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Creating Capacity for Digital Transformation: The Value of Strategic Planning

Creating Capacity for Digital Transformation: The Value of Strategic Planning

Organisations are under mounting pressure to deliver digital transformation projects. But as digital technologies impact every function across the enterprise, IT is stretched thin, tasked with supporting legacy systems while introducing new innovations in a bid to support business growth.

Now, more than ever, CIOs need to be able to make smart trade-offs in ‘where and how’ they use their limited resources. Some IT chiefs are taking a strategic planning approach to bring IT closer to being an enabler of revenue and growth rather than a cost centre. This is a particularly valuable scenario in any given digital transformation project.

CIOs gathered at Sydney’s Rockpool restaurant recently to discuss how they are creating a capacity-centered approach that will evaluate resources and their availability for their important digital transformation projects. The luncheon was sponsored by Planview.

According to David Davies, APAC regional director at Planview, many organisations make the mistake of starting digital transformation projects before they have fully assessed how the project supports and impacts the overall business strategy. Studies show that better up front decision making helps to reduce waste and inefficient use of resources.

“Many CIOs struggle with the continuing increase in demand for more projects but taking a step back and adding careful analysis of which projects they should start will help manage this increase in demand,” Davies says.

“It is vital to ensure there is a method to understand the demand, align this to the overall strategy and prioritise the demand. Adding a front end process that enables an organisation to ensure it is working on the right projects positions it to make better use of resources.”

For Stephen Haddad, head of technology at Southern Cross Austereo, the allocation of resources from existing projects or ‘business as usual’ work to focus on making digital transformation work is a big challenge.

“Organisational leadership has a strong desire to be doing digital transformation but we always need to ask the question, ‘how much of this is ‘business as usual’ moving towards digital and how much is real transformation?’ he says.

The company has several digital transformation projects in flight including digital radio and digital playout systems that enable the audience to listen to its stations across multiple devices both live and in catch-up mode.

“This is critical to our business as audience numbers is a primary metric. This project was staffed with dedicated resources and committed funding,” he says.

Julie Canepa, head of IT Australia and New Zealand at Cisco, says the organisation is well into its digital transformation journey. The IT vendor began this process early because it was growing and simply did not have the IT capacity to keep up.

“We had to rethink how we could deliver our services,” says Canepa.

Cisco’s biggest challenge during its transformation program has been getting all of its business units aligned, she says.

“This is where our ‘digital transformation office’ helps. For some of our projects, having this office as part of our strategic leadership team helps to pull together all of the impacted teams to focus on shared priorities.

“It has been critical for us to not only focus on the technology aspects [of transformation] but also the business processes and the people with equal importance. Digital transformation has been about so much more than just the technology. The business has to be ready for the change,” he says.

Warren Havemann, CIO at The Smith Family, says the organisation has been committed to strategic digital transformation initiatives since 2012 with strong board support.

“Transformation started first with the area that would support an increase in funding for digital and then moved to the areas that support improvements in efficiency and effectiveness,” he says. “With this support and prioritisation, capacity was easier to secure.”

The Smith Family has also adopted a methodology that supports failing fast so prioritising between projects is not so much of an issue, he says.

“Prioritising features within successful projects is more of a challenge when deciding between revenue-generating features versus features that promise high levels of intangible benefit,” Havemann says.

The organisation has implemented Agile processes for project management and governance. These processes have provided a clear view and balancing of supply and demand for project teams.

“A more challenging aspect is achieving a similar view for all resources involved with the project across the organisation,” he says.

Alister Dias, vice president and managing director, VMware ANZ, adds that in his conversations with CIO, CTOs and architects, he hears one common thread – the need for greater agility.

“But it’s hard to focus on the business differentiator when the operational management of takes is most of the time. The top operational challenges in the market continue to be highly distributed, multi-cloud, mobile worlds that are ever changing and growing,” he says.

Cultural challenges

The cultural challenges of digital transformation are often overlooked, says Planview’s Davies. Too often, organisations focus on the execution of projects and little emphasis is placed on the ‘softer’ aspects of change.

“The best planned transformation must include a significant amount of change management to ensure the adoption of any change is understood and embraced,” he says.

“It should be considered from the start of the transformation and not an after-thought. We have seen successful deployments where organisations set clear communication strategies that utilise multiple channels that target all stakeholders. This helps the organisation reduce the resistence to change and the risk of poor adoption throughout the organisation.”

The Smith Family’s Havemann adds that enabling a digital culture requires both ‘customer empathetic design’ and ‘fast try measure, learn and improve cycles.’

“It’s important to select a model for the change management process that’s appropriate for the organisation’s current state and its strategic digital intent,” he says.

Ensuring user empathy, involvement and feedback supported by an implementation process that encourages learning and change, team level decision making and high levels of employee engagement are all critical success factors for digital transformation, he adds.

Cisco has needed to rethink the skills it needs for the future and make some big shifts to accommodate this change, which have impacted hiring choices, training and where the company places talent.

“We need leaders who are comfortable ‘being uncomfortable’ – who can wear multiple hats and lead through uncertainty,” says Cisco’s Canepa.

“We also need staff who understand business and business leaders who understand IT. In some of our transformation programs, we have disrupted ourselves, requiring us to change legacy business process and do things differently. Such big change has not always gone down easy,” she says.

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