Now is the time to take an offensive digital strategy. Here’s Why and How
IT Score for CIOs
Gauges your function's maturity, specifically in activities that are critical to meeting enterprise objectives.
Now is the time to take an offensive digital strategy. Here’s Why and How
Opportunity exists to navigate and come out ahead of today’s economic headwinds. Here's how and why to invest in digital initiatives and technologies.
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“Digital” isn’t a monolithic strategy, and it’s critical to distinguish between objectives:
Digital business transformation means a change in three of the four components of a business model (customers, value propositions, capabilities and financial model) so represents a radical shift in the way an organization delivers value to customers or the segments it serves. Wholesale enterprise business model change is rare; transformation typically happens only in one piece of the business at any given time.
Digital optimization improves existing operations and business models. The business model remains the same, but how the organization operates changes. For example, you digitalize key capabilities required to deliver on your business proposition or profit model. Near-term optimization can be a building block for transformation later.
There are four critical components to becoming a more digital enterprise (whether transforming or optimizing):
Gartner argues that digital maturity in the IT organization is the sum of four core and mutually reinforcing capabilities:
Strategy. Digital strategy calls for both digital transformation-and optimization-oriented outcomes, but the mix depends entirely on your objectives. (Transformative is more radical and more risky).
Governance establishes decision making within the organization. In mature enterprises, better decision making aligns to value, risk and strategic impact.
Enterprise architecture (EA) must translate business strategy into business outcomes and realizable action plans that inform, operationalize and drive business capabilities, value streams, business processes, I&T decisions and changes to the underpinning and supporting IT estate.
IT delivery ensures that the right internal IT services are offered at the expected price and quality levels to sustain IT-enabled business capabilities and assets over time.
Communicating the business value of IT requires a focus on business outcomes delivered, not IT systems managed or work done.
Gartner urges CIOs to improve the clarity of business-value-of-IT (BVIT) communications by using language, metrics and reports that focus on IT’s impact — not the effort expended — on delivering technology-enabled business outcomes.
No single metric is “the” best at demonstrating BVIT. The most valuable metrics are those that can influence business decision making in your organization.
There is rarely a shortage of metrics so the CIO’s task is to elevate a select few operational KPIs to make them specific to the applications and infrastructure that support specific business outcomes and specific business metrics that are important to stakeholders.
CIOs and their teams require clear visibility into their IT spend to ensure efficiency and strategic alignment. Leading organizations regularly examine and benchmark spending across multiple cost views to facilitate smarter spending and better business outcomes. To do the same:
Establish a baseline of your total IT spend and staff levels.
Compare total IT spend to industry peers.
Identify areas for improvement.
Improve IT cost management with multiple views of IT spend.
Establish future budgeting or efficiency goals.
Shift IT spend to better align to business value.
Communicate performance to stakeholders in your organization.
Build a compelling story around how IT spend is strategically aligned to enable business objectives.