Companies are increasingly launching digital initiatives to expand or build digital capabilities aimed at business efficiency or top-line revenue growth. And as digital transformation success stories emerge, the trend is gaining steam.
IDC estimates that all 40 percent of all technology spending will go toward digital transformations, with enterprises spending in excess of $2 trillion in 2019. “IT leaders who have not fundamentally changed their organizations to focus on digital will find that their business colleagues will turn to outsourcing to handle development needs,” says Joseph Pucciarelli, an IT executive adviser at IDC.
Going digital on such a broad scale requires CIOs to tackle change management and other challenges. Committing to digital often requires CIOs to partner with business peers more closely to achieve desired business outcomes — a striking change in its own right.
Indeed, a Gartner survey shows that 95 percent of 3,160 CIOs expect their jobs to change or be remixed due to digitalization . Respondents believe that the two biggest transformations in the CIO role will be the need to become a change leader , followed by increased and broader responsibilities and capabilities. Moreover, technology trends such as cybersecurity and artificial intelligence (AI) will significantly change how CIOs do their jobs in the near future.
The stakes are high. Leading digital companies generate better gross margins, better earnings and better net income than organizations in the bottom quarter of digital adopters, according to Harvard Business School. Leaders post a three-year average gross margin of 55 percent, compared to just 37 percent for digital laggards.
CIO.com checked in on digital transformations underway at some of the world’s leading brands. Following are snapshots of their digital initiatives in progress.
Armstrong World Industries
When CIO Dawn Kirchner-King joined Armstrong World Industries in 2015, IT was an order-taking organization for the 150-year-old manufacturer of ceilings. IT was also a “black-hole cost center,” in which business leaders didn’t know what they were getting for their money, Kirchner-King tells CIO.com.
Kirchner-King quickly adopted lean and agile principles espoused by Armstrong’s manufacturing teams. She convened daily stand-up meetings with IT staff and business process leaders. The meetings provided a “sense of urgency we had not had before,” and transparency for the business, who could see how their money was being spent, she says. This, in turn, made the business more comfortable in communicating their critical needs.
“With this transparency came a level of trust in what we’re doing,” Kirchner-King says.
As for the technical projects, Kirchner-King upgraded ERP financial applications to the latest version of SAP, improved and extended a Salesforce.com CRM suite to Asia and Europe and migrated travel management to Concur. Customers will also note a new website. “Agile really brought speed and urgency to those projects,” Kirchner-King says.
Kirchner-King says she re-allocated savings associated with the move to lean and agile to cybersecurity and other critical projects. IT is now exploring analytics to help Armstrong anticipate quality issues with its manufacturing processes, which generate 5,000 data points on details such as ceiling tile quality and thickness. […]