It’s easy to think that digital transformation is all about technology — but in truth, just as with all kinds of business transformations, digital transformation is about people. Success can come only if you work hard to meet the needs and desires of the people whose jobs will change, and if you work hard to support the people who will be driving individual projects and programs.

There are three common approaches to organising for digital transformation (see figure below). The approach that’s right for your organisation depends on where you are in your digital transformation journey and what you need to accomplish next. For digital transformation to really succeed, you need to get to a state where “digital business” is business as usual. The question is: How do you get there?

3 common approaches to organising for digital transformation

3 common approaches to organising for digital transformation

Most organisations start their digital transformation journeys with a special projects team reporting into senior management, working separately from established business and technology capabilities. In this situation, traditional approaches to decision-making — relying on hierarchical decomposition of roles and responsibilities, and dominated by quarterly or annual budgeting and decision cycles — dominate most technology delivery into business. This approach works well when business and technology contexts are stable and predictable, and the chief goals are cost and risk management. But it’s not suitable when the context is unstable and unpredictable, because the business goal is innovation!

Traditional hierarchically managed and strictly-planned initiatives are designed for operational reliability and cost predictability. But they’re prone to high levels of bureaucracy and political manoeuvring, slow delivery and over-engineering of solutions.

For this reason, as organisations progress in their maturity with digital transformation initiatives, there’s almost always a shift. Early “special projects” teams are formalised into “offices of digital transformation” or “centres of excellence”, with mandates to disperse new ways of thinking and working through projects, both driving digital innovations and focusing on improving existing business-technology capabilities. Still, though, these centralised units can falter as their recommendations are received sceptically or rejected outright by experienced teams used to traditional ways of working.

Eventually, if you want your organisation to experience long-term, sustainable benefits from digital transformation, you have to embrace more agile working approaches across the board. You can’t just expect agile working to spread organically because of a central team’s recommendations.

To match the speed at which digital businesses operate, your organisation will need to embrace a new kind of agile structure that’s built to withstand — and sometimes even to promote — constant change (either disruptive or incremental).

Agile organisations are built around matrix structures, where cross-functional teams (bringing together technology and business representatives with a variety of specialist skills) are responsible for supporting and delivering services end-to-end to support the needs and desires of customers. Agile organisations don’t externalise decision-making, delegating it to separate management layers; they empower employees working on service creation and delivery to make decisions using common, customer-focused measures of success.

Agile organisations can move more quickly, yield better engagement around change management, and excel at continuous improvement of end-to-end services dealing with customer needs. Of course, though, nothing comes without challenges: Agile organisation models can themselves suffer from complexity, can take a lot of time to get right, and can be less predictable in their behaviour and path to delivery of services than traditional, hierarchical organisational models.

When embedding agile working models across your organisation you have to recognise, and work to counter, these challenges. Implementation here is not simply about creating new structures and responsibilities. It is also about embedding two cultural values: the customer comes first, and everyone strives for continuous improvement.

Of course, there will be employees within your organisation who will continue to resist digital transformation or hold onto antiquated processes. Providing joint training opportunities for both junior and senior employees will help nurture collaboration.

Digital transformation is definitely technology-enabled, but it’s people-powered. You can’t succeed without embracing this truth.

This article is part of the IDC series “Your pathway to digital success,” written to inspire business leaders to overcome common challenges along their organisations’ journeys.