Tag: Strategy

Digital Strategy & the Board

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Digital Strategy is a plan that uses digital resources to achieve one or more objectives. With Technology changing at a very fast pace, Organisations have many digital resources to choose from.

Digital Resources can be defined as materials that have been conceived and created digitally or by converting analogue materials to a digital format for example:

  • Utilising the internet for commerce (web-shops, customer service portals, etc…)
  • Secure working for all employees from anywhere via VPN
  • Digital documents, scanning paper copies and submitting online correspondence to customers i.e. online statements and payment facilities via customer portals
  • Digital resources via Knowledge Base, Wiki, Intranet site and Websites
  • Automation – use digital solutions like robotics and AI to complete repetitive tasks more efficiently
  • Utilising social media for market awareness, customer engagement and advertising

A Digital Strategy is typically a plan that helps the business to transform it’s course of action, operations and activities into a digital nature by utilising available applicable technology.

Many directors know that digital strategies, and there related spending, can be difficult to understand. From blockchain and virtual reality to artificial intelligence, no business can afford to fall behind with the latest technological innovations that are redefining how businesses connect with their customers, employees, and myriad of other stakeholders. Read this post that covers “The Digital Transformation Necessity“…

As a Board Director what are the crucial factors that the Board should consider when building a digital strategy?

Here are five critical aspects, in more detail, and the crucial things to be conscious of when planning a digital transformation strategy as part of a board.

Stakeholders

A stakeholder, by definition, is usually an individual or a group impacted by the outcome of a project. While in previous roles you may have worked with stakeholders at senior management level, when planning a digital strategy, it’s important to remember that your stakeholders could also include customers, employees or anyone that could be affected by a new digital initiative.

Digital strategies work from the top down, if you’re looking to roll out a digital transformation project, you need to consider how it will affect every person inside or outside of your business.

Investment

Digital transformation almost always involves capital and technology-intensive investments. It is not uncommon for promising transformation projects to stall because of a lack of funds, or due to technology infrastructure that cannot cope with increased demands.

Starting a budgeting process right at the start of planning a digital transformation project is essential. This helps ensure that the scope of a project does not grow beyond the capabilities of an enterprise to fund it. A realistic budgeting and funding approach is crucial because a stalled transformation project creates disruption, confusion and brings little value to a business.

Communications

From the get-go, any digital strategy, regardless of size, should be founded on clear and constant communication between all stakeholders involved in a project. This ensures everyone is in the loop on the focus of the project, their specific roles within it, and which processes are going to change. In addition, continuous communication helps build a spirit of shared success and ensures everyone has the information they need to address any frustrations or challenges that may occur as time passes. When developing an effective communication plan, Ian’s advice is to hardly mention the word digital at all.

The best digital strategies explain what digital can do and also explain the outcomes. Successful communication around digital strategies uses language that everyone can understand, plain English, no buzzwords, no crazy acronyms and no silly speak.

Also read “Effective Leadership Communication” which covers how you can communicate effectively to ensure that everyone in the team are on the same page.

Technology

While there are many technologies currently seeing rapid growth and adoption, it doesn’t necessarily mean that you will need to implement all of them in your business. The choice of technology depends upon the process you are trying to optimise. Technology, as a matter of fact, is just a means to support your idea and the associated business processes.

People often get overwhelmed with modern technologies and try to implement all of them in their current business processes. The focus should be on finding the technologies that rightly fit your business objectives and implement them effectively.

Never assume that rolling out a piece of technology is just going to work. When embarking on a digital project, deciding what not to do is just as important as deciding what to do. Look at whether a piece of technology can actually add value to your business or if it’s just a passing trend. Each digital project should hence be presented to Board with a business case that outlines the business value, return on investment and the associated benefits and risks, for board consideration.

