3 tough decisions for IT leaders to achieve a successful digital transformation

The digital transformation journey for any enterprise is protracted and complex. Technology leaders often underestimate the complications associated with it. For such initiatives to conclude successfully, enterprise technology decision makers must overcome inertia, build momentum, and bring about changes across their large organizations. To bring about enterprise-wide changes, CIOs at times need to take tough decisions that may not go down well with employees.

Nonetheless, these decisions are in the interest of the organization for digital transformation to lend a much-needed competitive edge.

“The changes required for effective digital transformation are essential to create a new, advanced organization,” says Pankaj Setia, chairman of the center for digital transformation at India’s top B school, IIM Ahmedabad. “The interdependencies between digital technologies and people are very intricate and any CIO must make choices, which may include making changes to the work structures, transforming relative role hierarchies, and altering reporting structures.”

CIO.com spoke to top IT leaders about three tough decisions they had to take while digitally enabling their enterprises, and the strategies adopted to get them accepted.

Reducing technical debt

Lowering technical debt by decommissioning legacy applications ranks among the most important and toughest aspects of digital transformation as it involves mindset changes.

Jitendra Singh, CIO of J K Cement, encountered resistance when he decided to digitize the entire procurement-to-pay process. Although digitizing the process end to end would have made the system more efficient by automating its various functions, people weren’t comfortable with it as they liked doing things manually.

“A CIO must act with conviction in getting things rolled out,” says Singh, who took the hard stand of going ahead with the digitization. “People may be used to working on legacy applications and processes, but as part of digitally transforming the organization, an IT leader will have to put in place new processes and solutions that are beneficial for the company and don’t impact it in any negative way.”

To bring everyone on board, Singh leveraged empathy, an important attribute of leadership. “I am a hardcore technologist but as a leader, I also feel the pain and challenges of others,” he says.

In this case, to view the decision from a different perspective, Singh put himself in the shoes of the employees getting impacted by the move. “I allayed their fears of losing their jobs by convincing them that the new solution was an opportunity and not a threat,” he adds. “As the new solution would cut down the time taken from several days to less than one day, I showed them how it could increase their efficiency, enable them to go home early, and make the entire process transparent.”

Similarly, Kapil Pal, CTO at iEnergizer, a global BPO solutions provider, had to take some tough calls while heading IT at United Breweries (UB), one of India’s best known liquor companies. When the company was acquired by international brewer Heineken, UB had to be digitally transformed to bring it on par with the Dutch company.

“This meant that the IT infrastructure of UB had to migrate to the global platform,” says Pal. “For instance, we had to junk our homegrown HR solution to migrate to the global HR solution. This would’ve brought UB on the same page as the other 70 group companies, lending it transparency into HR policies and initiatives.  While all this made sense from an overall strategic perspective, it was a tough ask for UB as the transition from the Indian in-house developed solutions to the global ones would have raised our costs six times. This substantial and sudden increase had to be managed.”

To curtail costs, Pal froze new hiring. He also leveraged Heineken’s global contracts. “We leveraged lower cost licensing because of our global contracts,” he adds. “There wasn’t only an overall 25 to 30% reduction in the licensing cost, but an upgrade of licenses to higher levels also,” he says.

Restricting access                                                                            

There are times when IT leaders must ruffle the feathers of even SBU (Strategic Business Unit) heads in the interest of the organization. Vineet Bansal, group CIO at lighting manufacturer Surya Roshni, recalls one such tough decision he took in one of his previous organizations. “It was seen that the head of departments was sharing usernames and passwords with team members to approve important documents on their behalf,” says Bansal. “It was common in cases when the SBU heads weren’t in the office and their approvals were needed urgently. Such a practice wasn’t only risky but at times it also led to delayed responses as the responsibility lay with a third person.”

To put an end to this proxy approval process, he decided to restrict access by synching the laptops of the SBU heads with the approval process, which meant the approval would happen only through the laptop of the SBU head.

“While this wasn’t a completely fool-proof solution, it was definitely a deterrent as one could do an audit that could involve tracking the network on which the laptop was logged in at the time of the approval—the time at which the SBU head left office etc,” he says.

Bansal faced a lot of push back from the department heads, but the fact he convinced top management on the urgency of the situation made the task easy.

Transforming roles

“In addition to automating processes and restricting data access, a CIO may also have to merge job roles, or create new hierarchies and reporting relationships,” says Setia. “For example, an organization may have to merge the technology and operations teams and reorganize the reporting structures to better align the business divisions and technology leadership.”

Pal had to transform roles as part of the digital transformation initiatives at LafargeHolcim (rebranded now as Holcim Group), where he served as the head of IT service management and strategy.

“During the digital transformation, it was decided that India would lead as APAC IT hub, he says. “It was one of the toughest decisions of my career as it entailed moving all digital initiatives for all Southeast Asia and ANZ [Australia and New Zealand] to India, which meant complete SAP services, commercial applications, IT security, and infrastructure services transformation. All this was to be led by ‘Team India’ and I proudly led the initiative from India and Manila centers.”

By shifting to India, “digital transformation costs came down by almost 50%,” he says. “To move APAC IT to India from Singapore and set up L1 services in Manila wasn’t easy and I had to convince the Zurich-based organization it can all happen through India leadership.” Pal himself donned the hat of APAC IT operations head for this transformation, and worked as team player with all nationalities, convincing them this was best for their efficiency and profitability.

Given the fact all companies, irrespective of the vertical, are undertaking some form of digital transformation, it’s critical IT leaders align technology seamlessly with business objectives, even if it means making tough or unpopular decisions.

 “Effective communication, engagement, and honest yet empathetic conversations are key,” says Setia. “Through these, a CIO must explain to the concerned the significance of the change being made, the employee’s new role, and how the organization envisions the future growth of the employee. An effective digital transformation relies on a purposeful approach, making difficult decisions seem easy through a human touch.”