Making the Hard Decisions in Digital Transformation

How can an organization with decades worth of accumulated ERP customizations and configurations, IT systems and customized software applications digitally transform fast enough to keep up with the rapidly changing behaviors of digital customers? That is a hard question most organizations are wrestling with today.  Often complex custom IT environments served a purpose in a past era, but today where IT speed and agility are required, they serve as anchors restraining an organization from moving forward and digitally transforming fast enough to compete.

Like a CEO that closes down or sells a profitable business unit because it no longer fits with where the organization is going, CTOs and CIOs must rapidly shut down or replace IT systems and processes that no longer support the reality of today, or the vision of the future based on the best information available today – not yesterday. Keeping an outdated IT system or business process for the purpose of achieving a positive return on the original investment is a strategy based on pride, not logic.

We can only make decisions and act on the best information available at a given point in time.  When the future evolves in unexpected ways, we should not hold to our outdated plans and decisions based on an interpretation of the future that was not realized.  Rather, we need to recognize that our best data about today identifies a different set of needs and strategies and then we must act.  Trying to compete and win with strategies, processes and IT systems designed for a interpretation of the future that did not happen is never going to succeed.

Philosophically, we should never punish a leadership team that acted on the best information available at a point and time.  We should only punish a leadership team that doesn’t.  We need to act on new data, and reward leadership willing to do so.

If we as leaders see our organization losing ground to faster and more nimbler competitors, and unable to keep up with the fast changing needs of digital customers, then we need to be taking inventory of our systems and processes and replacing all that restrain us.

Our human resources must also change to succeed in evolving markets.  We must help our employees recognize how the labor market is changing, what skills will be more or less valuable, and help them make the transition.  We have a leadership obligation to our employees (not just to our shareholders) to operate a company that can compete globally.  We need to help our employees upgrade and become the valuable assets we need to compete.  Pining for a past age and business environment doesn’t prepare us to compete in the future, rather it guarantees we will not participate in it.

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Kevin Benedict

President, Principal Analyst, Futurist, the Center for Digital Intelligence™

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