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CIOs and CFOs - Are You Governing Your Digital Value Chain?

Blog Post created by info@tbmcouncil.org Employee on Oct 13, 2017

This blog was originally written by Ludvig Millfors, Partner, Strategisk IT Centigo. It was published on October 7, 2017 via the Centigo blog. You can read the original blog post here.

 

Three ingredients of the recipe for success
Most businesses and organizations we collaborate with or read about face an enormous pressure to upgrade and invest heavily in new technology. Going digital is shaping the narrative in all areas and industries including all external service providers such as consultants.
 
Although this ambition creates an at times unhealthy level of stress upon teams across the globe to deliver Digital, it also attracts a lot of new types of talent to the technology scene. By diving straight into the blue ocean and proposing fascinating ideas, the world of change leadership is flourishing. It offers fresh winds and excitement into organizations. Members or successful technology departments have gone from a support identity to a business critical and competitive advantage identity. 
 
We, at Centigo, embrace this like every other service provider. We would like to, however, take a moment of your time to highlight a few cautions and some advice that needs attention in order for your organization’s continued success in your digital endeavors. 
Management teams around the globe still have a long way to go in catching up with what really is happening in the technology space. There are still organizations out there with stated digital ambitions lacking proper technology representation in leadership meetings or at board level. This will likely change soon but one important action to lift technology on the agenda beyond ambition is to build a solid foundation for governing your technology. 
 
The technology governance scene is changing as rapidly as the evolution of the technology itself. This means you have to make sure you can find new paths to show and manage value. You have to seek and find a direction that allows you and your technology team to month over month connect multiple technology delivery chains to real value for the organization.
 
You have to converge your current services into understandable entities that alters the content of the dialogue with the rest of the leadership. You also have to provide flexibility and dynamics not just on the services themselves but, just as importantly, in the parts of your organization that are responsible for delivering technology. We like to refer to this as building a capability to governing the digital value chain.
Here are a three ingredients of the recipe for success:
 
1. Explore the power of Transparency
The most interesting way to move towards a modern digital governance model is to explore the power of transparency. Establishing a transparent value chain for technology is not as easy as you might think. In our experience, a move towards transparency will cause quite a bit of unease within a traditional IT department. We believe that it is an effect of historic difficulties in finding accurate data in a consistent way. This has led to a tradition of good enough and a continued decrease of expectation of insight into details of an IT department. 
 
Given that most organizations are looking to drive their digital transformation agenda, there will without doubt come a point where a transparent digital governance model will be inevitable. The capital expenditure levels will create anxiety. The move towards transparency will have to expose todays vulnerabilities. This can seem frightening. It will, however, also be an important step towards building the trust that a successful digitalization journey requires. 
 
2. Building leverage based on Trust
One foundational part of both building and maintaining funding for digital transformation is the capability to constantly optimize your technology value chains. Setting up an organization that constantly drive bad cost out of running your services to ensure that more funding is placed in evolving or growing the use of modern technology. It is not a one-time effort. To continually be able to show internall effectiveness in this area will build trust. Establishing this foundation and governing capability requires an investment. In times where most organizations want to just invest directly into game changing technology on the front end our advice is NOT to forget the less exiting grunt work of setting the stage. Building the solid base to enable continued growth etc.
 
3. Get the parties together in a common language
Complexity in governing technology is often directly related to the size of organizations. The more structural entrenchments one see, the more difficult it is to drive progress. When we implement modern governance capabilities to deliver on the first points above, we often find that the people we summon and  connect in workshops never have met before. If they have they hide behind the technical language and complexities that mandate their normal workday. Sometimes we find that within the same organization they will have very different definitions of practically the same objects. They account for similar things in complex variations that does not allow relativity. Even though we introduce very powerful tools to help the major progress is actually we manage to get parties to agree to definitions and paths forward. Sometimes this complicates the discussion but most of the time it creates a common, and often simpler, way to move forward to reach a unified agenda. 

These three important ingredients will make your Digital Value Chains a pleasure to govern. Without it will be equal to making a spaghetti carbonara and missing the parmigiana, black pepper and egg yolk.
 
When writing this I realize, with some dread, that this message sounds a lot like me lecturing my kids on moments before they embarked the ferry for summer camp this year. I hear the words in my head when I explain the importance of not spending all the allowance on candy. I ask them to make sure that there are some left to buy a toothpaste.
 
If you are interested in more information on how Technology Business Management (TBM) enables an organization to bend the cost curve for technology services, we want to invite you to our seminar, Oct 26. See more about it below:
 

 

We hope to see you there. Visit our webpage for more information about TBM.


If you want more of this kind of content we recommend you to subscribe to our blog too.

Yours sincerely 

 

Ludvig Millfors | Email: ludvig.millfors@centigo.se 
Partner, Strategic IT

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