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How IT can play a role implementing a business transformation strategy

The challenges of a technology-based business transformation strategy aren't insurmountable, but IT and business leaders need to be on the same page for successful implementation.

When a technology-based business transformation strategy first rears its head, it's often met with skepticism at best, particularly from the IT department and developers charged with implementing the transformation. But this is where IT can come out of the shadows and become an integral part of the business transformation strategy and its success. Experts advise that, for IT, leveraging enterprise architecture, communicating with business units and examining legacy architecture are critical to overcoming technology-based business transformation strategy implementation challenges.

Technological discontinuity is the top challenge these implementations face, according to Gordon Cooper, vice president of standards and governance at New York-based insurance firm AIG. "If you look at how technology is updated in an enterprise, one of the things you're working through is matching the technology adoption curve with the technology value curve," he said. In other words, it's not that users don't want to adopt new technology, but it's the risk they have to accept by moving to new technology.

Enterprise architecture, while not a panacea, definitely provides a lot of value.
Gordon CooperAIG

That's where risk assessment as part of enterprise architecture comes in, Cooper said. Enterprise architecture allows the IT team to map specific product lines, capabilities and lifecycles of systems to pinpoint where improvements can be made. Then, the business can choose which phase of adoption it wants to be a part of and hit the sweet spot to make the most of the technology investment. "In some instances, early adoption is good; if you want to create a dominant design, you have to be ahead of that curve," Cooper advised.

Enterprise architecture also allows companies to examine the interdependencies of systems and technology being used and determine the impact of changes, including the identification of potentially broken systems. The IT department can pinpoint duplicate applications and other redundancies. Not using enterprise architecture can result in a more expensive, lengthy and painful implementation, Cooper said. "Enterprise architecture, while not a panacea, definitely provides a lot of value," he added.

IT must partner with business for implementation success

Experts can't underscore enough how important it is for the IT and business sides to be aligned, basing technology-based transformations on business outcomes. According to Stephen Lis, partner and national leader at KPMG Management Consulting, the technology is the catalyst for the transformation and not the end result.

Because the implementation involves different scenarios -- like upgrading legacy systems or adding emerging digital technologies, SaaS-based software or services, or basic technology to support specific business functions -- knowing what outcome the transformation will drive is critical, Lis said. The business basis for the technology is where the partnership between IT and end users begins, he added.

Another challenge in technology-based business transformation strategies is balancing the potential of emerging technology with the value of legacy systems. Experts advise examining existing technology to avoid throwing out the baby with the bathwater.

A technology-based transformation isn't about either-or, Lis said. "There is value to be realized in legacy systems, particularly if [the transformation is taking] a business-based approach," he said. That can mean upgrading existing systems to enhance the user experience and using emerging technology to provide a needed boost.

Krishnan Ramanujam, vice president and global head of enterprise solutions at Tata Consultancy Services, has found that while legacy applications often suit the business well, the implications of not upgrading or modernizing older applications are far reaching. "Those technology changes provide great opportunities to advance the business in ways not thought of five years ago," he said. He advised asking hard questions before declaring legacy systems off limits: Does the legacy application provide all the power that could be delivered to the business? Does it meet the needs of end users?  

The technology itself isn't the biggest challenge

However, the technology itself, and application modernization in particular, aren't the biggest challenges businesses face during a transformation. Typically, application modernization challenges center on finding the knowledge and talent to do it, particularly with outdated technology that was championed by a former employee, Ramanujam said.

Often, the challenge lies with soft skills, Ramanujam said, citing a July 2014 Forrester Research study, "Business Transformation in a Digital Age." According to the study, five out of the top six primary skill gaps faced when implementing a transformation were non-technical, soft skills -- but IT pros are well aware of this gap, he said. "Being aware of the problem is 50% of the problem solved," he added.

"There are solutions these days for all of the application modernization challenges," Ramanujam said. "While I wouldn't underestimate the challenge, I haven't run into an application modernization challenge that would make a transformation fail."

So although a technology-based business transformation will require code corrections, process mapping and enterprise architecture, the challenges aren't insurmountable, according to the experts. As long as IT pros keep the lines of communication open between the business organization, the implementation has a very good chance of gaining widespread adoption -- and thereby succeeding.

Christine Parizo is a freelance writer specializing in business and technology. She focuses on feature articles for a variety of technology and business-focused publications, as well as case studies and w3w4hite papers for business-to-business technology companies. Prior to launching her freelance career, Parizo was an Assistant News Editor for searchCRM.com.

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What has your experience been like rolling out a business transformation strategy?
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Making changes to the way a business is run when a shift in the market environment occurs can be extremely challenging. Figuring out how to cut costs and increase revenue was especially difficult because you must do both at the same time. This process often involves realigning staff and improving goals while reducing overhead costs by cutting hours or staff members altogether. The process is normally implemented over a number of years and requires a significant amount of analysis to see which new revenue methods work and, if necessary, what products or services are popular among consumers.
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