Measurement

No strategy is complete without a goal and a Digital Strategy is no different. To measure the effectiveness of your plan you will need to set up some key performance indicators (KPIs). These metrics will demonstrate the effectiveness of the plan and will also guide your future decision making. You will need to set up smart goals that have clear achievable figures along with a timeline. These goals will guide and optimise the entire execution of a transformation project and ensure that the team does not lose focus.

Any decent strategy should say where we are now, where we want to get to and how we’re going to get there, but also, more importantly, how are we going to monitor and track against our progress.

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An Operating Model that Delivers

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Every organisation that I have worked with around the world, whether it is in London, Johannesburg, Sydney, Singapore, Dallas, Kuala Lumpir, Las-Vegas, Nairobi or New York, there was always reference to a Target Operating Model (TOM) when business leaders spoke about business strategy and performance. Yes, the TOM – the ever eluding state of euphoria when all business operations work together in harmony to deliver the business vision…sometime in the near foreseen future.

Most business transformation programmes are focussed to deliver a target operating model – transforming the business by introducing a new way of working that better aligns the business offering with it’s customer’s changing expectation. Millions in business change budgets have been invested in TOM design projects and 1000s of people have worked in these TOM projects of which some have delivered against the promise.

With the TOM as the defined deliverable, the targeted operational state and the outcome of the business transformation programme, it is very important that the designed TOM are actually fit for purpose. The TOM also has to lend itself to be easily adjustable in order to contribute to the agility of an organisation. The way the business is operating must be able to adapt to an ever changing technology driven world and the associated workforce. The quick evolving digital world is probably the main catalyst for transformation in organisations today – read “The Digital Transformation Necessity” for further insights…

Operating Model (OM)

The Operating Model uses key inputs from the Business Model and Strategy.

The Business Model focuses on the business’ customers, the associated product and service offerings – how the organisation creates value for it’s cliental – and the commercial proposition. Within the business model the business’s revenue streams and how those are contributing to the business value chain to generate profits, are decried. In other words, the Business Model envisages the What within the organisation.

Within the Business Strategy the plan to achieve specific goals are defined, as well as the metrics required to measure how successfully these are achieved. The business goals are achieved through the daily actions as defined within the Operating Model.

Typically an Operating Model takes the What from the Business Model in conjunction with the business strategy, and defines the Why, What, How, Who and With. It is the way in which the business model and strategy is executed by conducting the day to day business operations. Execution is key as no business can be successful by just having a business strategy, the execution of the operating model delivering the business strategy is the operative ingredient of success.

In order to document and describe how an organisation functions, the Operating model usually includes business capabilities and associated processes, the products and/or services being delivered, the roles and responsibilities of people within the business and how these are organised and governed within the business, the metrics defined to manage, monitor and control the performance of the organisation and then the underpinning Technology, Information Systems and Tools the business uses in delivering it’s services and/or products.

Analogy: A good analogy to describe the Operating Model is to compare it to the engine of F1 car. In 2016 the Mercedes Silver Arrow (the fastest car, driven by Lewis Hamilton (arguably the fastest driver), did not win because of engine and reliability problems. Instead the World Championship was won by Nico Rosberg, who had a better performing engine over the whole season. Nico benefited from a better operating model – he had the processes, data, systems and the people (including himself) to win. The mechanical failures that Lewis suffered, mostly not through fault of his own, were a result of failures somewhere within his operating model.

Target Operating Model (TOM)

The Target Operating Model (TOM) is a future state version of the Operating Model. To derive the TOM, the existing Operating Model is compared with the desired future state keeping the key aspects of an operating model in mind: Why, What, How, Where, Who and With. The TOM also cover two additional key aspects: the When & Where defined within the transformation programme to evolve from current to future states.

The difference between the “as is” Operating Model and the “to be” Target Operating Model, indicates the gap that the business must bridge in the execution of its Transformation Model/Strategy – the When and Where. To achieve the Target Operating Model usually require large transformation effort, executed as change & transformation programmes and projects.

