integrate each other’s perspectives. This will help create a sense of shared ownership of the digital transformation project and develop shared targets. Many organisations begin by expanding the remit of their existing technology functions or creating designated offices that are responsible for implementing new technology. However, this can send a message that these offices have sole ownership of the project. Other parts of the businesses may feel they can sidestep the painful process, causing the project to fail. To bridge the gap between business and technology, it is vital to accomplish two things. “Just one in every eight digital transformation initiatives meet The first is to enable business leaders to understand the benefits that digital solutions could bring. Give them the motivation and the accountability to weave technology into business practices. The second is to help technology specialists see the business benefits of digital transformation. Ensure they understand the perspectives of both internal and external customers. That way they can actively work with business leaders to drive the transformation. Both are tricky to achieve as they ask business leaders and technology specialists to operate in each their stated objectives”
other’s domains. This goes against their training, outlooks, and daily routines. We identified three fundamental strategies to accomplish this balancing act and achieve change. This is based on our experience of leading and researching digital transformation over several years. . 1 Develop your DNA. Firms should develop their in-house technology expertise rather than outsourcing most of its provision. This does not mean providing everything in-house. However, bosses should assess the balance between internal and external provision to ensure their own technology competence is not hollowed out. Extensive outsourcing could shackle firms to inflexible providers, who may not be willing to provide the necessary skills without a prohibitive price tag. It may also create a sense that real ownership of technology is not part of the business. Developing the firm’s own DNA means that technology specialists and business leaders are likely to possess the skills and the shared sense of ownership required to align technology with business strategy. For example, one key goal of NASA’s current digital transformation process is developing in-house digital capabilities that can deliver short-term benefits on particular projects, as well as helping to align operations with the organisation’s longer-term strategy and priorities. In order to embed and accelerate the process, NASA has fostered agency-wide digital transformation communities. These connect internally, as well as with external stakeholders. The agency acquires many of the engineering technologies it needs
TO THE CORE.
1. Most digital transformation projects fail to meet their stated objectives and some cause extreme costs that put the whole organisation at risk. 2. To maximise the chances of success, firms should develop their in-house technology expertise rather than outsourcing most of it. 3. Create co-ownership of these objectives across business and technology leaders and ensure they are cascaded down through the organisation. Clear goals, with quarterly reviews, and good corporate communications can help with this. 4. Invest in training programmes
that develop ambidextrous leaders who appreciate both the business and the technology needs of the organisation. I t is hard to imagine a company that has not attempted some form of digital transformation. Nine out of ten senior leaders told consultancy firm McKinsey that their firm has pursued one or more large digital transformation projects since 2020. However, most of these are dismally unsuccessful. Just one in every eight digital transformation initiatives meet their stated objectives. Worse still, some of these failed projects cause extreme cost overruns that can put the entire organisation at risk. We believe that a key barrier to successful digital transformation is the chasm that persists between business and technology. To increase the chances of success, organisations should help business and technology leaders to understand, appreciate, and
Warwick Business School | wbs.ac.uk
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