Egg Transformation

[Faustina Trafton]

Achievingchanges in the transportation system necessary to reach our goals will require fundamental transformations to our infrastructure, our technology, and our approaches to solving problems. Making our system safer and stronger, more resilient and sustainable, fairer and more equitable will require a renewed commitment to science, learning, and innovation.

What is digital transformation?

Why does digital transformation matter?

How has the COVID-19 pandemic changed digital transformation?

What does a digital transformation framework look like?

What role does culture play in digital transformation?

What drives digital transformation?

What are the key trends in digital transformation in 2022?

How can I measure ROI on digital transformation?

How can I get started on digital transformation?

Where can I learn more?

Digital transformation is imperative for all businesses, from the small to the enterprise. That message comes through loud and clear from seemingly every keynote, panel discussion, article, or study related to how businesses can remain competitive and relevant as the world becomes increasingly digital. What's not clear to many business leaders is what digital transformation means. Is it just a catchy way to say moving to the cloud? What are the specific steps we need to take? Do we need to design new jobs to help us create a framework for digital transformation, or hire a consulting service? What parts of our business strategy need to change? Is it really worth it?

This article aims to answer some of the common questions around digital transformation and provide clarity, specifically to CIOs and IT leaders, including lessons learned from your peers and digital transformation experts. Because technology plays a critical role in an organization's' ability to evolve with the market and continually increase value to customers, CIOs play a key role in digital transformation.

It's also worth noting that today's organizations are in different places on the road to digital transformation. If you are feeling stuck in your digital transformation work, you are not alone. One of the hardest questions in digital transformation is how to get over the initial humps from vision to execution. It creates angst: Many CIOs and organizations think they lag far behind their peers on transformation, when that isn't the case.

Because digital transformation will look different for every company, it can be hard to pinpoint a definition that applies to all. However, in general terms, we define digital transformation as the integration of digital technology into all areas of a business resulting in fundamental changes to how businesses operate and how they deliver value to customers. Beyond that, it's a cultural change that requires organizations to continually challenge the status quo, experiment often, and get comfortable with failure. This sometimes means walking away from long-standing business processes that companies were built upon in favor of relatively new practices that are still being defined.

Digital transformation should begin with a problem statement, a clear opportunity, or an aspirational goal, Jay Ferro, chief information & technology officer of Clario, recently explained. "The "why" of your organization's digital transformation might be around improving customer experience, reducing friction, increasing productivity, or elevating profitability, for example," Ferro notes. "Or, if it's an aspirational statement, it might revolve around becoming the absolute best to do business with, utilizing enabling digital technologies that were unavailable years ago."

[ Learn the non-negotiable skills, technologies, and processes CIOs are leaning on to build resilience and agility in this HBR Analytic Services report: Pillars of resilient digital transformation: How CIOs are driving organizational agility. ]

"Say 'digital' to one person and they think of going paperless; another might think of data analytics and artificial intelligence; another might picture Agile teams; and yet another might think of open-plan offices," she notes.

Leaders need to be fully aware of this reality as they frame conversations around digital transformation. For advice from Swift on how to speak to this topic without getting burned, read our related article, Why people love to hate digital transformation.

A business may take on digital transformation for several reasons. But by far, the most likely reason is that they have to: It's a survival issue. In the wake of the pandemic, an organization's ability to adapt quickly to supply chain disruptions, time to market pressures, and rapidly changing customer expectations has become critical.

Mark Anderson, senior director of solution architecture, Equinix, described year one of the pandemic as "a forced test of many things we had thought about but not tried." For example, he observed, "Many supply chains are not well understood and underpinned with paper. We've started looking at technologies like blockchain and IoT."

As Dion Hinchcliffe, VP and principal analyst at Constellation Research, writes: "The top IT executives in today's rapidly evolving organizations must match the pace of change, fall behind, or lead the pack. That's the existential issue at stake in today's digitally-infused times, where bold action must be actively supported by out-of-the-box experimentation and pathfinding. This must be done while managing the inexorable daily drumbeat of operational issues, service delivery, and the distracting vagaries of the unpredictable, such as a major cyberattack or information breach."

"Today, with a vast portion of the workforce now remote, employee experience of digital technology has gone from "nice to have" to "the only way work gets done. Consequently, it's getting the problem-solving focus it likely long deserved."

Although digital transformation will vary widely based on organization's specific challenges and demands, there are a few constants and common themes among existing case studies and published frameworks that all business and technology leaders should consider as they embark on digital transformation.

Rather than focusing on cost savings, IT has become the primary driver of business innovation. Embracing this shift requires everyone in the company to rethink the role and impact of IT in their day-to-day experience.

Bryson Koehler, CTO, Equifax, says, "There is a very different mindset at work when you take IT out of an operating mode of, 'Let's run a bunch of packaged solutions that we've bought and stood up' to 'Let's build and create new capabilities that didn't exist before.' If you look at the vast majority of startups, they're not starting with giant, shrink-wrapped software packages as the base of their company. If you're trying to create innovation inside of a large enterprise then you shouldn't start with that either. You're not here to run the mainframe anymore. You're not here to run the servers. You're not here to run the data center, or the network, or operations. That is table stakes. That's what you can outsource."

Although IT will play an important role in driving digital transformation strategy, the work of implementing and adapting to the massive changes that go along with digital transformation falls to everyone. For this reason, digital transformation is a people issue.

Mattel EVP and CTO Sven Gerjets says leading transformation starts with empathy. "When your empathy is genuine, you begin to build trust," he says. "If you don't have an organization that is supportive and fully onboard with the transformation efforts, it's impossible to succeed. You need to have leaders that know what "good" looks like and who are motivated to help the organization understand why you're doing what you're doing."

"This will become apparent when you hear things like, 'Hey, we're working with your team and it feels different,' or, 'We can't believe that IT delivered this project early and it met my business needs.'"

An important element of digital transformation is, of course, technology. But often, it's more about shedding outdated processes and legacy technology than it is about adopting new tech. It's also about enabling innovation.

In the area of government IT, for example, more government agencies are on the verge of realizing the cloud model's full potential - beyond cost-cutting to using cloud for strategic advantage, notes Dave Egts, chief technologist, North America Public Sector, Red Hat. "Deloitte recently released a list of nine technology trends transforming government, and one, in particular, will be key to enabling the future of technology in government: The cloud as an innovation driver," Egts says.

The prevalence of legacy technology in enterprise IT still hinders CIOs' ability to successfully embark on a digital transformation strategy. As Beth Devin, Managing Director and Head of Innovation Network & Emerging Technology, Citi Ventures has explained, legacy tech can become a costly barrier to transformation. "If you're spending 70 to 80 percent of the IT budget operating and maintaining legacy systems, there's not much left to seize new opportunities and drive the business forward. And this expenditure will grow as technology ages and becomes more susceptible," Devin notes.

[ Leading CIOs are reimagining the nature of work while strengthening organizational resilience. Learn 4 key digital transformation leadership priorities in a report from Harvard Business Review Analytic Services. ]

A critical factor driving legacy upgrades, according to a recent Deloitte survey, is technological relevance, she says. "Legacy solutions lack flexibility and carry a significant technology debt due to dated languages, databases (and) architectures," Deloitte reported. "This liability prevents many organizations from advancing and supporting analytics, real-time transactions, and a digital experience." (Read Devin's full article: Digital transformation: 9 ROI factors when upgrading legacy systems. )

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