In the modern world, the latter perspective is becoming the norm. However, many organisations face challenges to transform their IT department into a business enabler and an innovation centre that can help them gain a competitive advantage, enter new markets or strengthen the organisation’s relationships with customers.
Transforming IT into a business enabler is a complex task with lots of moving parts, but at its core, there are three fundamental focus areas.
The transformation of IT processes as a business enabler is a multi-step activity that requires support from the management stakeholders, input from different business functions, planning, preparation and phased implementation. The main objective of this activity should be to create synergy between IT and other business functions, resulting in value generation for the business.
The key steps in the IT transformation process are:
- Collaborating with business functions to identify and pursue opportunities for improving the performance of business processes. This involves defining the goals and strategies for IT function based on business goals and objectives and aligning operational processes with goals.
- Implementing KPIs and metrics to monitor and gauge progress. It is also important to analyse and adjust KPIs periodically to ensure alignment with business objectives.
- Defining frameworks, standards and controls for business process design while respecting security requirements, compliance with regulations and corporate direction.
Optimising operational costs and resources
The optimisation of operational costs and resources requires multiple initiatives across different areas.
Such initiatives should be performed with strategic direction in mind to ensure that any optimisation activity compliments business goals and results in increased business efficiency and generates value for the business, whilst also freeing up the budget and resources required for innovation and investment in future opportunities.
The key steps for strategic IT cost optimisation in a structured and targeted way are:
- Reducing IT costs by prioritising the spend
- Optimising by removing waste and introducing lean processes to increase efficiency
- Rationalising the IT portfolio by aligning IT initiatives with business objectives and priorities
- Transforming by investing in innovation and initiatives to achieve business efficiency
Managing legacy applications
It is very common for organisations to accumulate a portfolio of legacy applications over the years, and dependency on these applications becomes a challenge for transformation and agility. Many such applications lack up-to-date documentation, are dependent on obsolete and deprecated technologies, and encapsulate complex business rules buried under millions of lines of code. This results in a chain of dependencies from business to applications that finally terminates on a specific person.
Legacy applications not only pose a challenge to the transformation process but also become business risks from a security, compliance and scalability perspective. Moving away from legacy applications requires proper planning and a structured approach.
Salling Group, Denmark’s largest retailer, with 50,000 employees in 1,500 stores across Denmark, Sweden, Poland and Germany, wanted to create a frictionless digital experience for their customers. The company started the internal digital transformation process – the development of new technical and commercial systems – empowering their employees to perform their duties more efficiently. Salling Group also decided to develop a new promotional planning tool to replace legacy systems that had become inefficient over the previous 10 to 15 years.
In 2009, Salling Group approached Ciklum as their technology partner of choice to support their digital ambitions. A fully planned and structured approach was established to maintain the company’s ongoing operations and simultaneously implement innovations more quickly:
- Create an inventory of legacy applications
- Develop interdependency and business dependency maps
- Create a modernisation or replacement strategy
- Prioritise actions based on business direction and risk profile
During the ten-year transformation, along with new fully-fledged solutions, the Ciklum team has developed a range of small applications for existing systems used by Salling Group. The Ciklum team is quickly acquiring new technologies and exploring new tools together with the client.
Salling Group has increased revenue, with new eCommerce applications to boost online sales. The company has also streamlined business operations and increased employee retention with apps developed for internal use.
Transforming IT into a business enabler is a challenging task that requires a well-defined strategy, a comprehensive plan, a structured approach and a business goal-centric focus for successful execution. Support from company management and business stakeholders is also fundamental. It is important to partner with a competent technology team that can drive transformation initiatives with the focus and agility required to adapt to evolving business needs. A cross-functional team with a change management champion, technical engineers, user experience specialists, business experts and quality assurance professionals is pivotal to the success of the IT transformation initiative.
In modern times, the transformation of IT from a cost centre to a business enabler is fundamental to the survival and success of an organisation. There are many moving parts and complexities associated with the transformation process, and it is important for all stakeholders to understand that such transformation is an evolving process and that it cannot be completed overnight. Salling Group started their digital transformation journey over 10 years ago and the process is still ongoing. Over the years, by transforming IT into a business enabler the company has strengthened its position as a leading retail company in Scandinavia. IT transformation is a long journey that requires a focused approach and proper planning for each step, but in the end, it’s worth the effort.