Organizations are looking at Digital Transformation to bring significant change to their business. The intended outcome is to modernize and refocus the efforts of the IT organization and portfolio to drive greater business success. Unfortunately, organizations are finding very mixed results from their efforts. How does one find success and ultimately drive greater business success? Hint: Digital transformation is not the starting point.
CHANGING THE DIRECTION OF FOCUS
Digital transformation may be where many want to start the conversation, but it shouldn’t be. It can’t be. The problem is that digital transformation on its own does not provide much (if any) value for organizations. Sure, it may modernize the IT portfolio of products and services, but what business value was gained?
When digital transformation is the starting point, it is challenging to align with specific business outcomes.
The first step is to understand how the business aspires to transform. How does the business plan to transform? This is a business conversation, not a technology one. Depending on the maturity and current state of the organization and leadership team, the focus may be challenging at first to work through. There are three guiding principles that dominate conversations for boards of directors and executive teams.
THE CIO TERNION CONCEPT
The three principles are 1) Revenue growth, 2) Customer engagement and 3) Efficiency gains. These three principles provide valuable business context to determine specific business outcomes. And these three principles are the focus and topic of conversation among boards and executive teams. They drive the overall focus for the company.
Business transformation drives the context and direction for digital transformation, not the other way around.
Aligning with these principles brings focus and alignment across the organization. It is important to understand how traditional and transformational CIOs and their respective organization fits into the model. Traditional IT organizations focus almost solely on efficiency gains and miss out on opportunities to engage in revenue growth and customer engagement. Transformational IT organizations take a different tact by focusing on the business outcomes of revenue growth and customer engagement. For the transformational IT organization, efficiency gains are table stakes.
The CIO Ternion concept brings three principles that drive business transformation and ultimately digital transformation to a successful outcome.
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Well said, Tim. You can’t do digital transformation just because “we need to do digital transformation.” We talk about this at Corevist in terms of “the business case.” What’s your “why”? If you haven’t defined that, oh boy, you’re nowhere near ready.