- BUDGET: More than half of the DX initiatives that stalled or failed did so due to a misalignment between IT budgets and Line of Business budgets and a misappropriation of the costs and potential benefits. Aligning line of business budgets and IT budgets, as well as what returns are measured against them, stalls or kills more than half of the DX initiaitves. While there are some portions of the current IT budget that are predictable and purely a “Cost of doing business,” you will need to structure more of what has traditionally been considered part of the IT budget to be be seen as business investment toward business returns, what Deloitte refers to as Outcome-based budgeting. This means rethinking how investments are made, ROI is measured and how employees are compensated for success. If you are trying to cut budget out of the current IT budget to get started, you are barking up the wrong tree. Organizations have spent the last few decades squeezing IT budgets and leaving almost nothing for experimentation, let alone error. We often see managers with bonus or MBO structures that only recognize cost cutting, up-time, or other metrics that leave no room for experimentation or developing new expertise. This leaves the organization without resources to play with or the inclination to participate in impacting business outcomes, which leads to our next topic…
- FOCUS: Every bone and muscle of the organization has likely been honed to deliver incremental improvement and cost reduction. If this is the case, you can be proud of having an efficient organization, but it wont work for transformation. Gartner analysts have written extensively about the need and the benefit of slicing organizational goals in two and leaving sufficient resources in place to maintain the “lights on” technologies (Mode 1) while creating new structures in the organization for innovation (Mode 2). From the front lines to the board, you need to have a plurality of stakeholders accepting that the past can not be the model for the future. Some sacred cows must die. If you are just now getting around to converting paper forms to apps, it is probably because you had the same people that deliver “lights-on” services trying to find some time to innovate. Converting paper forms isn’t really an innovation anymore. Its an incremental improvement. This approach is both inefficient and error-prone. You need people and budget focused on returning business value through digitization to get to anything that really looks like transformation.
- OWNERSHIP: Should IT own digital transformation? Do you need a new DX Czar? Wrong questions. Digital Transformation is fueled by agile methods, cross-platform teams, and collaboration. The ideas and understanding needed for DX are scattered around the organization and the muscles to make DX effective are new. Many organizations have taken the well-documented route of forming a Mobility or Digital Center of Excellence (COE) or some other new body but this can be a trap. MTL Members tell us that sequestering DX to a separate group without also giving them budget and an executive mandate is a wasted effort. Unless you give this new org resources and authority (see #1 and #2), nothing will change. Lines of Business, IT, and leadership must align around the belief that integrating new applications of digital technology AND rethinking how business is approached can yield significantly better results and that the resulting organization will likely be organized differently – but we don’t know what that structure is yet.
- VENDOR MANAGEMENT: You don’t know enough about what your organization needs to write an RFP. Just admit it now. Small experiments. Fail fast. Your path to Transformation will go a lot faster if you change the way you think about vendors and ROI from vendor relationships. You need to be willing and able to fail and not cut off any heads. You need to trust in positive intent. You are going to have to find new wats of measuring vendor value. The companies that are ahead of you, lapping you in some instances, are the one’s that have gotten good at allowing small bets to fail and MTL members tell us this is hardest to do when it comes to vendors. If you had all the expertise you need you would have already been well on your way. We hear many stories of organizations asking a vendor to help with an initiative, give them lots of ink-conceived guidance, ignore their advice and then fire them for the outcome. Don’t do that.
- LANGUAGE: As with so many aspects of life, alignment (and understanding) requires that we develop a common language to discuss both problems and solutions. Both IT and the business need to learn bit of each other’s terms and ways of recognizing value. For the business, we have seen the most powerful tool for this in the framing of requirements as User Stories. There are plenty of materials available about how to craft a good User Story – some of it written in language that everyone can understand – but the key here is that a User Story reframes a problem or issue as a functional outcome that ultimately is the test of completion and, over many iterations, teaches both the consumer and the producer of the solution to make fewer assumptions about what the other side is thinking. For IT, the big opportunity is forcing them to frame all their activities in terms of business outcomes. Everything has a value and a cost and both IT and the business should agree on both sides of the equation. My favorite tool for this is the Reverse Income Statement. I have posted elsewhere on this tool, but the magic here is that you have to list all your assumptions as numerical values. Even if you don’t know the value, you have to put something down as an assumption. This will be most painful for the security-oriented team members.
No promises that Google is the true measure of our interests, but there certainly are lots of reasons to follow the aggregate search results. You ignore these trends at your own peril. Be sure to check assumptions regularly here : https://trends.google.com
For many Enterprise technologists, marketers, and product managers these trends can be disheartening because:
- It is nearly impossible to tease out the enterprise tech from the consumer tech
- The enterprise tech often struggles to differentiate with meaningful key words or phrases. Our love of acronyms makes it very challenging to follow of topic like MDM when it means both Mobile Device Management and Mid Day Meal.
Enterprise Mobility Key Words
The rise of Digital Transformation to Replace Mobile
As mobility is quickly becoming a foregone conclusion, digital transformation is taking its place. The reality is, you aren’t fully taking advantage of mobile until you focus on transforming your organization to a digital business.
Jim Collins has offered me no end of simple ways to describe complex issues to my consulting clients. His book are full of solid wisdom. I’m sure his next book will be no different, but for the moment I’m all about this article in the NYT about his methods. Genius – especially his hiring protocol.
Spend more time finding and selecting people. Learn about what makes someone successful in your organization. Get to the point where you can write it down and revise as needed.
90% of management is in the hire.