ToBe (TOM) – AsIs (OM) = Transformation Model (TM)

Why >> Business Vision & Mission

What >> Business Model (Revenue channels through Products and Services – the Value Chain)

How >> Business Values & Processes & Metrics

Who >> Roles & Responsibilities (RACI)

With >> Tools, Technology and Information

Where & When >> Transformation Model/Strategy

Defining the TOM

A methodology to compile the Target Operating Model (TOM) is summarised by the three steps shown in the diagram below:

TOM Methodology
Inputs to the methodology:

  • Business Model
  • Business Strategy
  • Current Operating Model
  • Formaly documented information, processes, resource models, strategies, statistics, metrics…
  • Information gathered through interviews, meetings, workshops…

Methodology produces TOM Outputs:

  • Business capabilities and associated processes
  • Clearly defined and monetised catalogue of the products and/or services being delivered
  • Organisation structure indicating roles and responsibilities of people within the business and how these are organised and governed
  • Metrics specifically defined to manage, monitor and control the performance of the organisation
  • Underpinning Technology, Information Systems and Tools the business uses in delivering it’s services and/or products

The outputs from this methodology covers each key aspect needed for a TOM that will deliver on the desired business outcomes. Understanding these desired outcomes and the associated goals and milestones to achieve them, is hence a fundamental prerequisite in compiling a TOM.

To Conclude

An achievable Target Operating Model, that delivers, is dependant on the execution of an overall business transformation strategy that aligns the business’ vision, mission and strategy with a future desired state in which the business should function.

Part of the TOM is this Business Transformation Model that outlines the transformation programme plan, which functionally syncs the current with the future operating states. It also outlines the execution phases required to deliver the desired outcomes, in the right place at the right time, while having the agility to continuously adapt to changes.

Only if an organisation has a strategically aligned and agile Target Operating Model in place that can achieve this, is the business in a position to successfully navigate its journey to the benefits and value growth it desires.

renierbotha Ltd has a demonstrable track record of compiling and delivering visionary Target Operating Models.

If you know that your business has to transform to stay relevant – Get in touch!

 

Originally written by Renier Botha in 2016 when, as Managing Director, he was pivotal in delivering the TOM for Systems Powering Healthcare Ltd.

NED :: Non-Executive Director’s proposition

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Are you aware of the substantive and measurable value a Non-Executive Director can bring to you and your business…?

Introduction

The Non-Executive Director, no longer a role that is associated just with large organisations. There is a growing awareness of the NED role and more and more organisations are appointing NEDs of various types, and specific specialities, often within technology and digital transformation, to enhance the effectiveness of their boards as standard practise.

With the pressure on organisations to compete globally, deal with digital transformation and respond to rapidly changing market conditions, new skills are needed at board level. This leads to the role of the NED diversifying and introduces a need to refresh the NEDs as circumstances change, bringing in new specialities, experience and challenge when the organisation needs it.

A good NED can, and should make a substantive and measurable contribution to the effectiveness of the board. Do not see a NED as a consulting advisor – a NED, within the remit of the role of a company director, play a full and active part in the success efforts of an organisation. Irrespective of the skills, experience and network contacts that NEDs will bring, they must above all, provide appropriate independent and constructive challenge to the board.

Both the organisation and the NED must understand the purpose of being a NED, within the specific organisation, for the role to be effective. This includes a clear understanding of what value the NED is expected to bring. A NED’s value goes beyond just the statutory requirements.

On appointment a Non-executive director can:

  • Broaden the horizons and experience of existing executive directors.
  • Facilitate the cross-fertilisation of ideas, particularly in terms of business strategy and planning.
  • Have a vital part to play in appraising and commenting on a company’s investment/expenditure plans.
  • Bring wisdom, perspective, contacts and credibility to your business.
  • Be the lighthouse that helps you find your way and steer clear of near and present dangers.

The role of the NED

All directors, including NEDs, are required to:

  • provide entrepreneurial leadership of the company
  • set the company’s vision, strategy and strategic objectives
  • set the company’s values and standards
  • ensure that its obligations to its shareholders and others are understood and met.

