The Digital Transformation Stalemate

In the close to 60 years that I have been working in and around the information technology (IT) space, we have experienced, and are continuing to experience extraordinary advances in computing power, storage and communications capabilities, and in how we interface and interact with all this. In today’s digital world, technology is no longer a “black box” – it is embedded in almost all business processes, and, increasingly, in everything that we do. However, on the value side, the picture is less clear.

Back in 1997-8, together with what was then DMR Consulting, later Fujitsu Consulting, I, along with a number of colleagues, wrote a book – The Information Paradox, which described the conflict between the widely held belief that investment in IT is a good thing, and the reality that, all too often, it’s value cannot be demonstrated. We used the analogy that the chances of success were akin to placing a bet in the “IT Casino”. The book’s main premise was that benefits do not come from technology itself, but from the business and organizational change that the technology both enables and requires if value is to be realized. Benefits do not just happen, nor do they happen according to plan – they need to be actively managed “from concept to cash”. It put forward the view that this was not a technology problem, but one that business leaders needed to own and step up to – that realizing the potential value  of their organizations use of technology should be an imperative for all Boards and Executives.

It proposed an approach, the Benefits Realization Approach, to enable them to address the challenge of value. Sadly more than 20 years since the book was published,  despite all that has been written and spoken about this challenge, and the growing number of frameworks, methodologies, techniques and tools that are available, we’re still pretty terrible at this. We still have what is predominately a “culture of delivery”  – “build it and they will come” – rather than a “culture of value”, one that focuses on creating and sustaining value from an organization’s investments and assets. The “IT Casino” has morphed into the “Digital Casino” – one in which the odds are not much better – if anything worse, and the stakes are much higher.

The fundamental reason for this is that  while the IT guys – the “techies” lap up the ever-evolving advances in the technology, and vendors and consultants make a lot of money out of it, we haven’t managed to change the culture, along with the mindsets and behaviours of the business and public sector leaders who need to “get it”. The reality is that most of these leaders still:

  1. Have a continued, often blind focus on the technology itself, rather than the change – increasingly significant and complex change – that is required if individuals, societies and organizations are to use technology in ways that can create value for them and, in the case of organizations, their stakeholders;
  2. Are unwilling to get engaged in, and take ownership of this change, including clearly defining, and accepting accountability for the expected outcomes – preferring to abdicate that accountability to the IT function who often abdicate it to their vendor and/or outsourcer;
  3. Fail to inclusively involve – at the beginning and throughout the change cycle – the stakeholders affected by the change, without whose understanding, input and “buy in” failure is pretty much a foregone conclusion.

Overall, they don’t insist on an appropriate level of rigour at the front-end of an investment decision, and don’t remain actively engaged throughout the full life-cycle of the investment decision. As a result, the potential for our use of current, evolving and new technology to create and sustain enormous value for society is huge, and still largely untapped.

Breaking this stalemate is becoming increasingly critical in the rapidly evolving digital era – and it’s going to take more than tweaking. It’s going to take fundamentally disruptive transformation – a recent survey from MIT Sloan and Cognizant reveals that the current generation of leadership in large companies, starting with the CEOs, are not well equipped to handle the disruptive transformation required – they are out of sync, out of tune, and out of touch with their workforces, markets, and competitive landscapes. The reality is that our current approach to governance, leadership and management which has been woefully ineffective in the context of traditional IT investments, is no longer “fit for purpose” in today’s rapidly evolving digital world. A world which will require a fundamental change in how we govern, lead and manage organizations.

The complexity of these challenges, and their interconnectedness across sectors make it a critical responsibility of all stakeholders of global society – governments, business, academia, and civil society – to work together to better understand the emerging trends.

However, If we are to realize this value, we cannot just sit on the sidelines and wait for  “them” to do it. As individuals, we can and must all play a leadership role as advocates in our organizations and communities to increase the awareness and understanding of the changes ahead, and to shape those changes such that they are empowering and human-centred, rather than divisive and dehumanizing. It’s not going to be easy, and it will be a long journey – one that may outlast many of us – but every journey starts with the first step, and we – all of us – must take that first step.

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