Business and IT Alignment: How Smart CIOs lead Digital Transformations

Across industries and companies of all size segments transformations are underway. Amongst established companies, CIOs lead nearly 40% of these mission critical transitions. CIOs have a unique opportunity to help their companies remain relevant, gain a competitive edge and eventually elevate to a leadership position. In these digital transformations, is also a unique professional opportunity to transform their own career trajectories from information technology to business leadership.

A study of transformations undertaken at 5,000+ companies unfortunately shows that a majority of these transformations fail to produce material business impact. Data further shows that about one third of companies across every industry will lose relevance and perish over the coming decade. What this implies is that the cost of failure of digital transformation initiatives goes far beyond sunk costs invested – they affect the company’s competitive position in ever shrinking windows of opportunity and ultimately its survival.

The #1 reason for failures identified by Trasers(Trianz Research)is a major disconnect between business and IT which begins from the very definition of digital transformations. Consider the following:

  • Business leaders define digital transformations as a reimagination of products and services as well as a reinvention of the customer experience from their very first contact.

  • Only 39% of IT leaders surveyed understood this view. The rest defined transformations as new websites, mobility, the use of analytics for improving experiences or gaining operational efficiencies.

The Impact of Business-IT Disconnect

This disconnect extends from IT leadership to managers responsible for critical initiatives. Our research also shows that initiatives that are strategized, structured and program managed by business leaders (or jointly with IT) produce far more effective results.

Digital Transformations are iterative

In nearly 50% of organizations, business does not trust IT’s ability to understand or execute to its real needs. Whereas IT teams feel that they have executed really well.

The only view that matters is that it is the business window of opportunity at risk. It is therefore no surprise that business organizations end up hiring outside consultants and systems integrators or create ‘shadow IT’.

This challenge is further compounded by the rise of ‘born-digitals’ in every industry. Startups in every industry begin with a technology-led value proposition. Their products and services collapse established value propositions into ‘multi-function’ models; they introduce digital interactions, collect telematics data and continually improve customer value and experience. In the background, they engineer everything in the Cloud. One common pattern in the leadership of these organizations- their CEOs and top management often come with technology backgrounds and hence they have zero gap in their approach. These ingredients combine to help startups succeed rapidly.

In order to be effective and influence a true success of the company as measured in customer adoption of new value propositions, satisfaction and continued revenue as well as profit growth, CIOs must urgently address this fundamental challenge.

How do Smart CIOs address the Business-IT Disconnect: A 5-Step Playbook

  • Improve the ‘Business IQ’ of the IT organization:

    Smart CIOs understand that it is not about their personal smartness. Investing in business knowledge for their teams provides the highest returns in the form of success and credibility. Their leaders of Cloud or Analytics or Applications are armed with industry change and function-specific digital transformation knowledge, are trained on business issues, joint planning and execution.

  • Excel at what they Control:

    An area that CIOs control completely is IT infrastructure. By migrating to the Cloud, smart CIOs achieve significant cost benefits. Even more important is the acceleration of the engineering cycle as Cloud infrastructure takes 8 minutes to procure and provision as compared to months for traditional, on-Prem infrastructure. Both these benefits create credibility with the business.

  • Lead with Analytics:

    Our research shows that CIOs who use analytics in developing digital transformations prioritize objectively and therefore achieve superior results. To be clear- using analytics for digital transformation strategy does NOT mean a complex, enterprise-wide analytics initiative. It simply means getting the right insights for strategy in place.  Many CIOs go to the extent of benchmarking themselves against competition to know where they stand. In the process, they eliminate biases, subjective preferences, personal agendas, etc.

  • Plan and execute jointly with Business:

    Executing together creates trust, openness, better decisions and reaction mechanisms. Collaboration creates continuous communication channels and a certain joint vesting process between business and IT which leads to superior commitment levels.

  • Succeeding with Analytics:

    Once they gain traction, smart CIOs continue to use analytics to measure progress and to see what’s working and what’s not. This helps them continuously align and communicate their successes credibly.

Beginning with improving the Business IQ of their teams and through these specific steps, smart CIOs eliminate the business-IT gap in digital transformation. And there begins a virtuous cycle for the company, for the IT organization and for their personal success and credibility.

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