In addition, the role of the NED has the following key elements:

  • Strategy: NEDs should constructively challenge and help develop proposals on strategy.
  • Performance: NEDs should scrutinise the performance of management in meeting agreed goals and objectives and monitor the reporting of performance.
  • Risk: NEDs should satisfy themselves on the integrity of financial information and that financial controls and systems of risk management are robust and defensible.
  • People: NEDs are responsible for determining appropriate levels of remuneration of executive directors and have a prime role in appointing, and where necessary removing, executive directors, and in succession planning.

“In broad terms, the role of the NED, under the leadership of the chairman, is: to ensure that there is an effective executive team in place; to participate actively in the decision–takingprocess of the board; and to exercise appropriate oversight over execution of the agreed strategy by the executive team.”; Walker Report, 2009

 

A non-executive director will bring the follow benefits to your company:

  • strengthen the board and provide an independent viewpoint
  • contribute to the creation of a sound business plan, policy and strategy
  • review plans and budgets that will implement policy and strategy
  • be a confidential and trusted sounding board for the MD/CEO and keep the focus of the MD/CEO
  • have the experience to objectively assess the company’s overall performance
  • have the experience and confidence to stand firm when he or she believes the executive directors are acting in an inappropriate manner
  • ensure good corporate governance
  • provide outside experience of the workings of other companies and industries, and have beneficial sector contacts and experience gained in previous businesses
  • have the ability to clearly communicate with fellow directors
  • have the ability to gain the respect of the other directors
  • possess the tact and skill to work with the executive directors, providing support and encouragement where difficult decisions are being made
  • have contacts with third parties such as financial sources, grant providers and potential clients

Looking for a NED?

Now that you understand what a NED can do – What are you waiting for?

Contact Renier Botha if you are looking for an experienced director with strong technology and digital transformation skills.

Renier has demonstrable success in developing and delivering visionary business & technology strategies. His experience include Mergers & Acquisitions (M&A), major capital projects, growth, governance, compliance, risk management as well as business and organisation development. From startup to FTSE listed enterprise, the value Renier can bring as NED is substantive, driving business growth.

Top 10 Technology Trends Impacting Infrastructure & Operations for 2018

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Does your IT strategy include infrastructure, operations (I&O) practices and data center architectures that are sufficient to meet the demands of the digital business. Digital transformation requires IT agility and velocity that outstrips classical architectures and practices.

David Cappuccio, from Gartner outlines the top 10 trends that will impact IT operations (I&O) in 2018. Each will have an impact on how IT operates, plans, enhances internal skill sets, and supports the business.

 

Guest Blog: Original Article @ Gartner

Outside forces will shape IT’s journey towards a digital infrastructure.

Legacy infrastructure and operations (I&O) practices and traditional data center architectures are not sufficient to meet the demands of the digital business. Digital transformation requires IT agility and velocity that outstrips classical architectures and practices.

In 2018, IT will be increasingly tasked with supporting complex, distributed applications using new technologies that are spread across systems in multiple locations, including on-premises data centers, the public cloud and hosting providers.

David Cappuccio, vice president and distinguished analyst at Gartner, says I&O leaders should focus on 10 key technologies and trends to support digital transformation.

“These are not necessarily the top 10 technologies, or the hottest trends in IT, but rather the 10 trends we feel will have an impact on I&O teams over the next few years,” says Cappuccio. “Some are happening already, some are just beginning, but each will have an impact on how IT operates, plans, enhances internal skill sets, and supports the business.”

Strategic

Trend 1: Geo Planning
Outside factors including the European Union’s General Data Protection Regulation (GDPR), geo specific workloads and global and regional network access are driving IT to spend more time on geo planning as part of their longer term strategies. The long term objective is not to own a global infrastructure, but to build the infrastructure needed to support the business via partners, as well as leveraging an organization’s partner’s infrastructure to help support initiatives such as multiple network connections and infrastructure design and support.

