IT transformation

IT transformation is a complete reassessment and overhaul of an organization's IT systems to improve the efficiency and delivery in a digital economy.

IT transformation forms the foundation of an organization's larger digital transformation strategy and is led by business leaders, such as the CIO. The process can involve changes to and modernization of network architecture, hardware, software, IT service management, and data storage and access.

Informally, IT transformation might be referred to as "rip and replace."

Purpose of an IT transformation

Organizations must take steps to keep pace with an increasingly digital and competitive market by not only optimizing existing systems but also creating and acquiring new applications and services that generate deeper insights into their business, industry and customers.

Many times, IT transformation aims to change the IT department from being a reactive, inflexible organization to being a proactive, flexible part of the business that can respond quickly to changing digital business requirements and make more informed decisions.

According to Deloitte, the goal of these efforts is to "reimagine IT development, delivery, and operating models, and to enhance IT's ability to collaborate effectively within the enterprise and beyond its traditional boundaries."

Benefits of an IT transformation

Successful IT transformation builds a solid foundational infrastructure to deliver automated services, cloud computing and new operating models. It also automates and accelerates the deployment of IT services and reduces risk during deployments.

IT transformation clears the path to delivering IT as a service that is more cost-effective, agile and helps foster innovation. By optimizing traditional IT cost models, organizations free up IT budget from operational expenses and can designate more funds for digital transformation.

IT transformation also ensures better business-IT alignment.

Digital transformation benefits that business leaders should understand

Key steps for an IT transformation

Any IT transformation needs an effective strategy. It starts with developing a clear, coherent vision of the future state of IT and the business case for transforming IT. That vision must be developed with the input and sponsorship of senior management.

Business and IT leaders also must define the foundational needs, scope and scale of the IT transformation project through project planning, including having a clear timeline.

It's also important for organizations to define their approach to partnering and vendor management and have a person or team responsible for analyzing vendor and partner performance and suitability.

Implementation methods are equally important, including proof-of-concept exercises, pilots and methods for quickly testing new technologies and their influence on business process.

According to Dell EMC, an IT transformation strategy must include the following three important steps, regardless of industry and IT maturity of the organization:

  1. Modernize existing, critical IT infrastructure to improve efficiency in terms of both operational expense and management overhead.
  2. Automate IT processes to reduce risk and accelerate the provisioning and deployment of applications. This includes automating the delivery and consumption of IT services.
  3. Transform IT processes and operations to increase agility and align IT goals, staff and roles as much as possible.

Challenges of an IT transformation

Many organizations were not born in the digital age, which means they're not afforded as much freedom to rip and replace all existing IT systems swiftly and completely.

These organizations must grapple with legacy applications, systems and business models that constrain their ability to transform while strategizing ways to incorporate modern technologies and approaches. This process includes shifting budget and resources away from traditional IT and toward new digital transformation initiatives.

As with any large-scale organizational change, IT transformation influences workflow, business rules and -- most importantly -- the corporate culture. Research firm Gartner identified culture as one of the top barriers CIOs must overcome to successfully transform an organization into a digital enterprise.

A unified vision of the organization's future state is essential, as is organization wide communication and training around new IT processes and technologies.

This was last updated in August 2023

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