CIOs and the Digital Transformation

Over the past few years, digital transformation and digital disruption have been widely addressed in both academic literature and business press. Still, these contributions notwithstanding, many IT executives are still struggling to find a go-to reference that would help them to orientate and fully exploit new digital opportunities through their transformational journey. This is partly due to the still limited collaboration between the two communities—academics and managers. Scholars are supposed to be focused on developing abstract models and theoretical representations of the new digital reality. Conversely, business and IT professionals seem to be primarily concerned with obtaining workable solutions to a concrete problem. In this book, we attempt to blend the two perspectives and explore new, fresh areas that are highly relevant for researchers and practitioners alike. To that end, each chapter of this book is written by scholars and co-authored with an IT executive, to bring together the rigorousness of academic research and the richness of practical experience in a single volume. This book is a collection of stories and experiences written jointly by academics and CIOs from the IT community, and is aimed particularly at managers and executives looking for inspiration to advance their digital journeys. The book opens with this introduction as an interview with Paolo Cinelli, Digital Business Manager at IKEA and one of the most influential figures in the international digital community. Paolo Cinelli talks about his experience with the digital transformation at IKEA, openly discusses the challenges he had to overcome along the way and shares his thoughts on what makes a CIO successful in today’s digital world. This original contribution covers a wide range of experiences interlacing multicultural environments and gives an interesting perspective on the definition of Digital Transformation, the needed customer journey and the various challenges that this process is facing. Confronted with the various factors related to this unavoidable and ongoing change, a resilient manager should be able to recognize and seize all opportunities that every epochal disruption ultimately presents to existing organizations.

Nowadays, it seems every company is racing to become more and more digital. But what does it really mean to “be digital”? For some, it is a matter of technology. For others, being digital is a new way to be in touch with customers. For still others, it is a completely new way of conducting business. None of these definitions is wrong per se, but each, by themselves, is only partially correct. The “digital disruption” forces us to consider not only business matters, such as methods of production, organizational operations, and money flow. The digital disruption changes every aspect of daily life for every citizen on the planet. This phenomenon might be challenging for some, such as the CIO, who were used to looking people as customers or company employees. Now, the CIO is called to equip everyone with certain tools and a habitable environment. To do so, the CIO’s role must go beyond that of service provider and impartial observer. The CIO must redefine his own professional role by drawing from his personal experiences: only by reflecting on how he himself has changed and become a more digital human being will he be able to assist others in this process.

Digital native organisations are setting new rules and expectations around Information Technology. Not only they are disrupting industries and business models, but also the IT practice itself. Their methods and standards are discontinuing older, established enterprise IT disciplines (like project management, system design, etc.). CIOs and the IT functions, in traditional organisations, are challenged daily by the increased expectations of CEOs and board members. Business leaders are accustomed to consumer technology standards, and want to innovate their business accordingly. Because of it, IT departments sometimes lag behind digital transformation programs. This chapter isolates and analyses five major changes factors impacting the IT practice: (1) Pull - driven development ; (2) Higher speed ; (3) Technology democracy ; (4) New suppliers ecosystem and (5) Social nature of digital. These elements push for new vision, behaviour and leadership from CIOs and IT professionals. They also suggest a consequent adaptation of IT practices and strategies to overcome the change. Information Technology traditionally runs enterprise resources and assets, including its wealth of data. The commitment of the IT function is mandatory for succeeding in any meaningful, long term innovation journey. This chapter offers new options and views for those CIOs and IT professionals deciding to undertake a challenging change process.

CIOs can become co-entrepreneurs in their organizations by finding novel ways of addressing critical factors of scarcity: capital, labor and trust. By using modern software technologies and protocols, such as AI, smart contracts and blockchains, CIOs can redefine the nature of these three factors to digitally transform most of the value-added processes and make them available “as-a-service” to all relevant stakeholders. Furthermore, the function of “time,” another critical factor for organizations, is also affected by the CIO’s new role: beyond the mere logic of “deadline,” time is articulated in timing (“when”), time-to (“how soon”), and committed time (“for how long”).

It is increasingly clear that Digital Transformation acts as an enabler of structural innovation of company processes and products, services and go-to-market models and that it does so through the appropriate use of new digital technologies. In this sense it appears as a contextual transformation of a company’s business strategies and technology infrastructure. CIOs are correspondingly required to transform their own role by offering themselves as leaders of Digital Transformation. However, if Digital Transformation is a great systemic project, consisting of a long process guided by a master plan, what factors should direct it if it is to succeed? And what tasks should the CIO perform to bring this process to a successful conclusion? In this context, CIOs find themselves at a crossroads requiring them to redefine their role in the immediate and medium term perspective. The results of a survey conducted in the first half of 2016 on a panel of Italian CIOs (CIO Survey 2016) provide us with an answer to these questions. Specifically, the Survey reveals 10 lessons learned that in the experience of the CIOs interviewed are key requirements for the successful completion of a Digital Transformation project.