Trend 2: The Intelligent Edge
Many digital business projects create data that can be processed more efficiently when the computing power is close to the thing or person generating it. Edge computing solutions address this need for localized computing power. For example, in the context of the Internet of Things (IoT), the sources of data generation are usually things with sensors or embedded devices. The intelligent edge serves as the decentralized extension of the campus networks, cellular networks, data center networks or the cloud. Organizations that have embarked on a digital business journey have realized that a more decentralized approach is required to address digital business infrastructure requirements.

Trend 3: Intent-based Networking (IBNS)
Gartner predicts that by 2020, more than 1,000 large enterprises will use intent-based networking systems in production, up from less than 50 today. Intent-based networking (IBNS) is not a product, or a market. Instead, it is a piece of networking software that helps to plan, design and implement/operate networks that can improve network availability and agility, which becomes increasingly important as organizations transition towards digital business.

With IBNS, rather than explicitly defining to the network what needs to be done, the software translates the business intent to determine the “correctness” of the network configuration before deployment. The system then continuously compares the actual and desired state of the running network.

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Gartner IT Operations Strategies & Solutions Summit 2018

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Tactical

Trend 4: APIs – Integration Economy
A digital business is supported by technology platforms in five areas: information systems; customer experience; data and analytics; IoT; and ecosystems. The ecosystems technology platform supports the creation of, and connection to, external ecosystems, marketplaces and communities. Application performance interface (API) management enables the digital platform to function.

Organizations should design APIs from the “outside in,” based on ecosystem requirements, not “inside out,” based on existing applications or technology infrastructure. “Ensure that your organization takes an ‘API first’ approach, designing APIs based on the requirements of your organization’s ecosystem,” says Cappuccio. “APIs designed in this way can be mapped to internal technology infrastructure. This approach is more effective than simply generating APIs based on existing infrastructure and data models.”

Trend 5: Reputation and Digital Experience
There are two interlinked trends impacting business today that have nothing to do with IT infrastructure, but everything to do with infrastructure design. Digital experience management (DEM) is the impact of presenting the right digital experience to customers. The experience could be mobile or web-based, and should be always available, continually improving and perform quickly and consistently. If any of these tenants are lacking, customer satisfaction is in peril. If customer satisfaction is in peril, especially in today’s social media savvy world, corporate reputation could quickly be damaged.

Trend 6: Beyond Traditional IT – New Realities
Business units are demanding agility, in opening new markets, taking on emerging competitors, bringing in new suppliers, and creating innovative ways of interacting with customers. Over 30% of current IT spend is not part of the IT budget, but overall responsibility for supporting these new initiatives, once they are tested and stabilized, will reside with traditional IT. Managing those new providers, managing workflows and managing new types of assets in this hybrid environment, regardless of where they are located, will become crucial to IT’s success.

Operational

Trend 7: DCaaS as a Strategy
In a perfect world, at least from the perspective of many business leaders, IT and the data center would be essentially a very agile provider of service outcomes, rather than the owner of the infrastructure. To do this organizations are creating a data center as a service (DCaaS) model, where the role of IT and the data center is to deliver the right service, at the right pace, from the right provider, at the right price.

“Making key short-term decisions can lead to a long-term strategy that incorporates the best of ‘as a service’ and the cloud without compromising IT’s overall goals to both protect and enable the business,” says Cappuccio. “In this manner, IT can enable the use of cloud services across the business, but with a focus on picking the right service, at the right time, from the right provider, and in such a way that underlying IT service and support does not get compromised.”

Trend 8: Cautious Cloud Adoption
For many enterprises the journey to the cloud is a slow, controlled process. Colocation and hosting providers have established private or shared clouds on their premises to provide customers some basic cloud services, enabling controlled migrations, staff skills training and a “safe” cloud environment as a stepping stone to increased cloud adoption in the future. As customers get comfortable with these services and costs, increased migrations to external providers are enabled via interconnect services. Using this partner ecosystem to enable an agile infrastructure is a rapidly emerging trend.

