What CIOs Are Doing Right In Digital Transformation Initiatives

Esther Shein

Stephanie Woerner, a research scientist at the MIT Sloan Center for Information Systems Research, studies how companies manage organizational change caused by digitization. The Sloan Center has patrons and sponsors and does research on practitioner-oriented research. Currently, Woerner is studying digital investments in enterprises and how to manage those investments, as well as how digitization is influencing the next-generation enterprise and the practices of digital leaders.

Woerner is also co-author with Peter Weill, chairman of the Sloan Center, of the book What’s Your Digital Business Model: Six Questions to Help You Build the Next-Generation Enterprise. In a conversation with Enterprise Mobility Exchange, she discusses what makes digital transformations successful.   

Enterprise Mobility Exchange: What are companies doing well in their digital transformation efforts?  

Stephanie Woerner: Re-architecting modules so they can be reused to expedite innovation. Really good CIOs think about what are things we do over and over so we don’t have to do same thing again. That’s one thing that allows you to be ambidextrous: it will increase your innovation but it’s also efficient. And in the long run, it will help your data consolidation because you’re collecting data one way. It’s a pain point for CIOs — collecting data. This is one area, though, where the CIO has expertise and knows a lot about setting standards. Over time, we’re seeing that more and more companies know the value of their data by making sure the data is in good shape and having standards and making sure everyone knows what they are. 

It’s not that the data has to be in one place -- but you have to have standards, so you know you can use them to do tests and learn and create experiments. 

EME: Where are CIOs exceling?  

There are three things the top performing CIOs do. One, they’re educating the executive committee on what are the opportunities that digital and digitized gives to the company. So the CIO knows about the platform and their front-end systems and can work with the executive committee to figure out how they’re going to exploit those assets they have. The CIOs from our research spend more time with their executive committee on digital threats and opportunities. 

The second thing they do is spend more time with external customers. We see a lot more CIOs being asked by their executive team to really get out in the field and see how customers are using their product, so the CIO can bring back the voice of the customer to the firm. 

Also, there’s a big difference in terms of innovation. So the best CIOs are spending a huge amount of time thinking about their innovation: are they working with startups as business partners on experiments; are they working with the executive committee to figure out what these startups can bring; are they learning new skills? 

Lastly, top performing CIOs are working internally, too — they’re opening up their systems and figuring out how to rationalize their business processes and using those core capabilities and are service-enabling them with core APIs for internal and external customers. What we see is their APIs are used internally, especially in trying to get employees to think about new products and services, and they will use the APIs with partners. We haven’t seen too many old companies service-enabling their capabilities with APIs and then opening them up to whole universe. I would say the telecoms are doing it. 

EME: Do enough CIOs today have a seat at the executive table?  

At least among our sponsors and patrons, yes. Not just the C-suite; we’re seeing the CIO is regularly giving presentations to the board. But that’s just a sample among our sponsors and patrons. It’s going even beyond the executive committee and doing regular presentations to board. We’ve done a board study and honestly, what we have seen in last three years is the CIO is presenting to the board regularly. I wouldn’t say five years ago this was the case, but we’re seeing it across industries; that digital is so important the CIO is really working across the entire enterprise. 

See Related: CIOs Talk AI, Digital Pressures and Other Pain Points at MIT’s CIO Symposium 

EME: What do you most want people to know about state of digital transformation today?  

We know it’s going to be hard. One of the things we can take from the digital-born company is you’re probably not going to get it right the first time — you need to think about how are you measuring it, checking in and making sure you’re making the right choices, iterating and then changing. If you’re not, you’re not on the right track. CIOs and senior executives are setting the vision, but they may not get it right the first time, but that’s how things are being done in the digital economy. You need to have perseverance to keep going and you have to check in regularly, so you’re not going so far you can’t tell if you’ve made a mistake. 

For example, DBS Bank in Singapore set as a metric: how many customer hours can we save? DBS use to be a slow bank — people had to go in and wait in line and then the new CEO came in and said, ‘We’ve got to change and become more mobile focused and move away from being completely dependent on branches.’ So they started thinking about what would be a good customer-centric measure to show we’re making progress? So if you get more people using the mobile app, that’s more time saved not standing in line. Then they looked at becoming more efficient internally. That’s what companies need to do: ask ‘What’s our vision’ and a metric and then iterate, and say ‘OK, if it doesn’t work, we need to tweak it and do something different.’ It gives everyone an idea of what it means to be digitally transformed and that our customers will interact with us seamlessly and their time with us will be a good digital engagement.