How can organizations ensure they successfully handle digital transformation? Certainly not by wildly investing in every new technology that comes along. Blundering into hype cycles and blindly following the advice of so-called gurus is definitely not the best strategy. And yet it is what many companies end up doing in the absence of a clear digital transformation policy.
Four key questions
Here are four key questions that companies who want to handle their digital transformation responsibly should be asking themselves.
- Are we doing the right thing?
- Are we able to identify the relevant technologies in time and translate them into digital innovations?
- How do we reliably measure which innovations best fit our strategy?
- Are we doing it the right way?
- Are our digital projects aligned with our current and future architecture and security requirements?
- How can we integrate innovations into our current business models and operations?
- Can we do it the right way?
- Do we have the right business and IT competencies to realize this transformation?
- What’s the most appropriate development and change strategy?
- Do we benefit from it?
- How can we guarantee that once the budgets are assigned, the profits will in fact be ultimately realized?
- How and when are we going to measure the benefits?
As these four key questions make clear, digital transformation is about more than just investing in new digital trends. A clear digital transformation policy is crucial, it will help identify and realize your expected potential. Ensuring a transparent innovation process creates clarity about the steps you need to take, to carry you from a vague idea to a concrete and complete business case that fits with your overall organizational strategy.
“Organizations should use their initially-drafted business cases
as an operational management instrument,
rather than letting it gather dust in a closet.”
Before allocating the investment budget, objective decision models and criteria should be created. To make sure the benefits are realized, modern agile methods should be applied. Beyond that, organizations should use their initially-drafted business cases as an operational management instrument, rather than letting it gather dust in a closet.
The value of digital transformation
These are just a few examples of practices you could apply to successfully surf the wave of digitization. These management questions and practices are known as “IT Governance”. There is much evidence available, theoretical and applied, that companies who are mature in this area get a higher rate of return from their digital transformations. Unfortunately, there’s also a lot of evidence available to show that companies struggle with building this policy and therefore lose a lot of potential or even get negative returns from digital investments.
“Is your organization ready to unleash the value of digital transformation?”
Acquiring the correct competencies to shape these management practices and follow them up within the specific context of your company has never been more important. In short: “Is your organization ready to unleash the value of digital transformation?”
All of the issues covered in this article form the basis of our Business meets IT executive programs, which teach executives to build a bridge between business and IT.