10 Steps to a Digital Transformation in the Enterprise

We outline best practices for how IT can work with the enterprise’s business side to drive digital innovation and lead the required organizational changes.

According to a recent McKinsey survey, two-thirds of high-performing digital organizations say their CEOs personally sponsor digital initiatives, compared with 44 percent of their peers. Make sure your CEO is involved in crafting the organization’s digital vision, as well as leading the cultural change required to transform the business successfully.

Some business executives may be tempted to circumvent IT in an effort to expedite new digital initiatives. However, George Westerman writes in his book “Leading Digital” that Digital Masters all work with, not around, their IT units. Regardless of who “owns” your organization’s digital strategy, IT must be actively involved to ensure successful outcomes.

The challenge is that IT teams spend most of their resources maintaining existing systems, leaving little room to innovate. To balance these competing priorities, embrace what Gartner refers to as bi-modal IT, augmenting traditional IT services with Mode 2 capabilities. According to Gartner, nearly 40 percent of CIOs have embraced bi-modal IT, with the remainder planning to follow in the next three years. Mode 1 is traditional; Mode 2 is exploratory and non-linear, emphasizing agility and speed.

When implementing bi-modal IT, focus on four key aspects to develop effective Mode 2 capabilities: Portfolio: identify initiatives requiring a differentiated Mode 2 approach; People: build small, cross-functional teams that collaboratively deliver digital applications; Process: establish processes for iterative development and rapid deployment; and Platform: leverage modern cloud platforms that enable speed and agility.

Identify and prioritize your projects ideas so it’s clear which ones require a differentiated approach. Initially, this means identifying the right first project to get your initiative off the ground. But as the team matures, you’ll need to develop a more structured approach to your road map, including criteria for determining which projects to do when.

Build a small, cross-functional team that includes bright minds from both IT and the business. It’s key to tap developers who are able to collaborate closely with end users, bridging the gap between business needs and technical possibilities. Equally important, ensure the team has the right level of executive sponsorship to be successful.

Because requirements for digital applications are fuzzy, teams must work in short, iterative cycles, breaking applications into small components, creating functionality, releasing it and iterating continually based on user feedback. As you scale your digital innovation program, establish DevOps practices in order to enable continuous delivery.

Adopt a cloud application platform that eliminates constraints associated with traditional development tools, delivering the speed and agility required for Mode 2 projects. Position it within your application landscape and clearly define your deployment strategy. As you mature, further accelerate productivity and maintainability through component-based development and a private app store strategy.

Spotify founder Daniel Elk said, “We aim to make mistakes faster than anyone else.” Elk recognizes that innovation requires making mistakes along the way; the key is to fail fast and learn fast. To do this, you must be able to spin up experiments quickly and cheaply, test them with small audiences and have good measures in place to monitor progress.

While establishing a dedicated team is a great way to get your digital initiatives off the ground, your ultimate goal should be to create distributed innovation capabilities across your organization. This requires abandoning the traditional view of IT as a centralized function and, instead, providing the business with tools, frameworks and best practices to innovate themselves while IT maintains control.