Digital capabilities are now a prerequisite to compete in the long term. Yet many companies seeking to go digital are still unclear about the best way to set up their IT organizations and develop the tools and talent required to manage digital information and establish and maintain online services and automated processes. What most don’t properly acknowledge at the outset is that many of the critical resources required to facilitate this transition will not be available in-house.
The right talent, for instance, may be in short supply. The distinctive experts required to develop successful digital offerings and channels might include product managers who are literate in cutting-edge technologies that can be used to reshape the consumer decision journey, experienced business and data analysts who can extract useful insights from customer data, and user experience experts and design-oriented content managers who can ensure that the offerings will appeal to target audiences. But technology-services companies are often better positioned to win the battle for professionals with these skills because they can offer more diverse career paths and personal development in the field.
And while in many sectors the time to go digital has come, developing the required capabilities in-house can take years. The IT department in one major travel company, for instance, recently embarked on a digitization initiative—a move prompted in part by increased competition from online players and eroding margins. The goal was to scale up quickly, but in assessing their needs, leaders realized they lacked necessary expertise in a number of critical technology areas, including user-interface design and agile software development. The company’s existing IT organization was equipped enough to manage smaller-scale digital projects but not a full-on digitization initiative. Hiring, developing, and retaining the appropriate talent would require a sustained effort.
To better compete, the travel company and others like it need to adopt a dynamic approach to accessing digital capabilities from outside the organization. In large part, this will require learning to balance the two speeds at which IT organizations must operate—integrating slowly changing legacy transactional back ends with more dynamic customer-facing front-end systems and applications. Specifically, we believe companies must take a closer look at their digitization targets, operating models, and capability-building practices in the context of this two-speed architecture. In this way, they will be able to scale up nascent digital initiatives quickly and sustainably: accelerating the use of emerging technologies, aligning the fragmented activities being pursued by individual business groups, and developing vendor relationships that can evolve with customers’ changing needs.