Pervasive IT organization as the key to successful digitalization
A large majority of businesses and other organizations are busy digitizing their operations. Until recently digitalization has been viewed as a matter that primarily concerned in-house IT teams and was not of much interest to the management, but now the situation has changed. Today many directors are actively involved in the digitalization – according to a survey we conducted among large and medium-sized companies in 2017, this share is about 50%, a considerable increase from a similar study carried out ten years ago.
Apart from top executives, other staff is also engaged in digitalization, with various departments, especially marketing and sales, launching numerous digital initiatives and projects. Many employees, particularly those of the younger generation, have a broad knowledge of the field and some of them are even developing solutions for their own needs and the needs of their coworkers.
Such company-wide interest in information science is definitely a good thing, but it has its challenges. Only a decade ago, the main issue was the lack of interest from the management and other staff, but today many times the problem is just the opposite: eager to improve the digitization of processes, employees will often attempt to do that on their own or through external providers, sometimes even without notifying their in-house IT teams. Clearly, in order to achieve successful digitalization, an organization must be properly organized. Therefore, the biggest challenge is how to manage and coordinate all the initiatives and projects in order to avoid chaos.
The concept where an entire organization is involved in IT matters is known in professional literature as pervasive IT organization. Of course the pervasive approach is not easy to introduce or implement. Unfortunately, there is no 'one size fits all' model but several efficient approaches have been proven that I will describe in more detail below. It is up to the management to study the options available and decide which are the best fit for their environment and how to put them in place.
Digital strategy and action plan
Before a company can start implementing digitalization, it needs to draw up a digital strategy. Whether it is a part of the company's corporate strategy or a stand-alone document is not important. What matters is that the digital strategy is aligned with the organization's corporate strategy. It is not enough for the digital strategy to follow the objectives outlined in the corporate strategy. On the contrary, digitalization options should be considered when designing the corporate strategy. In preparing their digital strategies, many companies involve external consultants, which is definitely beneficial, but we need to remember that a digital strategy is not a ready-made product placed on a shelf. External consultants can only assist the company's management team in the strategy preparation process by bringing in appropriate methodologies and in-depth knowledge of the field.
When the digital strategy is finalized, it is time to draw up a Digital Action Plan, an implementing document that contains information about all digitalization projects planned for the period ahead. This document has to be a joint effort of the company's management, IT team, and employees who will eventually use the new or upgraded IT solutions. Project implementation needs to be regularly monitored and the Digital Action Plan revised as needed.
The Digital Action Plan is normally monitored by a special task force, e.g. the Strategic Project Committee, which also includes the IT Director. The role of the Strategic Project Committee can be performed by any of the existing company bodies such as the board, especially in smaller companies. However, it is important that no project related to digitalization can start without the approval from this group.
Coordination and implementation of digital projects
Coordination of digital projects is equally important and is usually the responsibility of one person. This person is able to coordinate and run the digitalization process and engage different groups, if possible, all employees. This person can be the company's IT Director, but it should be noted that not all IT Directors are fit for the role since the tasks and responsibilities of in-house IT departments and their directors are very different. If a company’s IT department is mainly responsible for ensuring smooth operation of the existing infrastructure and its leader is not familiar with the company's processes and does not possess the required business competencies to operate at a strategic level then this is not the right person for the job. In that case, the role of a digital project coordinator can be taken over by the CEO, provided he or she possesses sufficient knowledge of digitalization specifics. If none of the above options is feasible, most companies decide to open a new position of a Chief Digital Officer (CDO) or even set up a separate Digitalization Department.
As regards the implementation of digitalization projects, it is best if these are carried out by mixed teams made up of IT specialists and business users following the Action Plan. It is also useful to prepare a project implementation methodology that outlines project phases and rules. Before starting a project and including it into the Action Plan, the company first needs to evaluate the project proposal using a cost-benefit analysis, for example, to determine whether it makes sense from the business perspective. The organization also needs to decide whether the new solution will be developed in-house or by an external development team, as this can have a major impact on the project team activities. Of course, new solutions have to be integrated with the company's existing practices.
Required digital competencies
Every company must know how to choose and use the approaches that fit their organization. Clearly, this cannot be done without certain digital competencies which employees need in order to be able to participate in the digitalization journey. The company management and departmental leaders need to understand a broader picture of how digitalization could support the company's operations and strategic direction. This requires the IT team to have business knowledge in addition to technological competencies, and be particularly familiar with the processes that the company performs.
Knowledge of digitalization is also required for all employees who will be involved in project teams. The scope goes beyond the programming skills, mostly referring to knowledge of projects management, outsourcing management, business analysis, and planning of IT solutions. Other skills cover business informatics, especially relating to the redesign of business processes, business intelligence and analytics, as well as sound understanding of the capabilities of corporate IT solutions.
The article reflects the opinion of the author and not necessarily that of Mikrocop.