IT led but business driven
12/01/2018

Successful digital transformation is IT led but business driven

Today, every organization is going through a digital transformation process in one way or another. Some are just getting started, while others have already reached important milestones. For some companies the transformation comes quite naturally, whereas for others it takes more time to get all stakeholders aligned towards shared goals. But whether organizations start with an ‘inside out’ approach, focusing on speed, productivity and efficiency, or an ‘outside in’ approach built on customer behavior, they all encounter similar challenges; they will all need to make choices regarding processes (including improving their customer centricity), tools and their integration, platforms, organizational and cultural change, and much more. But what truly makes the difference? How can organizations really move faster along their digital transformation journey? During the latest CIOnet event, Volvo Construction, FCR Media and Randstad shared their stories. Let’s take a look at the key digital success factors of these three organizations.

Pacing and leading

The story of Volvo Construction Equipment, a manufacturer of extractors, haulers, loaders, asphalt pavers and other construction equipment, is one of continuous improvement and resilience. When Christine Billaud left her role as CIO of Volvo Construction Equipment in Asia to become Director of Business Technology, she took the lead to steer new business development based on technology –fusing business and IT within a single role, in effect. Her challenge was to find out how technology could support Volvo’s transition from merely building and selling equipment to providing fleet or site management solutions for its customers.

To achieve this transformation, the organization needed an IT architecture that could handle multiple product life cycles (from machines with an 8-year cycle to services on a 2-month to 6-month basis) and make a switch to open standards. This whole journey started in 2004 with an initial trial with connected machines. By 2009 all machines leaving the factory generated data, but it took until 2016 for Volvo to define a business model for generating revenue based on that data in the form of its first predictive maintenance platform.

The process in the years in between entailed consistently developing a new mindset, creating a dialog with IT to work towards common business goals (with lots of patience and resilience) and reshaping the IT architecture based on new value propositions for the customer. Volvo also put in place cross-functional governance and built new competences (e.g. partner management).

Digitalize or die

FCR Media’s drastic digital transformation project was nothing less than a matter of survival. FCR Media took over the almost-bankrupt Truvo, better known as the company behind the Gouden Gids (‘Yellow Pages’-style business directory), in 2016. Less than 18 months later, the company had developed a strategy built on simplicity and customer centricity. Every decision the company made had to add value for the customer. Key success factors included choosing the right partners – those with the best cultural fit with FCR Media – and taking a cross-functional approach from the beginning.

FCR Media completely rebuilt its IT organization, focusing on adding value for the customer through service and partner management, user experience, cybersecurity, end-to-end enterprise architecture, increased insights with the help of AI and substantial investment in change management and user adoption. Infrastructure and application maintenance, on the other hand, were outsourced to external partners. Today, FCR Media’s offering is 89% digital, whereas it was still 69% print-based in 2008. The IT department is now considered a partner that brings real business value to the organization through the right use of ecosystems.

Top-down catalyst

The third story was shared by Günther Ghysels, CIO of recruitment agency Randstad. To create a common understanding of – and gain insights into – the digital transformation potential, the entire management board enrolled on an intensive digital transformation course. It marked the starting point for a series of sandbox experiments that – when successful – are gradually rolled out throughout the organization internationally in line with the company’s slogan, “Think big, start small”. Once launched, every digital product is assigned a formal product manager.

According to Günther, the key success factors were:
• the board’s empowerment of the ICT organization to define the best organizational set-up for digital transformation and training on all levels, and to guide employees through the new methodologies;
• an integrated approach, both cross-functional and end-to-end;
• innovation is not about introducing gadgets, but about working hard to achieve user adoption of new technologies and new services. This can only be done through lots of communication, workshops and personalized change management.

 

These three organizations show three different ‘flavors’ of digital transformation. But what they all have in common is a firm commitment to put business value first with cross-functional teams and ICT as a trusted leader.
 

Author: Ludo Van den Kerckhove. You can connect with Ludo via LinkedIn