Digitalization Requires Good Technological Understanding Also from the General Management

In a digitalized world, IT can no longer be just a business support function—it needs to be incorporated into the business strategy. This requires a deeper understanding of technology from the general management as well, says Aalto University Researcher, D.Sc. (Tech.) Kari Hiekkanen.

Tiia Lappalainen, 24.04.2019

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“It’s surprising how often you still hear that this doesn’t concern us. But that’s not true. Digitalization affects us all. It’s a megatrend which has already changed and will continue to change the world and our way of working in rapid fashion,” says Aalto University Researcher Kari Hiekkanen.

Creating something new requires failures, experimentation and development, the returns of which might be several years away."

According to him, companies should finally realize that they need to abandon the traditional thinking in which IT is seen as a company support function, and instead place it firmly at the core of the company strategy.

“In many companies, IT is doing things in a reactive rather than a proactive fashion."

The basic problem is that it can be difficult to measure the added value IT brings to a company. Creating something new requires failures, experimentation and development, the returns of which might be several years away.

Even a General Manager needs to understand technology

If you want to succeed in a digitalized world, the company’s management must have a strong perspective on digitalization and its impact on the company’s business and business environment.

It’s not an issue which can be simply outsourced entirely to the IT management, let alone outside the company. It would be similar to outsourcing pieces of the company’s strategy and knowledge.

This challenges management in a new way: you have to have a profound understanding of technology and the opportunities it offers.

The company’s management must have a strong perspective on digitalization and its impact."

“Knowledge and its handling, management and ownership have become a competitive factor that allows us to understand and anticipate better the customer’s behavior, for example,” Hiekkanen says.

“Management should understand for instance the value of data for the business and what elements it can provide for competition strategy."

Hiekkanen points out that you shouldn’t rush headlong into digitalization. You don’t have to do everything, even if others do.

Instead, you need to know which solutions are worth investing in this particular company, you have to be able to reconcile the company’s business and IT strategy, and you need to do well the most important things, such as portfolio and project management.

Permission to fail

Management is never easy, and it won’t be made any easier by digitalization.

At the same time that you need to take care of basic activities, you also need to create new things and look far into the future. You must be able to create and develop major system acquisitions that are ready to be implemented in three to five years, and at the same time be agile and react quickly to the changes happening around you.

This requires the reconciliation of two very different cultures on the IT side. A change in organizational culture and practice is often slow, however.

“The management of digitalization requires strong leadership and change management,” Hiekkanen says.

 “At the same time, it also requires the courage to fail.”

Kari Hiekkanen is a lecturer at Aalto PRO's Diploma in IT Leadership program, whose focus is the development of business-oriented ICT management and the use of digitalization to develop a company's business activities. He is also a lecturer at Aalto PRO's Digitalisaation johtaminen teollisuudessa program and Aalto EE's Graduate Diploma in Technology program.

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