Sal Laher at IFS argues that CIOs need to grab digitalization by the scruff of the neck by looking for quick wins, rather than writing lengthy strategy documents
The disruption to working practices and the economic constraints many businesses have seen since the start of the pandemic initially led industry observers to expect spending on digital transformation projects to fall.
In fact, the reality is that many businesses are preparing to increase spending in this area. Despite the macro-economic disruption in 2020 and much of 2021, a recent global research study from IFS found 52 percent of companies intend to increase their spending on digital transformation.
While these are encouraging statistics, simply investing in technology will not in itself deliver the added business value that companies are increasingly crying out for. Instead, businesses need to harness technology to drive through positive change in workflows, processes, behaviours (change management) and business models that rapidly deliver greater value for the business more quickly.
Initiating this change and leading the delivery of it across the organisation needs to be the role of the CIO or CDIO, assisted by other technology-focused executive or board members. Although everyone in the boardroom should by now be digital advocates, it remains firmly on the CIO / CDIO to deliver the results of this change to the business at pace.
Few CIOs still believe the core of the job is to keep the lights on and reduce costs. The recent IDG 2021 State of the CIO survey found that 96% of CIOs said their role is expanding beyond traditional IT responsibilities but this belief is not backed up by action: many still tolerate a bureaucratic culture within their organisation.
All too often, these board-level execs exist in an environment where time-consuming, laborious processes continue to hold sway. Their lack of proactivity is usually down to either not having enough confidence to take the initiative and be vocal about the changes required, a culture of complacency, or most damagingly, a combination of the two; in which case these technology-focused leaders are holding businesses back.
CIOs and their peers need to effect change and make digitalization happen today to avoid their business missing commercial opportunities, damaging the bottom-line and adversely impacting competitive edge.
Today, we are seeing a growing impetus behind changing mindsets and processes and thereby delivering enhanced internal efficiencies. There is a real desire to make processes more positive and dynamic for users, but desire alone isn’t enough.
This kind of change is an urgent requirement and it’s in the hands of CIOs, CDIOs and CTOs to make it happen and not wait for someone else to take ownership of defining the value and roadmap to digitalization. They need to grab the initiative and be ‘a wolf in the boardroom’. This takes boldness, conviction and passion.
To kickstart digital transformation means making it clear that manual over-engineered, time-heavy processes will no longer be tolerated because they are bad for business.
That does not mean that the CIO should be working in a silo of course. In fact, to own this transformation, its challenges and results, the CIO must orchestrate a much higher level of coordination with other executives.
The need to cascade the intent throughout the company with the confidence and authority to get the buy-in and endorsement of leaders and employees from across the business and work with them to effect change is where it all starts. It is an opportunity to lead from the front and say: “I will work with everybody – let’s do this and do it now.”
Putting new processes in place
It is vital that CIOs and their peers feel empowered to make that happen and imperative that this joint ownership of the digital transformation is executed by each function well and delivered efficiently; an outcome that’s far from easy.
The first big challenge is that the move to “digital working first” entails a major culture shift. A culture based on multiple manual checks would be a culture based on scrutiny. That is neither an efficient way of conducting business processes, nor a popular one with employees, who are much more likely to positively engage in a digital approach that is fast, simple and effective.
Accuracy and compliance are critically important of course. But achieving these goals is actually simpler in a digital environment, with new procurement or travel policies in place to which it is easier to comply. Doing this well also builds trust across the organisation, something which is critically important to CIOs because it helps ensure adoption of digital technology consistently across the business.
Promoting a step-by-step approach
When it comes to shaping and delivering digital transformation, CIOs can be guilty of trying to do too much at once. Rather than focusing on getting quick results in specific areas to build stakeholder engagement, it happens that CIOs will write a lengthy digital strategy, with the goal to transform the whole organisation in one fell swoop.
That’s not how it should work. Fast forward 18 months, and these ambitious plans will have little to show. Invariably, CIOs will have become bogged down in endless debates about how to execute the work or end up concluding the project will take too long and give up without considering the full implications to the business. There has to be a better way of delivering change through digital transformation.
Instead, start with one process, procurement purchase orders or employee expenses or invoice payments and digitise this process showing immediate benefits and achieving buy in to the digitisation strategy.
Some examples: at IFS, we removed all paper-printed payslips across 27 countries and replaced with an electronic payslip directly within the employee lobby. We removed paper supplier invoices, achieving 84% electronic invoice submission, and with an approved purchase order and three-way matching, sent this directly through to payment without any human hands being involved.
We also removed a myriad of travel platforms, some manual, and replaced them with one single online platform, an online employee mobile app, linked to corporate cards. And that resulted in automatic expense reconciliation – all in the cloud. This has removed employee administration, increased productivity, removed mundane repetitive tasks, and delivered financial benefits.
Finding a way forward
Having a cloud-based environment in place is undoubtedly a key step. Cloud matters – and businesses need to move to it because it is one of the first staging posts on the road to digitalization. From there, they can define clear roadmaps and accurate timelines that are aligned to entire business processes.
We made the decision pre-pandemic to put our payroll, ERP, content, customer surveys, contract approvals, LMS, recruitment, staff survey, ESM, marketing campaigns, travel, and more, all in the cloud. A decision which has seen all our employees globally working remotely across all our processes very successfully during the pandemic period. Understanding what parts of your infrastructure can be cloud-hosted is key.
Take the lead-to-cash process, for example: in the cloud, a business can more easily integrate different processes end-to-end quickly and efficiently: from campaign management into CRM to create the opportunity, into a sale with an order form, out into an invoice to the customer and then back in to receive the money, with online document approval and all accessible with a browser from any device at any time.
These kinds of streamlined processes help businesses achieve fast time-to-value and enhanced productivity.
Once they have a cloud-based environment in place, businesses can take that step-by-step approach to the transformation referenced earlier, with an initial focus on evergreen products and solutions, and eliminating paper. Internal stakeholders will be delighted and, as a result, buy into the wider process as further digital transformation is rolled out over time.
The boldness and confidence demonstrated by the CIO and other technology-focused C-Level directors in initiating change will have paid off and that’s a win-win for all concerned.
Sal Laher is chief digital and information officer and EVP, IFS
Main image courtesy of iStockPhoto.com