to put a chief digital officer in place. In other cases, separate digital businesses are being established.  Either act leaves IT organizations unsure of where they fit in with digital transformation (DX) and what their role should be.

A recent IDC research study with 300 line of businesses executives provides IT organizations with reassurance there are roles for them to play around identifying which parts of the business could be transformed and which emerging technologies will be a best fit. Beyond working side by side with the business during the digital innovation stage, IDC also sees a role for IT after the digital capability has been created. The IT organization is needed to ensure the digital innovations are ultimately integrated into the enterprise IT platform, and to ensure existing systems are transformed to a flexible and optimized IT infrastructure that is capable of supporting a digital enterprise.

Transforming IT First

For many IT organizations, an overhaul of IT culture, talent, service management, vendor management and operations are in order before they can be an effective partner in digital transformation. According to a recent IDC benchmark study, only 17% of IT organizations are functioning as “DX Change Agents” or “DX Visionaries” when partnering with the line of business. The rest are still finding their way.

To help IT leaders map out the transformation required from within, IDC has developed an IT leadership framework for digital transformation, called “Leading in 3D”. We have named it such because digital savvy IT organizations need to tackle three dimension of IT transformation simultaneously.

Dimension 1: Innovate with the business to create a digital enterprise. This dimension addresses the need for IT to serve as an innovation engine. Digital savvy IT organizations works closely with the business in an agile manner to create new digital capabilities.  Such organizations require an innovation culture, a deep understanding of business and consumers, and IT talent versed in digital technologies.

Dimension 2: Integrate digital capabilities with the enterprise platform. Once the digital innovations have been generated, it is incumbent upon the IT organization to ensure a reliable, scalable and secure digital infrastructure is in place. When and how the digital assets are integrated into the enterprise platform is up to the IT organization. A focus on enterprise architecture, service management, security, and program management come in to play heavily in this dimension.

Dimension 3: Incorporate new techniques and technologies into the IT organization. For many IT organizations, legacy systems are seen as a barrier to innovation. Digital savvy organizations create a flexible and optimized IT infrastructure that is capable of supporting the digital enterprise by selectively infusing the environment with digital techniques and technologies.  Through a careful balancing act, they adeptly parse their resources to drive innovation while still running the current IT environment.

A Virtuous Cycle of Innovation

Leading in 3D is the process of managing continuous transition from old to new and from experimental to operational in the context of Digital Transformation. It requires IT leaders to simultaneously transform a multitude of domains ranging from IT talent to services management to IT operations.

IT organizations begin their transformational journey by assessing where they currently stand in each of the three dimensions i.e. innovate, integrate and incorporate. For each dimension, they must create a roadmap for transforming. Table 1 lists the priorities we believe should top most Leading in 3D roadmaps.

While there is a large amount of change that must take place in a short period of time, those IT organizations that can master this will find themselves in a virtual cycle of innovation. Such IT organizations will be able to drive the initiatives that shape future business models and create best-in-industry digital products and services.