Digital Transformation continues to be a theme this year as we see in a number of predictions blogs and articles. But what is it? Is it a thing? Or is it everything?
DX has been going on in some form long before we called it that. The buzz today serves to direct our attention to the spectacular — inventing new markets, changing society. But not all companies are going to do that, or even need to. But every CIO needs to be looking at how the delivery of IT services is fundamentally changing, and understand how rapidly changing technology and market opportunities continue to impact their business.
Some things today are making DX harder and riskier than it used to be. And those same factors also make NOT thinking carefully about DX in your org equally risky. Some of these intertwined topics include the following:
- Rate of change
- Proliferation of technology options
- Understanding/factoring in impact on IT organizations (and the rest of the enterprise)
- Separating the fundamentally sound tech from the shiny objects
- Delivering new services at the speed the market (internal and external) wants them, with the level of control and security also needed
Planning and managing technology transformations is more difficult now than it was in past years, and it’s difficult to know what to bet on. Change is changing faster than ever before. With new tech coming out every year and the decisions being made having multi-year horizons, how do you plan and manage the tech roadmap in this world?
This is a topic we work on with our clients, and it’s one we think about deeply at The StrataFusion Group. We’ll share some of our thoughts on how we’re doing that next time…
By Reed Kingston
In his recent blog post, Mark Tonnesen explained why he didn’t rely on traditional business case analyses, such as value case and return on investment (ROI) evaluations, to justify IT investments. I agree with Mark that these methods too often fail to support the right projects, and can fail to expose the wrong ones. I’ll put my MIT quant hat on here for a minute: if you are using tools that are prone to both false positives and false negatives, you should be looking for a new tool, or at least use the ones you have differently.
The problem is not that the financial analysis of an IT investment isn’t important—in fact, it is imperative, as it is for all investments. A good financial analysis casts light on some of the assumptions and trade-offs that are implicit in a large investment decision.
Problems arise when an investment comes off as lower profile, as happens often when reviewing IT investments. Decision making will always be biased against standalone technology investments as these are often poorly understood. How will “we’ll reduce network congestion and improve security by x%” fare in budget meetings against the sales and marketing team (“we’ll open up more markets!”), engineering (“we’ll design more products customers love!”) or operations (“we’ll lower costs with a new production process!”). That could be a pretty tough sell.
Getting to Good Decisions
Trying to justify IT investments without a business case driven by an internal customer organization can be an uphill battle. So how can CIOs and CTOs drive support for sound IT investments? Make sure important IT investments are tied to business cases that support increased revenue, reduced costs, increased customer loyalty and lower churn. Then provide financial analyses demonstrating how the proposed IT investment supports those business cases. This step defines the strategic value of the planned IT investment, making it a much easier decision for everyone to get behind.
Reed Kingston is a managing director at StrataFusion. Contact him at firstname.lastname@example.org; follow Reed at twitter.com/reedkingston.