This chapter addresses an evolution in corporate organisations that was unthinkable until recently and that represents an important opportunity for changing philosophy and practice in business. We will focus principally on the CIO (Chief Information Officer), who is at the centre of this evolution, and on the characteristics of his/her new central role not only in IT but in all aspects of business. The historical approach at the beginning of the article aims to summarize the key events and turning points in the evolution of the business organisation, which will serve as preparation for the theoretical approach of the second part. Humanistic discourse intersects with and contributes to the development of both the historical and the theoretical approach presented in this chapter. Specifically, the chapter addresses the tendency to simplify the complexity of a real world, a need that should not be completely condemned but rather reassessed for the advantages and disadvantages it brings to the corporation’s organisation. The simplification process tends to marginalize human beings and their complexity, while the new approach we propose aims to put people at the centre of the process. Choosing between complexity/complication and simplification means opting for either a traditional or an innovative approach to business and the role of IT, led by the CIO, in a company. We will analyse the impact this re-ordering may have on a company, particularly on productivity and profitability. Furthermore, we will try to understand the implications and consequences of the recent technological evolution and how to benefit from it. Among other topics, this chapter will mention the practice of collaboration among workers, the use of big data, and the “Bimodal” approach in light of new humanism. Looking at the future of companies, the authors suggest the evolution of the scientific organisation into a humanistic organisation, where new figures should guide this exciting transformation.

In the first part of the book we argued that “people-centricity” must be a priority in the redesign of processes and operating models through digital technologies. A “people-centricity” approach, guided by the future CIO, is critical when a company digitally transforms people’s daily experiences and approaches to business. In the following chapter, we present ways to leverage the human potential to structure internal relationships and manage external networks in order to drive the digital transformation. This chapter introduces the reader to the challenges posed by digital technologies as they design new relations among things, data and people. To fully exploit the digitally enabled opportunities, particularly process and business model innovation, we must consider the enabling factors such as capability design, digital innovation, environment design, internal organization design and digital IT governance.

Digital technologies are fundamentally changing the way companies operate—so much so that the notions of “digital transformation” and “digital technologies” have become nearly synonymous. Yet, there is another dimension to digital transformation—a human one—that seems to have been largely overlooked despite being of the utmost importance. Whether a company decides to shift to cloud-based software or engage in data-driven decision-making, the success of implementing the new technologies will ultimately depend on how rapidly the employees can learn to work well with them. Leading organizations are becoming increasingly aware of the fact that merely introducing new digital tools and instruments will not be sufficient for a successful digital transformation unless people inside the organization feel empowered to use them. The question then becomes: what are the core employee competences and skills that a company should nurture and develop to exploit the potential of digital technologies to the fullest? Can these competences be developed internally or should companies attract them from outside? How do companies identify employees who are willing to change and inspire others to engage with technology? In this chapter, we will shed some light on how digital technologies are reshaping work as we know it as well as look at how the Italian energy conglomerate Enel SpA is revolutionizing its approach to building the digital competences of its employees.

If we think that the digital economy is uniquely driven by technology, we risk making a big mistake; to build a real digital business we need to integrate different ingredients. This effort could require, for example, putting the customers at the center of the business with complete control over what is happening around them, integrated logistics for the products that you sell, an obsession with quality, and of course, compelling technology. Still, technology is a true element of a new digital company and, in some cases, it is where the competitiveness and the originality of the products are created. Certainly, technology cannot be effective if it is not fully integrated into all the company’s processes and its organization. It also requires adequate, flexible, and low cost Information Systems. The understanding of which type of changes should be applied to these factors is therefore a key element of any digital transformation plan in order to fuel a profitable digital business. The organizational matter also crosses another very important aspect: the scouting, farming, and transformation of the competences of the personnel involved in the new digital business. These competences include new technical skills as well as an understanding of what is needed to transform the current information systems so that they can be used to map the journey from where you are today to where you want to be in the future. In this chapter we are going to explore such questions as: The chapter will introduce the reasons behind these changes and suggestions on what can be done to deal with this complex and articulated transformational challenge.

The digital transformation is affecting numerous industries, including media, retail, automotive, transportation, and healthcare. To address the modern challenges of digital technologies, increasing customer demands, and a rapidly changing enterprise setting, CIOs and their IT organizations are required to extend their performance profile, adopting a new organizational design and a broader range of behaviors. Today, CIOs are learning that they cannot manage current strategic, operational and investment responsibilities within existing company boundaries while still ensuring stability and hard cost management. IT organizational units should move beyond their current focus on operations and systems and adopt new behaviors, to facilitate and lead new digital innovations, seize new opportunities, and raise business performance in the marketplace. CIOs recognize that they must remove historical and legacy commitments to create new connections in processes, structures and roles and to reinvigorate IT value potential in a new digital environment. They need to redesign internal organizational interactions to liberate resources, time and attention dedicated to new challenges. They also need to move beyond enterprise boundaries and navigate new ecosystems to search for innovation opportunities. This chapter presents insights on how CIOs must orchestrate innovation across functions and external networks to reinvent and structure value delivery and new business models, stimulating a wider and more productive conversation with different actors. This chapter also argues that CIOs need to combine and harmonize physical and digital, thusly breaking from traditional processes and establishing new digital methods of working.

This chapter presents how IT governance approaches are evolving to drive corporate transformation in this digital era. Today we are learning that new digital firms, embracing the digital transformation, are able to speed up and automate decision making processes, and build more agile, collaborative communities among internal resources, suppliers, customers and external experts. Consequently, the traditional view of IT governance may no longer be valid in today’s digital enterprises. The question that arises from many scholars and practitioners is: to what extent do the well-established IT governance models still apply in the digital era? And, if they no longer apply, what new models and mechanisms can be proposed to address the changing demands placed on digital companies? This chapter reveals through the case of Banca Mediolanum how the traditional “functional” separation between business and IT is insufficient to support digital transformation. Digital initiatives must be well integrated into all organisational functions, as part of a unique, digital company DNA. Indeed, “Digital” Governance plays a critical role by supporting the change of organizational behaviours, pushing down digital decision-making, activating pervasive, horizontal, and collaborative communications, and supporting a shared decision-making culture.