All too often there is a huge gap between what we know and what we do in practice.
This is true in the case of business transformation. We know from research and from experience that the crucial factor leading to success with IT projects is to have an explicit focus on business benefits and on realising value through business change.
I have just finished writing an academic paper with some colleagues that summarises the findings from a research project that involved looking at 25 different IT projects in large organisations in a variety of sectors around the world including oil, manufacturing, retail and public sector. The projects covered a wide range of scenarios including e-commerce, customer portals, employee purchasing and sales force automation.
We chose projects that were successful in technical terms and explored the extent to which there was a focus on business transformation and benefits realisation.
All the projects provided some sort of statement of the business problem and the goals of the project, and in a number of cases there was some awareness of the issues of business transformation. But in none of the cases were the projects run to deliver business transformation – each one was focused on the delivery of a technology solution.
The technical solutions were delivered through a customer focused, agile development process, but there was no focus on the overall business process changes, education – other than how to use the system – or the ownership and measurement of the wider business changes required to realise the benefits.
All our evidence suggests that the organisations were happy with this situation. They were very pleased just to get the IT solutions quickly and successfully delivered.
In a second sample of 20 projects we saw much the same. In this group some of the projects were seen by some stakeholders within the organisation as having a transformation focus because there was a clear business case.
But the actual project was still planned and resourced to deliver a technology solution. In other organisations, projects started off as transformation projects with a focus on benefits realisation, but as they progressed IT solution delivery took over.
In all of these cases there was a very big gap between what we know and what was done in practice. We know that business transformation requires a multi-disciplinary approach with strong business leadership and a focus on benefits realisation, but we still end up with a project team delivering technology solutions.
For many organisations this gap between what we know, and often say, and what we do in practice is a chasm and it is hard to cross. And as our research has shown, many organisations are still on the wrong side of the chasm.
For the CIO and senior IT management this is a crucial opportunity. The prize in terms of strategic influence and contribution to the organisation is great if you can genuinely make the shift from technology solution delivery to enabling and leading business transformation.
Organisations that have crossed the chasm will be competent in four key areas.
First, a portfolio management approach will be in place, which ensures broad involvement in identifying new opportunities and allows phased investment to deliver insights and build capability.
The level of investment and the approach taken to each project are matched to the contribution to the business, and investment appraisal criteria reflect the different types of projects.
Second, there is a common approach to transformation across the organisation. It addresses key aspects of the organisation including people, space, leadership, process, performance measures and enabling technology.
The foundation for this approach is a focus on benefits and the changes required to deliver them. There is also a major emphasis on developing people with transformation skills and equipping them with a practical toolkit to allow multi-disciplinary working.
The third key factor is recognition that successful completion of the project is just the start. Projects are reviewed and lessons are learnt and acted on.
Managers across the organisation give priority to realising value from improved information and exploiting the new capabilities delivered by the transformation programmes. Resources are provided to support ongoing education and continuous improvement initiatives that continue to realise further value from the technology.
The last area of competency is a flexible IT infrastructure that enables rapid delivery of new business initiatives. The facilities provide by the infrastructure are exploited by the business areas and by the transformation teams delivering new business systems and services.
The programme is not just about the IT function. The challenge for the CIO is to look across the organisation and work as a leader, facilitator and educator to help develop these organisation-wide competencies and skills.
The next steps will vary from organisation to organisation. There is no single right answer. A vital factor is to recognise that making the shift to business transformation is itself a major transformation programme and requires vision and leadership.
A starting point for many is to review recently completed projects and try to provide an opportunity to learn and improve. However, the activity needs to be carefully planned and run to avoid creating a blame game or witch hunt. This can start a process of learning and change.
A key element will then be to focus on a few pilot projects and ensure these adopt a transformation approach from beginning to end. This will provide valuable learning for a core group and for the organisation as a whole.
An education programme for key players and subsequently for the wider organisation should be established as a major element of the overall programme. We must avoid making the same mistake we do with IT projects and underestimating the importance of education.
A further important step is to review the current project portfolio while considering past, current and future projects. There will be opportunities to take action to realise greater value from completed projects and also to intervene to increase the value to be realised from current projects. This may require you to make a hard decision and terminate a project. Although this will be painful in the short term the potential benefits are high.
This is a huge opportunity for the CIO and IT management team. Plan the transformation carefully. Get good advice and then take it step by step, learning as you go.
Colin Ashurst is senior teaching fellow, programme director of the executive masters in business transformation and chief information officer at Durham Business School
Steps to transformation success
A later stage of the research included a case study at a UK local council, which adopted the following techniques for success:
- The organisation established a clear set of goals for a three-year transformation programme affecting key areas of service.
- A strong leader with experience of major transformation projects was given responsibility for the overall business transformation programme. This required a lot of time and effort, including working closely with key team members.
- There was a huge emphasis on getting the right people involved and in developing skills through education and coaching. The aim was to build a business transformation capability within the organisation.
- Broad training across all levels of managers to introduce key aspects of a framework for transformation, including an emphasis on risk management and lessons learned.
- A core transformation team with a strong mix of skills, particularly change management, and the ability to provide support and advice to the project teams.
- There was an emphasis on keeping it simple and getting the basics right.
- There was a common view of IT as an enabler of transformation and change rather than the solution in itself.
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