What do you think?
In a freewheeling discussion with CIO&Leader, Jaspreet Singh, Associate Director, Ernst & Young LLP, talks about the various facets of IT transformation and believes the finance organisation can be a CIO’s greatest ally when properly engaged.
What is needed is a radical transformation not only in how IT does its job, but in how business and IT work together.
To many CIOs, IT transformation means nothing. It’s just a hype created by consultancy firms to generate business. What do you think?
We live in an era where change — imposed by regulatory or market forces — is rapid, radical and far-reaching. The market is changing in such a way that consolidation, technology shifts, new business models and consumer behavior are forcing actors in the market to adapt to the future while business is still ongoing. Businesses today encounter near-constant upheaval, which they can endure and even benefit from when supported by a rejuvenated IT organisation.
Information technology plays a critical role in the success of significant business transformations — not only as a key enabler but also as a source of advantage.
However, most organisations are not even coming close to realising the potential benefits of their IT investments. Many organisations are stretched to the breaking point just trying to maintain existing systems. Critical new projects are being shelved. The new projects that are done are often deliv- ered late, over budget, and missing key functionality.
We see many organisations in which the business doesn’t trust IT and IT feels marginalised by the business. In many cases, senior management has little awareness of IT governance processes, and IT is viewed as a mere support function with no defined mission. This is neither hype, nor trend, but reality. These problems can be solved, but not with piecemeal solutions. What is needed is a radical transformation not only in how IT does its job, but in how business and IT work together. Thus, in today's change-driven environment, it has become imperative for IT to transform from its traditional function as a technology provider and become an adaptive, responsive and nimble organisation.
IT transformation is a very broad term. It can mean re-modeling the architecture or the application mix, or shifting from a centralised model to a decentralised one, or simply cost cutting.
So, how do you rate or categorise IT transformation?
IT transformation has become a popular piece of the techie vernacular. Describ-ing such an extensive topic in a universal, narrow-scope manner is like tilting at a windmill. But if you ask me, it is something broader than a specific initiative or strategy. It’s about integrating complex IT systems and streamlining IT processes, rationalizing the existing technology base; and enabling them to take advantage of modern, business-friendly technologies to better align the IT system to the needs of the business. In short, it ensures that IT improvesoperating efficiencies, reduces operating costs, ensures regulatory compliance and business agility, helps business growth, and enhances business value.
It is more than mere optimisation or modification of engineering components, but is rather a holistic revamp of the existing technology base used to support the company’s mission-critical business. Ironically, IT Transformation is not about changing things for the sake of change, but about better aligning the IT system to the needs of the business.
While talking of IT transformation, what are the key barriers faced by CIOs?
Communication: When it comes to gaining buy-in on IT transformation programs, many of the CIOs fail to convince key stakeholders. Communicating the value and ben- efit of an IT transformational program to the business is one of the leading challenges that CIOs face.
Perception of the IT department: The legacy perception of the IT department as “back-office order takers” hampers a dynamic CIO’s ability to be seen as an agile business partner, delivering new and market differentiating business capabilities. This perception can only be altered by articulating the benefits in business terms that resonate with business leadership. CIOs need to focus on enabling the stakeholders to understand the drivers and business benefits; providing clear and continuous communications, partnering with finance to make costs visible and showing due considerations for alternatives, especially from the viewpoint of business segment executives. Uncertainty and Risk mitigation: In the rapidly changing market and technology environment, it is not difficult to foresee that enterprise level IT transformation will encounter a lot of uncertainties. Most of these uncertainties are not predictable in terms of timing and scale at the beginning. To minimise the risks, CIOs need to carefully take care of this kind of risks with a right methodology and frameworks in place to develop a solid mitigation strategy before the transformation journey starts.
CIOs or IT leaders have the tendency to confide in their technical comfort zone and the board feels that the CIO's transformational efforts are not in-sync with the goals of the company or the client's expectation. How can one possibly reduce this gap?
In the old days, it was simply a matter of keeping IT projects on time and on budget — but today, the CIO has to be active across every aspect of complex investment programs which can cost millions of pounds. Today, the CIO manages IT change – but, IT is increasingly involved in driving business changes which keep a company ahead of the competition. The CIO needs identify what business changes are required to improve performance, and take on accountability for driving end-to-end business process transformation.
The experience which IT has gained from technological innovation can be leveraged into the business operating model. The new role will include facilitating collaboration, both internally and across enterprises; managing the rapidly changing area of business and technological security; and tackling the challenges of information and knowledge within the organisation.