Trend 9: Capacity Optimization – Everywhere
Organizations need to focus on optimizing capacity and guard against stranded capacity – things that are paid for, but not really being used. This issue can be found both in existing on premise data centers and in the cloud. A change in culture is needed to fix this problem. Organizations must learn to focus not just on uptime and availability, but also on capacity, utilization and density. Doing so can extend the life of an existing data center and reduce operating expenditures from cloud providers.

Trend 10: Extended Infrastructure Management
The data center as the sole source of IT infrastructure has given way to a hybrid of on-premises, colocation, hosting, and public and private cloud solutions. These elements are being combined with a focus on providing business-enabling services and outcomes, rather than a focus on physical infrastructure. Enterprises must apply a future-looking, enterprise-wide “steady hand” to IT strategy and planning, and apply appropriate guardrails, or face the possibility of losing relevance, governance and enterprise agility.

 

The Digital Transformation Necessity

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Listening to every keynote, panel discussion or reading articles relating to business sustainability through technology, one message is repeated over and over again – Digital Transformation is imperative for all businesses!

Although this message is coming through loudly, is it not always clear to business leaders and the workforce, exactly what digital transformation really is and what it means for their organisation.

In explaining digital transformation as the benefit and value that technology can enable within the business through technology innovation including IT buzz words like: Cloud, Automation, Dev-Ops, Artificial Intelligence (AI), Machine Learning, Internet of Things (IoT), Single Sign-On, Data Mining & Big Data, Bit Chain – does not really make the need for digital transformation any clearer.

One thing is clear though – we are living in a hyper-connected world where technology and more specifically, digital devices, are the glue linking together people and information in new ways we can hardly comprehend. In this statement, is the clue of what digital transformation entails…

What is digital transformation?

We can define digital transformation as the fundamental changes in the manner in which business and organisational operations are conducted, to adapt to the changes and to leverage the opportunities, caused by the use of digital devices and their accelerated impact on the way we live.

Digital devices, operate on digital signals running through electronic circuits to collect, store, manipulate, interpret and display information. These digital electronic integrated circuits (ICs) evolved since 1947, when the functional transistor was invented, into what we know today as computers. All digital devices are, at its core, a computer of some sorts used by humans to interact with information.

Transformation on the other hand implies a fundamental change in the way things used to be (converting something from one state to another) – it enables new creativity and innovation inspired by technology evolution, bringing change that introduces a new way, a different way to do things, rather than just enhancing or improving an old or current way.

To simplify it, you could say that digital transformation is the profound changes in the way business is conducted, to adapt to the changes in society caused by the continuous evolvement of computers.

A typical example of digital transformation is the “paperless office” – fundamentally changing the way we preserve information by storing it in digital format rather than writing it down on paper. This concept has profound implications in our commerce interaction expectations if you are comparing the speed in which information can be recalled and processed through digital means vs paper files, archives and libraries…

Who should lead the Digital Transformation?

Computers are hardly breaking news anymore as it is widely used within business where technology has become an integral enabling part of any organisation. Modern digital devices i.e. tablets, smart phones, the IoT, smart watches and other smart wearable devices, are changing the way we live and interact in commerce and hence the way we, as the consumer society, expect business to be conducted. Digital transformation is thus more about the change in business operations – processes and systems – than just the adoption of new technologies. Due to the importance of technology in organisations and the key role IT plays in the organisation’s ability to adapt to the society’s changing needs, it is the role of the CIO to lead the Digitial Transformation initiatives.

Digital Transformation matters because…

Any business change is costly and businesses might avoid change, for that very reason. Howard King of The Guardian, (Nov’13) puts it this way: “Businesses don’t transform by choice because it is expensive and risky. Businesses go through transformation when they have failed to evolve.” He continues in saying that evolving businesses never necessarily need to transform as they are continually focussed on their clients. This evolution ensures the key drivers of transformation namely: changing customer demand, changing technology and changing competition, never coincide in such a way that the business operating model can no longer service it’s customers. When it does, the business reaches a tipping point that requires transformation within the business, to adapt and re-align or tip over the edge.

