This post originally appeared in the Forbes Technology Council site, a forum for elite CIOs, CTOs, and execs to share insights on tech and business. Don Lofstrom is the President and GM of Kodak Alaris Information Management.
Digital transformation (DX) continues to dominate discussions on IT spending as businesses look for ways to gain a competitive edge. As a new DX economy emerges, disruptive new technologies and processes will transform businesses of all sizes and across all industries. According to one IDC prediction, "By 2020, 50% of the Global 2,000 will see the majority of their businesses depend on their ability to create digitally enhanced products, services and experiences."
The business benefits of embracing the DX economy are numerous: increased productivity, lower operational costs, improved relationships with customers and suppliers and greater insight into valuable company data, to name a few. In fact, analysis of data from over 2,000 business and technology executives surveyed by PwC in late 2016 highlights a correlation between organizations that have more comprehensive digital strategies and those that achieve stronger financial performance.
Despite the acknowledgment of priority and the boardroom attention, digital transformation projects often stall. PwC’s study suggests that this is often caused by a disconnect between C-level execs and IT decision makers. According to the study, 35% of executives surveyed say a lack of collaboration between business and IT departments is an existing or emerging obstacle to achieving expected results from their digital technology initiatives.
An effective DX strategy both directly and indirectly drives a multitude of projects involving digital technologies. But these are handled by different decision makers and not necessarily in a coordinated way.
A recent survey by IT industry association CompTIA found that 27% of final decisions are now made by someone other than the IT department (i.e., the heads of other business functions such as finance, marketing, sales and logistics). In fact, IDC expects line-of-business (LoB) technology spending to be nearly equal to that of the IT organization by 2020.
What’s causing the friction between IT and business? The most common complaint I've heard from business decision makers is that they feel frustrated when their needs are not fully supported, when corporate priorities are ranked low on the IT agenda or when they’re forced to deal with systems that don’t fully meet those needs or are hard to administer. They also can feel left out of the vendor selection process by IT.
For IT, it can be difficult to understand the business’ requests, often due to requirements that are not clearly defined. The IT LoB partners can also struggle with larger IT directives for technology upgrades that are not understood or supported by the wider business.
These challenges often lead LoB and functional teams, as well as IT teams, to pursue their respective digital transformation efforts without involving the other stakeholders. However, when the business implements technology projects without input from IT, and vice versa, this can have a far-reaching negative impact.
The reality is that both parties’ needs are not far apart. For example, both attach the same importance to ease of use: Business users expect a consumer app experience, and IT looks for easy implementation and upgrades. In terms of spend, both parties are extremely cost conscious, but the business decision maker is focused on ROI while the IT buyer is typically geared to work within budget restrictions for acquisition and maintenance.
The transformation of an organization always starts at the top. Once a strategic initiative in the context of digital transformation is prioritized by senior management, the detailed planning and implementation should be monitored by a steering committee. With senior management from both IT and key lines of business on the steering committee, a more balanced and integrated approach can be assured. As a best practice, the committee should review and establish KPIs for each major project. To keep projects from flying under the radar, any investment above a certain amount needs to be reviewed by the committee.
This top-down process will identify disconnects and drive collaboration throughout the organization. IT project teams should be extended to include a representative from the business as a regular or extended team member, and vice versa. This will foster an ongoing dialogue, especially once the teams realize that the underlying goals of the other side are not that far apart.
Transparency of requirements, priorities and healthy discussions around the business impact will help establish trust and avoid or remove silos, from both a deployment as well as a decision-making perspective. Involving all stakeholders -- including relevant employees, partners and customers -- to obtain buy-in and compliance is the best way to ensure continuous improvement and success.