Project to Platform: The Bridge from Vision to Execution
In previous posts, we discussed how leadership, cadence, organization, and investment affect an organization's success in the digital ecosystem. Here we'll delve into a common pattern that emerges among the most digitally sophisticated organizations: the lack of alignment between IT and the business.
We recently visited with a large telco customer, a high-end consumer goods manufacturer, and a global broadcaster. All three are investing heavily in digital transformation, and their customer-facing messaging and strategic positioning demonstrated a savvy understanding of the digital marketplace. Despite these strong signals, we detected a major organizational disconnect just below the surface: the individuals and groups involved in the digital transformation are not the same individuals or groups responsible for the day-to-day P/L of the business.
Building the unproven
Across the board, the digital teams are perceived as building toward a future business, which appears to be unproven and without revenue. They’re having a hard time “convincing” the day-to-day business leaders that their ideas are worth investing in. We commonly see this manifest in three ways.
First, digital initiatives are often rooted in IT. In many organizations IT is viewed as slow and inefficient. One senior business workshop participant stated matter-of-factly—to the nervous laughter of their fellow participants—“If IT were ranked on a scale of one to 10, (10 being best) then it would not be very close at all to 10.”
Second, once past the initial seeding phase in the innovation group or the emerging platform division within IT, the digital initiative is typically directed to find funding from operating units, with P/L and KPIs based on the existing business. The leaders of these units with “skin in the game” are being asked to bet on unproven ideas, yielding at best lackluster enthusiasm.
Finally, even in digitally advanced organizations with a strong marketing and IT vision behind the initiative, there is often a “last mile” problem where alignment does not extend all the way to the traditional, sales-driven business units in the field.
Consequently, even well-conceived, sophisticated digital transformation efforts get stuck in the mud between a few seed projects and the vision of a fully enabled digital platform.
So what to do? We see two paths that appear to work in some organizations.
The first, most proven and best path so far is a clear C-level mandate that drives the organization end-to-end, from sales to marketing to IT, and declares specific digital KPIs that provide incentive and foster alignment. This kind of leadership can provide the air cover necessary for P/L-driven business units to make the investments necessary to drive their digital transformation.
However, even in many organizations where executive support and investment is strong, the on-the-ground reality is that business level P/L holders are left to run their businesses. As long as they drive revenue, they’re forgiven for holding to targets that don’t include digital KPIs. This situation can create a stalemate.
The second path is for leaders of the digital transformation, both in marketing and in IT, not to wait for a C-level message that may be months or years away. In these cases, we advise practitioners to go back to basics and rebuild trust between IT and the business units by quickly solving real, existing problems the business unit leader has. Just do it using APIs.
In fact, every business unit leader we speak with has a list of projects that perennially fall off the prioritization list due to budget, long IT cycles, or both. The estimation process based on traditional integration and server-side solutioning results in high costs that overwhelm their benefit. Their frustration is palpable—”Why are we being asked to trust in transformation when IT cannot even deliver the most simple project?”
We advise digital initiative leaders to visit business units and review these projects, in order to find those that could become quick wins when enabled with a modern digital approach that uses apps and reusable APIs. Bundling these smaller projects around similar API and app development requirements can dramatically reduce costs. It’s a proven pattern for creating opportunities to bring the digital platform out of the lab.
At a recent API team building workshop with a multi-billion dollar media company, a member of the annual capital planning team remarked that there are “always projects requested for the same five to 10 services; let’s start there. We already know they will get funded, and we don’t have to dream up yet another project that may or not be useful.”
An enterprise’s digital vision needs to be transformative, not just iterative, if it is to leapfrog from its current business model to a digital one. So it is the digital transformation team, whether formed in IT or increasingly involving marketing, that must ensure that the selected projects build toward a platform that will meet the overarching digital transformation objectives.
image: John Picken Photography/Flickr