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The Pressures of Digital Transformation

By Bob Mudhar, Partner, Citihub Consulting

A firm can have a thin veneer of a digital transformation perhaps by a new website or a mobile offering. Behind this can be a mixed bag of legacy and current systems with inconsistent approach to technology management and operations. Businesses can be content with this approach as the public image is of a firm that has transformed itself digitally. However, in Citihub Consulting’s experience, a digital transformation will deliver more for a business and be more sustainable if it is backed by the transformation that goes throughout a technology organisation. This means ensuring a software development lifecycle is fully aligned to the digital offering.

The use of development toolchains ensures automation at every step and eliminates any need for manual intervention in the build, test, and deployment of software. Technology services should become automated and self-service. For developers to request development servers, the process should be automated, servers are hosted in the public cloud and then controls must be put in place to ensure they are taken down when finished. A digital transformation is much more effective when it sweeps through an organisation and aligns everything to the more public image of many transformations.

Why are relationships straining between different c-suite decision-makers?

Traditional technology representation at C-level is breaking down. It was common for all technology and related services to be represented by a single C-level person – be that a CTO, CIO. Underneath that title would be technology infrastructure, internal applications, IT security, data, and a firm’s external-facing client or internet operations.  With the importance of technology as a whole to many top tier organisations (regardless of industry); the C level may now have many representations aligned to specific areas. A Chief Data Officer may exist alongside a Chief Information Security Office, with perhaps a Chief Technology Officer. Each will have their own objectives and agenda. They will no longer have a unified reporting below the CEO. Each set of objectives and agendas will naturally cause tension.

Why is it that this divide between finance and IT is particularly bad, and is worse in the UK than elsewhere?

Technology is historically a cost centre. It is a cost for the front office businesses to bear. Commercial organisations are increasingly more like technology firms with a shop front. Hence, the business is actually a technology organisation and the traditional roles between business and technology are reversed. However, finance does not always follow this logic and continue to view all technology spend as a cost, as a burden, or as an overhead to an organisation. This leads to behaviour, such as cost allocation, where technology costs are spread over businesses as a tax. It leads to missing the value of technology investment to lead to revenue growth. In the UK, many firms are still dominated by finance backgrounded types rising to C-level. Tensions are created between finance and technology when there are entrenched and out-dated perceptions of technology in a modern top tier enterprise.

How can decision-makers help to create bridges that can improve collaboration and smooth the process of digital transformation?

Key decision-makers need to be the enabler of technology investment for their digital transformation. They should look at FinTech firms and start to understand the potential agility and reduction in time to market through modern technology practices. Leaders should shift to working with technology teams to understand what investment is needed to achieve FinTech levels of business alignment. It is unreasonable to expect a large enterprise to be a Fintech, but it is entirely possible to take a version of the best practice and see a real difference in an organisation.