14 Jun What are the most common mistakes CEOs and IT directors make during digital business transformation?
Digital transformation can be seen as a buzzword that is often used in business discussions and business press – always in the context of creating a strategy for the company’s growth and building a competitive advantage. Digitalization of businesses is a necessary step forward. It is necessary not only to rebuild and reorganize processes in the company, but also to choose the right IT system and implement it as an IT system underpins the functioning of the entire business. Making the right choice when it comes to IT systems is not easy – the more technologically advanced and adjusted to the business profile it is, the more opportunities for growth and efficient functioning the organization will gain.
An ERP system as digital transformation tool
Often, companies decide to be a part of digital transformation when choosing to implement an ERP system – the most extensive and complex system among business software solutions. Such implementation project requires the full involvement of the CEO or IT director who will lead this project. Their primary task is to identify and address all the needs of the organization so that they are included in a comprehensive digital transformation strategy. In the context of digital transformation of an organization, in what areas do IT directors often make mistakes?
Lack of a proper reorganization strategy
First and foremost, carrying out a digital business transformation changes the entire organization and ways of working of the IT department. All processes, people and their roles, tasks and responsibilities should undergo transformation – be remodeled and restructured. Mistakes made while defining people’s needs and roles will have a huge impact on the failure of the implementation project or significantly reduce potential positive benefits.
No changes in the organizational structure
It is common knowledge that organizational silos, referring to business divisions that operate independently and do not communicate with each other, are a frequent problem in companies. During digital transformation and modern software implementation project, the possibility of breaking down silos as well as consolidating and standardizing data and processes, where required, should be explored. For example, in large and multi-branch enterprises, where IT systems and teams are dispersed or divided between groups or different departments, special attention should be paid to migration and unification. Eliminating silos can increase the efficiency of a company’s operations by up to 25%.
Workforce migration not included in the digital transformation strategy
A well-defined and executed plan to migrate employees to the future operating model of the organization is key to success of digital transformation. Without this, the effectiveness of the effort invested in carrying out the implementation will be significantly reduced. As the IT director, you need to create an effective and comprehensive plan to migrate employees to the new working model, taking into account their competencies, their new roles and the reporting area. This plan should include changes in the business management, a new organization model, training, communication and other ways to enable employees drive positive changes in the company.
Insufficient focus on business process optimization
Just as digital transformation shouldn’t be implemented without introducing IT changes, business process improvements can’t be overlooked. Requirements for technological solutions should be determined based on business processes. Information technology must be aligned with the business, not the other way around. If technological constraints start to inhibit business growth, digital transformation of a company cannot be considered a success. An excessive focus on the technology itself, its capabilities and implementation issues is the major factor hampering this approach.
Too much focus on innovation
Not all impressive and cutting-edge technology solutions can deliver real benefits for your business. For IT executives – obviously interested in industry news – it can be tempting to focus on these innovative solutions because of their newness and freshness. However, they may often overlook their business value. Therefore, attention should be paid to the real benefits that a given tool can bring to the company, rather than the innovation or modernity aspect alone.