Alignment, agility and efficiency: new drivers in a post digital transformation world

Global CIO Institute: University of Oxford, 16 March 2023

We were honoured to speak recently at the prestigious Global CIO Institute event held at Pembroke College, University of Oxford. Brands from multiple industries came together to discuss the challenges and opportunities that exist for CIOs today in an increasingly tough and saturated commercial environment.

In CI&T's own keynote, Ross Sleight, Chief Strategy Officer for EMEA, explored how so much investment in digital transformation has failed to succeed and where leaders now need to focus their efforts to reverse the trend.  From this, and the many insightful conversations we had with attendees, we have distilled five key learnings for CIOs and technology leaders to take away.

1. In a post digital transformation world, ROI is paramount

In the past few years, businesses have spent an estimated £44 billion on Digital Transformation in the UK (source: Accenture, 2021). Much of this has gone on overhauling legacy IT systems and implementing new software platforms, cloud technologies and data capabilities, usually backed by a business case promising strong returns, improved customer satisfaction and future-proofing benefits. 

While these technologies are firmly embedded into everyday operations, the investment in them hasn’t brought wholesale commercial success to date. A Boston Consulting Group study reports that as much as 70% of digital transformation programmes have failed to meet set objectives. Specifically, 44% met between 50-100% of those objectives, while 26% achieved less than 50% of them.

We’re now in a post digital transformation world, where shareholders and boards are demanding to see returns from existing or previous investments before committing to fund new ones. Here, alignment, agility and efficiency are the new levers for successful outcomes.

2. Internal alignment enables external success

One of the reasons why digital transformation investments haven’t achieved objectives is a lack of organisational alignment which has blunted collaboration and prevented a culture of continuous improvement. In most businesses, digital isn’t actually ‘owned’ by anyone, there are lots of different departments involved with each seeing digital differently. 

To illustrate this point, if you ask a chief marketing officer and a chief technology officer what digital’s role today is in enterprise companies, you’re still likely to get different responses. Similarly, a common and disruptive misalignment is between product and tech teams disagreeing over who is responsible for what. In reality, the two areas should work hand in glove, with product focusing on what is being delivered and why, and tech focusing on how to deliver it in an agile way.

To overcome these issues, commercial, finance and technology business units must work closer together at the outset. This means agreeing holistic objectives, strategies and responsibilities across disparate teams like marketing, sales, product, customer service, IT, legal and HR. 

But alignment isn’t just about objectives and people, it’s important for processes too. Investment in multiple technologies has led to a culture of different departments deploying separate platforms and systems for common purposes,  leading to operational inconsistencies and poor data health. Streamlining and integrating technology architecture is therefore key to enabling a clear, single customer view as well as simplifying ways of working.

3. Real business agility requires a different type of mindset 

All businesses want to be more agile in how they adapt to market flux and changing customer needs. But in reality they’ve been held back from doing this by their organisational culture and how they run their digital operations. 

A traditional Project mindset is still the most common approach when developing new products or services, usually driven by lengthy requirements documentation and developed in disciplinary silos. This causes misaligned expectations, duplication of effort and unclear outcomes. In essence, limited focus is put on the important question of why consumers really need a product and more on what the business perceives as important.

A Product mindset, however, enables cross-disciplinary teams working together to focus on the ‘what’ and the ‘why’, starting with the problem the product is trying to solve rather than jumping into solutions or delivering business requirements. Teams adopting this mindset are user-first, research-led and adopt a ‘prototype - test - learn - refine’ approach. They bring continuous insight and validation to the process to ensure what is being built meets both customer and business needs. 

Operating with a Product mindset naturally lends itself to delivering outcomes in a more agile way as it creates visibility and transparency at all stages. Every couple of sprints is a chance to take stock, review the digital product road map and refocus, using learnings from the customer. In practice, for example, this could mean teams going straight to a product demo instead of spending time on business reporting. True agility means prioritising resources, time and money consistently, allowing businesses to have planning rounds of months rather than years, which mitigates risk rather than leading to wasted resources.

A few years ago, Gartner estimated that 80% of IT organisations will experience radical restructuring and mission change to embrace the Product Management operating model by 2023. While that figure might sound ambitious, there’s no denying that shifting from a Project to a Product mindset fosters the agility businesses desperately need to navigate uncertain times.