The pace, at which digital devices have evolved, changed the way we interact with information and has become an intrinsic and material part of daily live. This has left organisations, which did not evolve with the technology, at a tipping point. For businesses approaching or reaching this tipping point it might be too late to evolve and hence Digital Transformation becomes a necessity for survival.

Emerging, disruptive technology driven, companies are changing industries leaving competitor companies with one choice – adapt, through digital transformation, or face the consequences of slowly loosing market share and eventually…

What does a typical Digital Transformation strategy involve?

As every organisation delivers their products and services (the value proposition to it’s clients and customers) in a different way, so will the digital transformation within one company differ from the other.

To define a transformation strategy and the associate change programme, one must look at the value chain of the organisation. Each element within the value chain can, and in most cases must, contribute to the scope:

  • Infrastructure
  • People – Leadership and the overall Workforce
  • Technology
  • Supply Chain
  • Procurement
  • Operations
  • Manufacturing (Engineering)
  • Fulfillment
  • Marketing
  • Sales
  • Service Delivery
  • Business Market (Client’s & Customers)

For each of the business value chain components, one must question the impact of the key transformation drivers:

  • Change in Customer Demand
  • Change in Technology
  • Change in Competition

Understanding these impacts will outline what needs to change, which generally comes down to:

  • Transform the Customer Experience
  • Transform the Operational Processes
  • Transform the Business Model

Note that IT is not singled out in the above – this is because IT is the catalyst that should overall enable these transformation initiatives.

The following examples of Digital Transformation Frameworks can also be helpful in defining the strategy:

Change brings uncertainty… Address it!

Transformation, by definition, brings change and a typical digital transformation programme will dramatically change the organisation. This change will especially affect a key business asset within the value chain – the people working within the business – “Success?.. People come First!”.

It will also dramatically effect, if not completely change, the organisation’s culture. Culture comes from the top – make sure that the board and executives are promoting the transformation and are willing to change themselves, as change is always desired until it is required of one-self.

Empower the workforce to understand the reasons why transformation is needed. Involve everyone to actively contribute to the innovative rethinking of their roles – how does digital technologies impact their daily work experience? Articulate the core business focus (what is the value proposition to the clients and customers) and ask, how can enabling digital technologies be used in support of achieving value excellence?

Find ways to make the necessity of the change a positive win for everyone, as supporting the people through the transformation is just as important as the digital technology you are trying to embrace.

To Conclude

Digital organisations outperform organisations doing digital – making Digital Transformation the last survival action for organisations that have not evolved with digital technology.

Transformation is a dramatic change and hence must the people aspect and business culture be treated with extreme care and sensitivity. A strong CIO is needed to drive the transformation programme with full buy-in from the rest of the executives and the whole workforce.

A well executed digital transformation strategy will re-align the business with the growing digital demands of it’s customers, by addressing the needed adoption of technology innovation across the business value chain resulting in an agile business ready for a fast evolving digital future.

Let’s Talk – Are you looking to achieve your goals faster? Create better business value? Build strategies to improve growth? We can help – make contact!

IT Due Diligence – is IT an asset or liability?

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Information Technology is an integral part of any organisation and enables the operations of enterprises. Through supporting business operations, IT collates and analyses business data to provide the management information required in making timely and effective decisions. IT can even be the product/service around which enterprises are built. Information is a key business asset. But IT can also be the skeleton in the closet. Technology assets can turn into liabilities costing more and/or introducing risks that are not anticipated. This makes IT a key priority consideration in strategy development, corporate governance and business risk mitigation as well as merger and acquisition (M&A) transactions.

