“To improve is to change; to be perfect is to change often.” - Winston Churchill
Though Churchill apparently mentioned this quote in a political context, the wisdom of this statement underscores the intelligence of the axiom that “to lead change we must start with ourselves first.” This cannot be more relevant than to our current rapidly evolving digital and market environment, with changes accelerated by the global pandemic.
The top executives and CEOs of organizations across the globe are overwhelmed trying to cope with changing technological developments and customer expectations. They are confronted with the following questions:
- Who are our stakeholders and how do we satisfy them?
- What are our various vital functions and processes?
- How can we control all of them in a unified manner?
- How can we transform the organization in a holistic manner?
- What type of organizational structure should we have?
- From where do we begin our transformation efforts and how should we execute them?
- How do we keep transformation cost effective and keep the momentum going?
For diligent CEOs and top executives who have a clear intent of moving forward through the technological disruptions to be an industry leader, management and governance frameworks such as COBIT and ITIL can be very useful and will help them to reach the desired destination successfully.
Here are five key ways in which frameworks can help top management in their pursuit of digital transformation:
- Identifying and meeting stakeholder needs
Enterprises exist to meet stakeholders needs and create value for them. Therefore, it is very important for the top management to know who their stakeholders are, comprising customers, business partners, citizens, and to understand various demographic factors, including the market composition in which the enterprise operate. The first principle of COBIT, “Meeting stakeholders needs,” requires management to ascertain the context of key external factors like the market, the industry, geopolitics, etc., and internal factors such as the organizational culture, risk appetite etc. This is the first and most important activity management needs to undertake before embarking on a digital transformation journey.
In 2012, Procter and Gamble was already leading the industry when it decided to take things to the next level with a digital transformation, which failed, as it did not sufficiently understand what was going on in the industry and did not do a proper study of the competition and the economy. Once the stakeholders are identified and context is established, COBIT will help to create the goals cascade, which in turn will help to translate high-level enterprise goals into manageable, specific, IT-related goals that map to specific processes and practices. ITIL’s first guiding principle of the seven principles is “Focus on value,” which asserts that everything that the organization does needs to map, directly or indirectly, to value for stakeholders. - Taking a holistic approach
All functions and processes of an enterprise should be considered for digital transformation. Though it is not necessary that all legacy technologies be replaced with the latest technology, any transformation measure should be encompassing of the organization as a whole and not be an isolated measure to the IT function. Ford created a new digital service that was separate from the rest of the company instead of integrating digital solutions and thus its digital transformation efforts failed.
COBIT principles mandate covering the enterprise end-to-end to enable a holistic approach. Similarly, ITIL guiding principles call for organizations to “think and work holistically.” - Having the right organizational structure
Separating governance from management is critically important and an overarching principle that helps the organizations to navigate through tough compliance measures and maintain their value and integrity, and thereby their market leadership. The COBIT framework makes a distinction between governance and management, clearly articulating different types of activities encompassed by these two disciplines. This is crucial in the context of digital transformation because specific governance responsibilities may be delegated within certain organizational structures, particularly in larger and more complex enterprises. This division of responsibility and accountability will ensure success and certainty of results in complex digital transformations. - Initiating transformation efforts and maintaining them
ITIL’s guiding principles recommend to “start where you are.” It is not necessary to start from scratch and build something new without considering what is already available to be leveraged. It further suggests to “progress iteratively with feedback” and not to do everything at once. GE’s digital transformation efforts were undermined by trying to do too many things at a time and focusing on quantity instead of quality. This also explains why big companies often fail at innovation. COBIT provides sound advice to how to manage innovation through its management objective APO04-Managed innovation. - Optimizing resources and maintaining momentum
COBIT, through its management objectives, APO07-Managed human resources, APO09-Managed service agreements, and APO10-Managed vendors, provides great inputs for optimizing resources and maintaining a steady pace for innovation. ITIL, through its guiding principle “Optimize and Automate” and its “Continual Improvement Model,” provides practical suggestions to optimize resources and to maintain continual improvement.
Clear vision from leadership a must
Frameworks such as COBIT and ITIL can be of great help in guiding and ensuring a successful journey toward digital transformation, as well as keeping organizations relevant and successful in the evolving market landscape. However, clear management intent and strategic vision should be prerequisites before adopting any framework.
Author’s note: The views expressed in this article are the author’s and do not necessarily represent that of the organization or of the professional bodies to which he is associated.