The inevitable truth of the digital transformation operating model

In today’s evolving scenario, emerging and digital technologies have taken centre stage in board rooms as they are expected to play a pivotal role in business strategy rather than being just the traditional back office caretaker. With digital transformation impacting almost every business function across enterprises globally, the criticality of the technology function is growing with every passing day and its effectiveness is gaining visibility, as a potent competitive tool.

Disruptive innovation in business means doing something different, smarter or better that will have positive impact in terms of business growth, customers, value, quality or productivity. Emerging technologies today are a vital cog in the wheel when it comes to evolving new business models across the process chain from digital marketing to AI (Artificial Intelligence) based customer servicing. We are already seeing technological innovation with self-driven autonomous vehicles and virtual assistants. AI today is making each experience simple and user-friendly which lays path for human-machine communication function and has become more mature and cognitive in nature. Technology based on AI today has started shaping the contours of each client business engagement making it hyper customized and meaningful, which in a way is bringing huge disruption to business models. The recent innovation around NLP (Neuro-linguistic programming) and AI platforms has led to massive scaling of digital transformation around customer personalization and enhanced user experience.

As per an industry study in 2019, 40 percent of digital transformation initiatives were based upon data and algorithm backed artificial intelligence, which was the driving force for each consumer interaction, as it made user interface more innovative and result oriented.

With digitization at the core, products and services keep on changing with new technology capabilities getting implemented at a faster pace. This change becomes quite evident with industry competitiveness being driven by data availability to decision makers anytime, anywhere. So, the role of technology becomes quite critical as it is imperative to shift gears, wear multiple hats and understand an organisation’s products, services and structure like never before.

The technology function itself needs to become digital (i.e., digital architecture, DevOps, digital roles & skills). Over and above this, the technology team needs to be cross functional in nature and should redefine their operating model by adopting a agile and DevOps methodology. Accordingly, organisations need to start preparing their IT (Information Technology) / Technology function for the digital age transformation.

Today, CIOs have a unique opportunity to transform the IT function into a digital ready business enabling organisation with capabilities across digital products and service technology. This is because they have an operating model of working in distributed agile methods across the business line and can enable in building a world class technology and engineering center of excellence, so as to establish effective steering PMO (Project Management Office) and IT governance with world class data and digital architecture.

Before setting up the house in order, few questions have to be well thought through:

• Evolve and sustain the technological capabilities to nimbly deliver digital products and services;
• Information and cybersecurity capability with risk management plan;
• Cohesive culture across digital & traditional parts of the technology organisation; and
• Operating model around digital talent and skills gap.

Lastly in the era of no code and low code platform, its high time we reduce the development complexity to be agile as per market needs. Over-engineering creates unnecessary clutter in the ecosystem. It’s natural to create systems and get emotionally attached to them but if it left unchecked it could grow like a cancer in the ecosystem leading to a detrimental impact on the performance and agility.

Overnight change of culture (operating model as well as technology) is not possible, hence it is important to gradually work through the ecosystem to keep the mothership afloat while continuing to invest in building next gen capabilities powered with cross functional skill sets.