How to Jump-Start a Digital Transformation

How to Jump-Start a Digital Transformation

          
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How to Jump-Start a Digital Transformation

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    Leading and Sustaining Change

    The third step in our digital transformation methodology requires the right set of internal resources. Even successful pilot projects and prototypes will not achieve their potential without organizational support. Companies need to nurture these projects to make sure they become sustainable at scale.

    Most important is leadership. The company’s digital agenda needs to be driven by executive management, with visible support and accountability. (Bottom-up approaches usually do not last.) Talent and culture are critical as well. The company must hire high-potential employees with skills in such areas as agile development and analytics. And it must build a “venture” culture within both the business units and IT—including a trial-and-error mind-set that not only tolerates failure but understands that failure is a critical part of the process. In this effort, HR should work closely with the business units.

    The company also needs to determine how IT can best support its digital initiatives and whether to house its digital capabilities within the business units or in a corporate center of excellence (either within or outside the company). Many companies opt to deploy dedicated new-technology platforms—particularly for customer- and analytics-focused initiatives—which function separately from the core IT department and have their own databases and other infrastructure. Digital initiatives require different capabilities and entail much faster development cycles, and they often benefit from having a clear place in the organization, along with dedicated resources. (See “An Auto Manufacturer Uses a Two-Speed IT Structure to Support a Digital Initiative.”)

    Many companies also need to break down institutional barriers and silos in order to foster a more collaborative approach between IT and the business units. Cross-functional teams put more eyes on each initiative, allowing problems to be rooted out early and promising ideas to be pushed out to market faster. (See “A Global Bank Revamps Its Organizational Model.”)

    Finally, companies should adopt strong change-management processes. A key challenge is meshing digital initiatives with the company’s established operations and ensuring that employees and managers on both sides continue to collaborate so that digital successes can spread throughout the organization. At the same time, even failures present an opportunity to learn.