Knowing the Unknown: Taking the Mystery Out of IT Transformation

2. Investing in innovation

Organizations usually consider IT budgets in two categories: maintaining existing infrastructures and investing in new projects. For IT transformation, the balance and relationship between these budgets needs to shift. According to the IT transformation maturity curve study, transformed organizations that adopted innovative IT infrastructures reported that an average 46 per cent of their budget was freed up and spent on innovation, much more than organizations that ranked as less advanced. Moreover, organizations ranking lower on the maturity curve spend around two-thirds of their IT budget on maintaining existing systems.

When demystifying and defining transformation strategy, IT leaders need to make sure current IT infrastructure is also enabling innovation—are legacy technologies creating performance bottlenecks, cost overruns, slower time-to-market, and capability shortfalls? This could be holding back transformation if so.

Transformed IT organizations also place strategic bets on a broad array of modern data center technologies, from high-performance, easy-to-scale storage systems, through pre-packaged, easy-to-integrate converged and hyper-converged systems, to flexible, software-defined architectures. An example of a successful IT transformation involves E-Konek Pilipinas, an IT service provider offering SaaS in the logistics and transportation industry in The Philippines. Through a re-focus on innovation, E-Konek Pilipinas was able to redefine its strategy and transformed the delivery and consumption of IT services, as well as dramatically reduced operational and capital expenditure by migrating to the cloud environment.

3. IT aligned with the business

Legacy organizations are often hampered by the ‘but it used to work for us in the past’ mentality. Such a mindset has no place in the digital era. Better knowing how IT transformation should take place requires IT leaders to establish clearly defined milestones and make sure that top management has a close eye on developments. In fact, when respondents working at transformed IT organizations were asked to categorize how their line of business stakeholders feel about the IT organization, 21% (seven times the rate observed among legacy organizations) reported that they are seen as a competitive differentiator and 49% reported they were seen as a valued service provider.

Transformed IT organizations keep digital transformation efforts on track as they ensure alignment with other business leaders. Frequent meetings with leadership and other stakeholders who can provide objective advice and feedback on meeting business expectations are essential. Such alignment can be reinforced with formal reporting structures that give CIOs direct access to their CEOs and other executive leadership positions.

4. Skills transformation

Transformed organizations realize that as legacy IT evolves, new skills, abilities, and ways of thinking about how IT serves the business will be essential to success. Only a few people in today’s workforce already possess required skill sets for the digital era. For example, GE, the 120-year-old company that has evolved from an organization that was predominately involved in selling industrial equipment to one that offers data and analytics software services across their products portfolio, has recently launched a proprietary skills curriculum to train their employees for new, highly valuable jobs needed in the digital era.

It’s crucial for IT and business leaders to conduct a thorough analysis of its most important resource to identify and work to eliminate skills gaps that could cripple IT’s ability to execute strategic transformation initiatives. Organizations might look for the guidance outside or develop a skills development training program in-house.

IT transformation is a first step on the digital transformation journey. It can come in many designs, depending on business requirements, yet the target goal is the same: an IT organization that has achieved a level of maturity that is agile, creates more opportunity for innovation, and has a fixed seat at the table with business decision makers. For many, that journey is filled with unknowns. But through a strategic focus on these four key areas, and collaboration with experienced partners, organizations can better understand the steps they need to take to define their IT transformation future.