Written by: Teo Chin Seng
Executive Education Fellow
NUS School of Computing
The word “digitisation” is widely used and can encompass many meanings. Some view it as an advanced form of computerisation or even intelligent robots. The broad range of interpretations reflect the impact of digital technologies on many aspects of modern life, work and entertainment.
Essentially, digitisation involves the use of technology that operates with digital information composed of 1s and 0s. This enables devices, processes, and information to be used to create efficiencies, customer experiences and automation.
At the corporate and organisational levels, there are people, processes and business operations to consider. It is not as simple as upgrading to the latest model of a smartphone. There is a complex maze of factors to navigate to move your organisation from old to new.
Digital Transformation Journey
The journey of transformation should be led by a senior digital leader, such as a Chief Technology Officer (CTO). The CTO plays an important role of bringing innovations into the organisation. Innovations can create new business advantages and differentiators. Therefore, the CTO is responsible for driving innovation and transformation – the key value propositions of digitalisation in the corporate world and organisations.
Technologies are the catalyst that drive this evolution of change. The CTO is responsible for digitisation with technologies to drive organisational innovation and transformation.
With new innovation, the CTO brings the organisation from its current state to a new state. It is a journey of constant change in its people, processes and technologies. The CTO has to carefully manage these changes, taking risks into consideration.
Innovation and digital transformation are not limited to the commercial world. Other organisations, such as the public sector, not-for-profit organisations, and small and medium enterprises, are also affected by these changes, particularly for social purposes.
Innovation and Obsolescence
If a business or organisation does not innovate, digitalise and transform, it can become obsolete. The question that is commonly asked is “Why can’t we just get good ideas and innovations and just plug-in into companies?” The simple answer is that you cannot do what a startup does. A startup can have a good innovation, find some investments, and start a new company to start selling.
Startups, without a legacy, have the advantage of starting on a clean slate. They have fewer people to change, compared to large organisations which have to manage its businesses and retrain or upskill its employees. Hence the need for leadership. It is the role of the CTO to help organisations change and transform using digital technologies.
In the age of computerisation, information technology is used to automate and integrate financial, manufacturing, sales, customers, retail, logistics, and financial services. It is the role of the Chief Information Officer (CIO) to lead, implement and maintain these systems.
Naturally, for businesses and organisations, the CIO should be the digital leader. That would be true for CIO++ and this highlights that beyond technology, there are many other skills and management expertise that are required. We could ask if this means that it is a technology ++ role that the CIO should include as their responsibility. If it is a technology knowledge upgrade, the CIO would fit the role of the digital transformation leader.
Role of the CTO
The CTO is a digital transformation leader who uses technology as a basis to enable an organisation to change. It is not a project but a journey of transforming an organisation from the old to the new.
Not to oversimplify the role of a CIO, we normally justify the investment of new technology, manage the implementation, and ensure that we can maintain it well. The digital leadership role occurs before these projects and technology investments. It starts with understanding the environment, technological development, market, and industry developments to determine whether a company or organisation needs to change to keep up with these changes and remain relevant and competitive. It is strategic and it moves beyond just technology.
The CTO as the Business Transformation Chief understands the developments in the market and technology and determines which of these developments can be used to change the organisation. Unlike a startup, there are constraints on the existing organisation and its ability to change. As the organisation has ongoing businesses, the CTO needs to mitigate the risks of change. Putting these together, the CTO has the responsibility to present the value proposition for the business to implement a Digital Transformation. The CTO becomes the digital business leader.
A well thought-out digital transformation strategy has to go through the rigour of aligning or changing business or corporate strategies. It is not a paper-based exercise of a typical technology comparison, but a justification of CTO strategies against the deep expertise of other “C” levels in the organisation.
It covers other areas including human resources, manufacturing, sales and support. Each of these functions has different value propositions and the digital transformation strategy needs to provide value creation to these entrenched functions. Credibility, leadership and collaboration are key pillars to make this “C” level role of the CTO succeed.
The CTO is the moderator and integrator. When a Digital Transformation Strategy is in full motion of implementation, the organisation will undergo constant change. People will become uneasy and often have fears of the new and unknown. Not only are processes changing, but job roles and organisational structures can change. The CTO becomes the moderator who takes in the issues that appear and begins to collaborate to find solutions. Even though we group all these as change management, we have to be aware that we are changing people, processes, business models and organisations at the same time. Therefore, the role of the moderator is to find the best and optimal way to move forward and at times make compromises to take alternate paths.
The ++ list includes more, but for this article, we will pause at this point. The use of information technology has evolved from the computers which automate organisations.
CIO and CTO as Transformation Partners
Information technologies computerise existing organisations to make them more efficient and integrated. We seldom change the organisation or business models. Digital transformation can transform organisations, business models, and operation processes. These changes affect job roles and can result in skill obsolescence. Therefore, a CIO will need to upskill in order to do the additional roles of a Digital Transformation Leader.
CIOs have a strong advantage to grow into the role of CTOs as they have strong technical knowledge, organisational, governance, project management and technology vendor management skills.
Many CIOs have successfully made the change, but some are more comfortable going deeper into technology and are uncomfortable taking on the ++ responsibilities. These CIOs make excellent partners to CTOs who have strengths in the ++ areas but lack technical knowledge.
Going forward, information technologies are getting disrupted by other developments in technology. We saw how cloud technologies have moved the management of assets like data centres to cloud providers. Cloud solutions provide application solutions at lower cost and a higher level of support through the economies of scale. Application support and maintenance are slowly moving away from the IT management arena. An example is mapping software with GPS where value and functions can be realised by integrating with a player. Recent releases of Artificial Intelligence through GPT (Generative Pre-trained Transformer) is going to impact information technology in functions and roles such as software coding, IT helpdesks and the management of IT services. From the developments in this area, I can see that many of the roles and functions of the CIO organisation are changing. So, the role of the CIO could be disrupted as well.
These are the most exciting times that I have experienced in my career. I would like to see CIOs transforming themselves into digital transformation leaders. The number of innovations and disruptions using digital technology will change how we live, work, and play. Robots, autonomous vehicles, the metaverse, Artificial Intelligence, and 3D rendering and printing will challenge the current world and build an exciting future. Be a Digital Transformation Leader.