Thomas Knapp, CIO, Waterstone Mortgage Corporation
All companies in every industry are challenged to define what digital transformation means for their enterprise, and how they will respond and develop strategies for adoption. In the mortgage industry where I operate, it is all about the “digital mortgage.” With the widespread coverage and excitement about digital transformation – not to mention the appealing promotion of the benefits and need for digital transformation – who within the enterprise should take the lead for scoping new technologies and workflows and lead adoption throughout the organization?
As with all strategic initiatives, digital transformation must be driven from executive management through all functions within the organization. It is not a pure technology project, operations project, or marketing project; digital transformation must be pervasive throughout the organization, with all groups endorsing the strategy, developing an understanding of the changes required, and recognizing the myriad of opportunities digital transformation provides. In the world of digital transformation, every company is a “technology company.”
Digital transformation is a unique opportunity for Chief Information Officers (CIOs) to demonstrate their role within the enterprise. It also allows them to move to the forefront in partnering with organizational leadership and affiliating with external partners to achieve the transition supported by digital transformation. The CIO can leverage skills sets developed over the course of their careers and put their imprint on fundamental change to the organization.
What equips the CIO to take the organizational leadership needed for digital transformation? Let’s review the technical, leadership, and management skills which push the CIO to the forefront of these changes.
Executive Management Endorsement of Digital Transformation Strategic Changes
The changes within digital transformation are fundamental enough to require the unequivocal understanding and support of executive management. This requires a commitment to change and enhance delivery channels and operational processes, as well as the financial commitment to support this change. The CIO, as a member of the leadership team and with the support and understanding from departmental management, can champion the concepts and benefits, that digital transition demands and lead the organization through these changes.
Let’s face it: there are few changes that occur within an organization that do not involve the introduction of new technology.
As with all strategic initiatives, digital transformation must be driven from executive management through all functions within the organization
As stated previously, in the new world order, all companies have become technology companies. The effective CIO has mastered change management throughout his or her career and can help the organization embrace process change, while effectively transitioning systems and processes to the new reality provided by digital transformation.
Promotion of New Technology
At the essence of digital transformation is the introduction of new online technology, networks, and process automation and business intelligence/machine learning. This is all the natural realm of the CIO and the systems/technology functions directed by the CIO. Layering these components into the infrastructure and building solutions that deliver impactful and stable solutions requires an underpinning of sound technology.
Development of Partnerships
Digital transformation has encouraged entrepreneurial development of new technologies and solutions. In the financial services industry, we have seen the rise of Fintech companies and the innovative solutions they provide. The process of performing vendor management reviews and crafting appropriate partnerships is key to successful assimilation of new technologies and solutions. The risk of partnering with a company that doesn’t have sound financial backing and proven technology can sink digital transformation initiatives, if not vetted and managed appropriately.
Digital transformation initiatives often involved “proof of concepts” or “early adopter” initiatives. These can be high-risk initiatives with new partners and new products. The CIO should lead the effort to constantly review and challenge the initiative by determining the answers to the following questions:
• Is this the right strategy?
• Is this the right partner?
• Is this the right product?
• Can this initiative be successful in the timeframe(s) projected?
Digital transformation will require numerous individual projects that build upon each other– in technology, operational workflow, training, marketing, and organizational alignment. Additionally, the markets and consumers won’t wait for companies who lag behind the competition, when it comes to the introduction of new solutions. The concepts of agile development and the agile organization align strategically with the process of digital transformation. The ability to organize and deliver digital transformation solutions in a timely fashion will be essential to achieving the desired impact on the market, and will require a strong project management focus.
Security and Compliance
Digital transformation, as the name implies, is transformational in terms of work flow, technology, and delivery channels. With that upside, there are new security risks and compliance concerns. It will be paramount that, before any new solutions can be released, they must be appropriately vetted. Leadership—and, particularly the CIO—must validate that every new platform is secure, and can be trusted by consumers and channel partners.
Digital transformation within a company is exciting and promising, but it also requires leadership to ensure that their entire organization is dedicated to the implementation and success of new technology solutions. This is where the CIO plays his or her most important role: to deliver innovative and effective new technology. Overall, the CIO must play a fundamental role in championing the digital transformation opportunity, and then be instrumental in organizing the ongoing promotion and maintenance of these new solutions. For many CIOs, this can be the most rewarding and impactful opportunity of their careers.