Digital IT Function Transformation for Getting Back to Business
Digital IT Function Transformation for Getting Back to Business
Author: Dr Terri Simpkin, Associate at Portman Partners
Before COVID-19, many of our conversations with business leaders centred on digital disruption and the accelerating adoption of technology across industries.
Digital transformation was already reshaping how organisations operated, engaged with customers and competed in their respective markets. The pandemic intensified this shift, forcing businesses to adapt at a pace few had previously anticipated.
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Image Source: Innovative Quality Solutions, 2020
Digital Business Transformation
Technology continues to evolve at an extraordinary pace. The changes taking place across industries have only accelerated as organisations respond to shifting customer expectations, new digital capabilities and increasingly competitive markets.
Technology, however, is only one part of the transformation journey.
Behavioural Transformation
While technology can change rapidly, organisations and people generally adapt at a much slower pace.
Changing established behaviours, mindsets and ways of working takes time. Employees must often learn new skills while simultaneously letting go of familiar processes and practices.
Within larger organisations, this challenge becomes even more significant. Existing structures, processes, incentives and cultural behaviours can create considerable momentum around established ways of working.
The larger and more complex the organisation, the greater the level of organisational and cultural transformation required.
Digital business transformation therefore cannot simply be about implementing new technology. It involves rethinking the organisation’s business model, operating model and customer experience, supported by technology that enables innovation and differentiation.
The challenge for organisations is to close the gap between the speed of technological change and the speed at which the organisation itself can adapt.
Six Elements of a High-Performing Agile Organisation
Our experience working with organisations across multiple sectors has shown that building a high-performing and agile organisation requires six key elements:
- Organisational Design
- Organisational Culture
- People Engagement
- Ways of Working
- Management & Leadership
- Governance & Funding
Successful transformation begins with getting the organisational fundamentals right.
The organisation’s vision, strategy, structure, culture and operating model must support the direction in which the business wants to move. Leadership and management must also actively support and champion the transformation.
People engagement is equally important. Sustainable transformation happens when employees understand the purpose behind the change and are equipped to contribute effectively.
Modern ways of working, including Agile, DevOps and product backlog management, can then help organisations deliver products and services in a more responsive, collaborative and efficient way.
These capabilities must ultimately be supported by appropriate governance and funding structures to ensure transformation initiatives remain sustainable and aligned with strategic priorities.
Realigning the Business Model
The conversation around digital transformation is no longer simply about adopting new technology.
Organisations must also consider how their overall business models need to evolve.
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Image Source: Innovative Quality Solutions, 2020
Digital transformation is fundamentally about rethinking how an organisation creates and delivers value.
This requires leadership teams to examine their strategic vision and determine which future capabilities and competencies will be necessary to achieve their objectives.
COVID-19 accelerated many of the digital trends that were already reshaping industries.
The events industry, for example, rapidly adopted virtual and hybrid event models. Marketing and sales teams were required to create and distribute digital content faster than ever before to engage audiences through online platforms.
At the same time, IT departments across industries had to transform rapidly to enable employees to work remotely while maintaining business continuity, security and access to critical systems.
The competitive battleground increasingly centres on an organisation’s ability to reinvent its business model, improve customer experience and increase operational efficiency. Technology can become a powerful source of competitive advantage and differentiation.
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Image Source: Innovative Quality Solutions, 2020
Building an IT Function That Is Fit for Purpose
Emerging digital and technology trends continue to place pressure on organisations.
As businesses transform, the IT function must also evolve to ensure that it remains aligned with the wider business and digital strategy.
IT can no longer operate purely as a support function.
Modern organisations increasingly require technology teams to actively enable business growth, improve customer experience, support innovation and contribute to operational efficiency.
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Image Source: Innovative Quality Solutions, 2020
As organisations transform their IT functions, they must also understand the technologies and trends that are emerging around them.
At the same time, many businesses are operating under increasing financial pressure. Technology investment therefore needs to be carefully prioritised.
The objective should not simply be to invest in more technology, but to invest in the right technology — solutions that support strategic goals, improve organisational agility and create measurable value.
IT Maturity Model (ITMM) and the Four Pillars for Transformation
The IT Maturity Model (ITMM) is a framework developed to assess the maturity of an organisation’s technology function across several critical dimensions.
These include:
- Strategy
- Organisational structure
- Processes
- People
- Capabilities
- Technology
- Applications
- Infrastructure
- Data
The model recognises that IT functions typically progress through different stages of maturity.
An organisation may initially operate with an IT-centric approach, where technology is primarily viewed as a technical support function.
As maturity increases, IT can become more operationally focused, improving efficiency, reliability and integration across the organisation.
At higher levels of maturity, technology becomes an integrated business driver, contributing directly to organisational strategy, customer experience, innovation and business performance.
Ultimately, the goal is to create an IT function capable of delivering both technology excellence and business excellence.
Organisations that successfully align their technology strategy, people, processes and operating model will be better positioned to respond to disruption, adapt to changing customer expectations and identify new opportunities for sustainable growth.
Digital transformation is therefore not simply a technology initiative.
It is a business transformation — enabled by technology, driven by people and guided by strategy.
