What is digital strategy and how can ITIL® 4’s strategy management, workforce and talent management and Organizational Change Management practices support organizations on that journey?
This and more were the focus of a recent webinar featuring ITIL 4 authors David Cannon and Antonina Klentsova and AXELOS’ ITIL 4 architect and author, Roman Jouravlev.
Roman Jouravlev: 2020 has been quite a year with organizations experiencing a mixture of coping and surviving.
However, all are now heavily dependent on digital technology and many have had to go through transformation to a new operating model in weeks or months to stay relevant in this situation. So, digital strategy and transformation is now on the agenda, more than ever.
David Cannon: Organizations don’t have a choice but to move into digital. So, the traditional business strategy of breaking down into digital and IT is now too slow and fragmented for the rate of change. Now, I’m seeing the three levels of strategy – business, digital and IT – overlapping. Therefore, digital strategy is a business strategy that uses digital technology as its basis for doing business.
The business principles of understanding customer needs, efficiency, quality and delivering on customer promises are not new. But using digital technology to answer these questions is new and therefore operating/business models will change. For example, some restaurants have changed [during the pandemic] to food distribution businesses with pre-packed ingredients. This is a huge change to the supply chain, marketing, staff and opening hours.
Strategy in a rapidly changing environment
DC: Many organizations during the pandemic have put their business/operating models on hold, thinking they will revert back; but their old models might not be effective. Just as one example factor, when people started working from home, organizational culture changed.
So, when the environment disrupts quickly you can’t create a fixed vision and strategy for the next five years; you have to do it for the next three months and keep reviewing it continually. Organizations need to become more agile, tie initiatives back to strategy and adjust both depending on the environment.
I think ITIL 4 has done a good job providing an operating model for digital organizations – the service value chain (SVC). And what’s important is the SVC is not the IT department’s operating model, but the whole organization’s.
The cycles of strategy as described in the ITIL 4 Digital & IT Strategy (DITS publication, illustrate how the rate of change has made digital strategy so important, with technology refreshed, revised and replaced in months.
Strategy based on organizational and personal values
Antonina Klentsova: digital transformation is done by, for and with people – and people's behaviour is strongly influenced by their values.
In ITIL, we used the Barrett Model, which describes seven levels of the most important areas of teams’ and individuals’ motivation, from financial stability and profit through to building relationships, authenticity, cultivating communities and living purpose to contribution. Using this model, organizations can understand which strategy they’re ready to use.
When it comes to structuring an organization, ITIL 4 suggests that organizational structure needs to be flexible based on three possible models:
- Hierarchy – a classic structure for ownership of resources and capabilities
- Market – with service relationships and value streams
- Community – with shared values, resources and collaboration.
These three types form a range of options and companies should make a conscious choice of structure based on their current strategy.
Organizational change management and digital strategy/transformation
DC: Organizational change management (OCM) is critical. However, traditional OCM was focused on long-term changes and may be insufficient today; OCM now needs to be fast and embedded.
The skills and culture changes needed should be available and engrained in a transformation initiative; metrics need to be clear and their significance communicated in real-time, equipping people to respond to a changing world.
AK: Organizations need to start embracing people’s resistance to change as normal rather than the old-fashioned approach of fighting this resistance. What is essential for any change is to ask: why are we doing it and according to which values?
DC: In ITIL 4’s Digital and IT Strategy module, the strategy journey is based on the ITIL continual improvement model. This includes:
- What is the vision
- Where are we now?
- Where do we want to be?
- How do we get there?
- Take action
- Did we get there?
- How do we keep the momentum going?
The stages in defining strategy – while different in scope and objectives – are similar to improvement plans.
Ultimately, your strategy will probably contain some levels of improvement, the introduction of something new and changing ways of doing things.
Want to watch the full session?
This panel webinar is available to watch on demand
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