Despite the obvious importance of IT within any organisation, do business executives, who are mostly more focused on the financial and legal aspects, often overlook it. The appropriate attention is not given to the IT diligence as part of corporate governance or during the due diligence in M&A initiatives. This might be due to the continuous limited understanding of the technology discipline amongst business executives and/or the absence of the right expertise within an organisation to conduct the needed IT review. Another contributing statistic is that IT due diligence rarely is the make or break factor in business deals, which in a lot of cases, result in unwanted surprises presented to directors. That is why IT should be part of the scope of business strategy development and be one of the key contributors in M&A negotiations, influencing the deal and price.

The key reason for IT due diligence is to ensure visibility to the directors of concerns relating to IT operations in order to develop addressing strategies and mitigating actions. Investors should also use this information in assessing a potential business asset and it’s associated opportunity versus risk.

A due diligence exercise will cover at least the following main IT considerations: Systems, Projects & Change, Data, Security and IT Service Provision. Each of these considerations should be reviewed covering at least the following four elements: People, Process, Technology and Value.

Meaningful IT due diligence can be accomplished by practitioners who can ask the right questions stemming from the appropriate industry experience and domain knowledge. The art of due diligence is in formulating the right questions around key investment and/or corporate success drivers and interpreting the answers to inform the true state of affairs and it’s associated business enablement ability, future opportunity contributions and the associated business risk. Mostly, this diligence informs on the present and future role and influence of IT assets within the overall business success, for example:

  • Product, service and information Ownership – does the business really own what IT claims to be the property and assets of the business in relation to it’s true value and the balance sheet?
  • Reliability – can the business rely on its technology, now and in the future?
  • Sustainability – does the business have the ability to sustain its IT asset and visa versa?
  • Scalability – can the technology assets keep up with the business’ growth plans?
  • Adaptability – how easy can the technology asset integrate or be adapted to integrate with other systems and new emerging technologies in the future?
  • Compliance – does an IT asset introduce unwanted risk through non-compliance? For example, the introduction of new legislation to address the continuous increase in cyber and information security concerns might have a significant impact on the legality of an IT asset that might result in serious financial risk and penalties, if not addressed.
  • Finance – how much are IT assets likely to cost the business and what contributions will these expenses have on the financial success of the organisation?

A typical IT due diligence exercise could cover the following areas of IT operations (Some of these areas might not always be applicable in all organisations.):

  • Clarity on the Business Value Chain
  • IT Staff
    • IT Organisation Structure
    • Leadership
    • Qualifications & Skills
  • Certifications & Standards i.e. ISO9001 (Quality), ISO17001 (Security), ITIL (Service Management) or ISO20000 (ITSM)
  • Products and Services
  • Documentation
  • Software Development Processes & Methodologies
  • Service Management
  • Software applications and Services utilized
  • IT Infrastructure
    • Hardware
    • IP Network Infrastructure
    • Hosting Environments
  • Business Continuity
    • Service Availability
    • Systems Up-time
    • Backup and Recovery
    • Disaster Prevention & Recovery
  • Security
    • Cyber & Information Security
    • Network Security
    • IT Services & Systems Access
    • Physical Access
  • Governance
    • Operating Model
    • Policies
    • Procedures
    • Risk Management
    • Performance & KPIs
  • Projects & delivery methodologies
  • Compliance
  • Legal
    • SLAs
    • Supplier & 3rd party Service/Support Agreements
  • Intellectual Property
  • Quality Assurance & Improvement
  • Financial
  • Client and/or Customers

Understanding this information is vital in corporate governance, strategy formulation and capital investment decisions ensuring business critical assets are sustained and developed appropriately for a viable ongoing business concern.

The content of an IT due diligence report should focus on the objectives of the due diligence review, outlining priority findings with recommendations that present a clear call to action addressing the key issues found. A typical report should contain:

  • The objectives of the IT due diligence review
  • An executive summary with the key take aways
  • Key findings and the associated risk
  • Recommendations

The review findings and recommendations should be acted upon through appropriate remediation projects and a clear transition & support plan with inclusion into IT & business strategy. The business benefits can only be realised if these post review projects and transition, are successfully integrated into the organisation.

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