One of the key responsibilities of today’s CIOs is to guide their company’s digital transformation: mapping strategy, aligning stakeholders, setting achievable goals with concrete timelines, and delegating responsibilities to the core. implement that transformation. Most importantly, the CIO must clearly articulate the “why” behind this transformation: what is the real motivation for why the business needs to digitally transform and, also, what value and ROI the business can expect from it.
Below I’ll outline the core skills a CIO needs to tackle this task effectively – what potential digital transformation issues a CIO should have, the role of digital transformation champion they should play for the CEO, and what “step 0” in each digital transformation project must be to succeed.
Trouble spots to keep on your radar
The four areas that can hinder your organization’s digital transformation are the same hurdles that often cause problems elsewhere.
1. Organizational change management (OCM) is ignored. This is always the first item cut from a project budget, so it’s not surprising that OCM is ultimately the leading cause of project failure. Unless you can keep stakeholders, team members, and end users all engaged throughout the transformation project and after it’s completed, you’ll never achieve your planned ROI.
2. Core definitions are misunderstood. “Digital transformation” is everyone’s favorite phrase right now, but how often do you get a group of people in a room where they all agree on what it means? Some stakeholders will say it is digitizing their products, services and platforms. Others will say it’s purely a technology game. And some will say it has to do with optimizing their back office. Without clearly defining what digital transformation means for your project and your organization, it will not be clear to anyone how you define, track and achieve success. With these definitions, everyone can be on the same page and create realistic benefit cases accordingly.
3. Innovation-killing corporate culture. The old mindset of “command and control” and prioritizing corporate and shareholder value over everything else is stifling innovation and putting you in the rearview mirror of your competitors when it should be the other way around. Just look at the growth rates of digital giants and “digital newcomers” compared to the legacy companies, and you’ll see these dynamics playing out before your eyes in real time.
4. Herding pigs. Simply screwing new, advanced technologies onto older legacy systems is like putting a Kentucky Derby hat on a pig: it’s a waste of time and money. There are too many companies trying to use AI, machine learning and blockchain (so they can say they use AI, machine learning and blocking) while simultaneously using a whole host of different ERP systems that contain bad data.
Standing up for transformation in the face of ‘horror stories’
In the SAP world, there have been some notable stories about S/4HANA implementation failures in recent years. Hershey’s SAP implementation flaw is one that is often cited as an example of software being the culprit and the system integrator as its accomplice. The reality, however, was more nuanced than that story: The Hershey incident was the result of a combination of unrealistic expectations and poor OMC. But CEOs read these horror stories and think they would be better off with any S/4HANA idea or digital transformation idea presented to them. It makes sense why they would have that gut reaction, but gut reactions about stories that went through a game of phone shouldn’t dictate your company’s digital transformation efforts.
To be at the forefront of this, the CIO must become the internal “champion” for digital transformation. What does that mean?
- Communicate that for every failure there are exponentially more successes. Be sure to cite a handful of relevant industry success stories and reference: Why they were so successful.
- Avoid ‘techspeak’. You lose the CEO’s attention almost immediately. Talk to them in their language: the benefits of digital transformation in terms of EPS, customer lifetime value, market share, revenue and revenue growth, order fulfillment and backlog. You have to make the value of transformation real to them.
- Make it clear that digital transformation is not just an IT project and not just a digital back office optimization plan. The CEO must be fully aware of digital transformation is a company-wide initiative. It’s not something you split up with one team; it requires dedication and real investment in multiple business units.
Step 0: What It Is And What It Isn’t
Deploying or migrating to SAP S/4HANA is often defined as a digital transformation initiative. But this is not the transformation itself, it lays the foundation from which your digital transformation and optimization of back and middle office processes is carried out.
This is the number 1 I want to pass on to all CIOs looking to guide their company’s digital transformation. Consider this “step 0”. If you think of digital transformation as diving, this is the “make sure your air tank is full” step. It has to happen first and foremost. If you’ve clearly defined what digital transformation is and what it isn’t, you’ll be in a better position to ultimately extract real value from it. But if you view S/4HANA migration as the endgame itself — and if you wait until the SAP 2027 deadline to talk about it with your C-level leaders — you risk turning your project into one of those horror stories. who assured you that your CEO wouldn’t happen here.