4. Efficiencies are everything

In our post digital transformation world, achieving digital efficiency is the ultimate goal, serving as a gateway to speed, scale and success. Let’s look at three areas of efficiency which can help businesses establish first-mover advantage as well as make significant productivity gains.

Resource efficiencies: 

We know that moving low value, everyday operations offshore helps to ‘keep the lights on’ at a relatively low cost. A note of caution however, as cheaper isn’t always better. In order to realise this type of efficiency you need a highly active, visible and vocal management layer. Additionally, for an offshore offering to work, there needs to be a fixed list of regular tasks to perform and repeat, rather than using this function to spot and fix problems as they arise. 

Conversely, it makes sense to run high-value, high-resource projects onshore, like NPD and proposition development. Keeping your product teams as geographically close as possible to end customers makes it easier to fix problems, understand cultural nuances and experiment. It also keeps those teams more motivated because they’re working on the more interesting, innovative areas of the business.

AI efficiencies: 

Generative AI is the biggest technology breakthrough since the dawn of the internet and its key business benefit is transforming productivity at scale. Take Microsoft 365 Copilot, the new AI “office” assistant which blends Language Learning Models (like GPT-4) with Office products, to seamlessly create everyday documents or fulfil tasks, in a fraction of the time it takes humans to. By simply entering a prompt in your own words, Copilot can write emails and presentations, schedule meetings, take notes, design workshop agendas, extract trends from raw data and lots more. 

Tools like GitHub Copilot X are also set to transform software development. Since its 2021 release, the original GitHub Copilot has made developers up to 55% faster at writing code by doing things like solving common coding problems, dealing with legacy code and producing boilerplate code. The new version X is integrated with GPT-4’s voice and chat capabilities, which will make developers even more efficient and give them a personalised workflow experience like never before.

The universal challenge for all businesses will be around how to embed Generative AI technology into existing processes.  But also to take proactive measures to ensure that these tools are being used in an ethical, responsible and compliant way.

Funding efficiencies:

In digital transformation, the ‘start-stop’ funding model, traditionally set up to coincide with the financial year, forces project teams to submit a new request for cash whenever they need to kick-off a new workstream or fix an unexpected problem. But historically, this has led to  ‘start-stop’ ways of working, which creates uncertainty, admin overheads and reduced velocity. A big issue here is around lost expertise. During these hiatuses, individuals leave projects but their knowledge ends up leaving with them too. Consequently, their eventual replacements have to build their knowledge from scratch, which affects team dynamics and delays progress.

To redress this all too common problem, modern technology leaders need to embrace a more agile and committed funding model because this will empower teams with much needed flexibility, for example, the ability to make faster resourcing decisions.  While this may be at odds with traditional procurement principles, it’s a more efficient approach, making it easier to fund the right sized teams for the right length of time so that value can be realised faster.  

5. Leadership in technology is a two-way street

CIOs are not just responsible for the overall function of technology in their organisation, they’re people leaders too. But most leaders aren’t taught leadership, they have to learn it and this is especially true in IT environments, where a positive culture of leadership can play second fiddle to the needs and complexities of a shiny new platform.

The job of a leader is to guide, not check up on their teams. In other words, stop asking for status updates but start asking how they can help unblock any barriers to progress or decision making. The CIOs we met saw leadership as fundamental to successful digital transformation, both in terms of leading upwards as well as managing downwards. They shared the following tips:

- To maintain trust, keep your promises and reward others for keeping theirs

- Be present with your teams as much as possible, especially with remote workers and make time for being together in person

- Give power and voice to diverse people. Think about diversity on the inside, as well as the outside

- Surround yourself with smarter people. There is always more to learn than teach

About CI&T

CI&T is the end-to-end digital partner to 150+ large enterprise and fast growth brands around the world. With a global presence of more than 6,900 professionals in strategy, product, research, data science, design and software engineering, we’re experts in increasing top-line growth, improving customer experience and driving operational efficiency.

Please get in touch If you’d like to see the full keynote and learn how we can help you accelerate your journey in a post digital transformation world.

Chris Sheldon, Head of Growth, EMEA
csheldon@ciandt.com

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