How to deliver digital transformation that actually works — 3 of 3

I apologize in advance for having illustrated these articles with three markers and a bunch of rocks. At the beach with your family, you use what you have.

This article is the third in a series of three. Feel free to read them together, separately, or skip to the TL;DR summary at the end of each.

Cost and compliance at scale

At one company I worked at, we once had a genuinely impactful role that I was lucky enough to hold for almost three years. We called it a “Product Manager,” but if you know modern frameworks, you wouldn’t recognize it. Instead of owning the user-experience or have any kind of engineering input, I owned a domain of products as part Enterprise Architect and part budget-accountable.

In other words, I didn’t just own the strategy and roadmap; I didn’t just oversee project costs; I was also accountable for the running costs and the value I’d promised to deliver. There were no easy ways out. All bucks stopped at my desk. Any misguided optimism on my part and it would land right back on my table.

It may sound terrible, but it was awesome. Working in a 40.000+ employee company, this was the first time I had a chance to build a complete end-to-end overview of my value-chain and could see the impacts up and down the line. My domain was “everything not-ERP related,” and among other things, it allowed me to build the business case for what would become the first large-scale roll-out of Office 365 in Europe.

The details of that project are for another time, but it gave me a unique insight into the challenges of retaining cost and value ownership in large organizations. Particularly in a domain where local innovation and self-governance were rampant way earlier than in other areas. Anyone who remembers the craze of self-developed Access apps will know what I mean.

Now that everyone with a company credit-card can launch a sophisticated company IT service — in about the time it takes a gourmet coffee-machine to finish a Latte and at about the same price — that problem has escalated. Not least, because that service may cost the same as a Latte to launch, but costs escalate at a rate of per-user-per-month, the service doesn’t integrate with anything else, and it typically has opaque terms of use that nobody reads.

Scale that up, and couple it with GDPR and the need to innovate, and you have an issue that can quickly undermine any digital transformation. The sheer volume of noise from competing apps, solutions, services, ideas that keep popping up throughout departments and affiliates, and the risk they entail is enough to overwhelm anyone. You get an organization that is mired in internal governance instead of transforming.

The core issue is that large organizations have big accountability-distances. There is too far between the people spending money and the people earning it. Too far between the people taking risks and the people affected by them.

Having learned from the initial Dot-com bust, modern startups are usually too small and too well managed for this to be a real issue. However, add a “digital initiative” in a multinational organization with a carte blanche to “do something,” and the risk of things escalating becomes much higher.

The key is to close the distance between cause and effect. Maybe not into one person, like we did with our custom “product manager” role, but at least enough that people start to see the potential impact of their actions.

Instead of just having employee policies, bring in tools that monitor internet-traffic and warn people if they’re doing something stupid. If that excellent free web-based Image editor they just started using, have terms-of-use that hand over IP rights for all uploaded media, give them a heads up. Don’t just rely on group-wide audits and reading the riot act.

Instead of having central license costs, start reporting them per division, per department, and maybe even per person if legal allows it. Show people and managers what they spend. Of course, you can’t do that with all IT costs or even all licenses, but that is not the point. The point is to nudge people. To show them enough that they start making smarter decisions on their own.

The ability to control cost and risk centrally went out of the window with internet-services, portable apps, and mobile app stores. You no longer have a security perimeter for your company. You have one in your data center, on personal devices, and in the minds of each employee.

To retain control of cost and risk at scale, you, therefore, need to leverage that people are by large good-intentioned. People do not want to damage their company. They are making the best decisions they can with the information they have.

Providing that information promotes better decisions and is by far the most effective way to avoid governance overload that would otherwise drown your digital transformation.

TL;DR — Cost and compliance at scale are no longer possible as strictly central activities. You need to nudge your employees by giving them the right information at the right time.

Final words

This series is not the definitive word on Digital Transformation. It is merely a primer. A few valuable lessons to show that Digital is doable at scale and even in very complex organizations. That although complex to achieve, the core tenets are not as complicated as some pundits will have us believe.

Digital transformation is here. It is happening now, and by sharing a few of the things I’ve learned dealing with it on a daily basis, I hope you may find a bit of inspiration to help you move forward faster and with a bit more peace of mind.

If not, I hope you at least liked the painted rocks I used for illustrations. They may not be pretty, but they were a lot of fun to make.

Digital innovation and transformation leader

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