Open any industry or professional publication and you will see a large number of articles promoting the value of digital transformation. Proponents argue that these new capabilities are what companies must possess or else they will perish. “All companies must become technology companies” is the most common refrain. “Companies that accelerate smart decision-making will survive, and those that fail to do so will be obsolete” is another common refrain.
I’m one of those people who is excited about this information. I see huge potential for new digital capabilities to improve business performance, create better jobs, and solve long-standing problems that cannot be solved with current approaches.
Of course, adapting and changing remains a challenge for most businesses. All change, even the smallest one, is based on trust. As George Shultz, who served as Secretary of State during the Reagan administration, said in his later years, “You cannot stand without your faith.” If people in a room trust each other, he writes, good things will happen. Without trust, nothing good can happen.
The problem is that often the business just doesn’t trust IT. Unless this problem is solved, important initiatives related to digital transformation will be put on hold.
When I was new to trust issues a few years ago, I was a little embarrassed to ask people for their opinions. I was particularly surprised when I discovered that many business people are disgusted with the IT department. I hear comments like, “We can’t trust them on important matters” or “They are the most disliked group in our company.” Even in the early months of the pandemic—as IT teams scrambled to launch conference calls, online ordering and other innovations to keep the company afloat—these negative comments persisted. (The good thing is that individual IT team members often receive favorable reviews, even though these reviews tend to disparage the entire technology department.)
Why is trust so low? I found a diagram from John Roberts’s 2004 classic The Modern Firm (see sidebar “The Journey of a Successful Project”) useful for understanding why business leaders and IT professionals It helps that the distrust has been growing.
A business (or department, or team) should start from step one by clarifying the vision—strategy—and business goals they want to achieve. It makes sense: you have to know where you’re going before you start taking action. Next, in the second step, participants should outline the organizational capabilities required to pursue such a strategy, including people, structure, culture, and management procedures. In the third step, leaders should define all the processes and data required for this effort. Finally, in step four, they should apply the required technologies to scale up and reduce unit costs.
Most of the problems I’ve seen and the resulting crisis of trust are because the first few steps were not done well, either in reverse order, or because the work distribution was confusing.
The root of the problem is often in the first step, where the business objectives are not clear. “Executives need to address two questions up front,” said consultant Bob Palermo, a former vice president at Shell. “Do they want to use standard processes or do they want to use each business unit? Can they choose the process that suits them? Do they want to tightly integrate different functions, or do they want to let each department make their own decisions?” If these two problems are not solved, different business units will rush to find solutions that meet their specific needs. technical solutions, which means that the degree of standardization and integration is lower than what is actually required. The result is “no communication between systems” and then people blame the IT department.
Problems often arise in the third step, because IT often has to define the processes and data required for the work. This actually belongs to the functions of the company’s business department and goes beyond the professional scope of IT. It’s hard for IT teams to say no to these tasks, but it’s also hard for them to produce good results. Many things can go wrong, including automating poorly defined processes, reusing cluttered data, and data not fully integrated with project needs.
Expecting IT to define processes, clean up data created by others, or understand in detail how to fully integrate data across platforms and databases is unfair, unreasonable and unwise. However, IT departments are often blamed for failing to do this important step, with negative consequences. From this distrust arises.
Overhyping the ease of digital transformation exacerbates these problems. The reality is that digital transformation requires a difficult combination of change management, process, data and technology capabilities.
Problems sometimes arise when proponents of a new technology rush to reverse engineer the process, that is, start with the technology (step 4) and then work backwards to the strategy. This kind of reasoning is probably a reference to the theme of Kevin Costner’s movie “Field of Dreams”, “If we do this, it will happen.” But blind optimism can be achieved in movies, but it is difficult in reality.
New technologies can certainly bring about disruptive changes. But even the most disruptive new technologies rarely skip these steps. Blockchain, which has become very popular in recent years, is a good example. University of Arkansas professors Mary Lacity and Remko Van Hoek conducted in-depth research and found that those who succeeded in technology were business-led and focused. Focus on the specific problem (step 1), bring together a wide range of actors (step 2), and solve the data problem (step 3).
How to build trust
Building trust doesn’t happen overnight, but there are certainly things company leaders can do to help teams respect each other’s abilities and work together more effectively. Four methods are introduced below.
Unreasonable expectations to view the relationship between IT and the business as that of a supplier and customer can lead to failure and mistrust. The first step to breaking this vicious cycle is to better define the roles of both parties. I think the best model is that the IT department acts as a supplier and the business department acts as a customer.
Each department should honestly evaluate its own performance—because in most cases, both parties need to make improvements. Business units must become better customers, and that means doing their part in steps one, two, and three. Specifically, business departments must provide clearer direction, allocate personnel to various parts of the work more reasonably, put forward more accurate requirements, and set reasonable expectations with the IT department.
For IT, it’s about acting like an experienced vendor and better understanding business issues, from cost overruns to delivery delays to lack of responsiveness. When the required effective information is insufficient (from step one to step three), the IT department must also learn to push the problem back. For example, salespeople may not understand what an “explicit requirement” is.
Find common ground in data Both IT and the business know data is important, but each believes the other must take the lead. On reflection, most people realize that the business should define and create the majority of the data (part of step three) and have primary responsibility. But this has a limited scope. For example, business people are often poorly prepared when creating logical data models to define databases. There has to be a lot of open discussion on both sides when it comes to issues like who is responsible for quality, security, metadata, a common language, data architecture and storage.
This piece of advice is the simplest and possibly the most profound. I call it “let’s have a meal together.” The reality is that people work more effectively together when they know something about each other’s backgrounds, families, and interests. People at all levels in the business and IT departments need to take the time to get to know each other.
Start with the Basics and Keep Improving Only when trust between business leaders and their IT colleagues increases can they begin to tackle harder problems and bigger opportunities. Because the customer-supplier model has limitations. For example, most people know that “ensuring communication between systems” and “lowering technical debt” are good concepts that make it easier to communicate between different departments and reduce costs. And sooner or later, companies will take steps to make these concepts a reality. But companies need to wait to address these issues until trust in the IT department has increased, which can align interests between departments, bring together the teams that need to get the work done, and ensure long-term commitment.
Don’t expect miracles when it comes to building and strengthening trust. A lack of trust can have long-term consequences for your organization. It doesn’t do anyone any good. This is an important question to address if your organization wants to successfully complete digital transformation. The relationship between IT and business units is important, and investing in it is well worth it.