Did you know that businesses which prioritised cross-functional considerations were twice as likely to succeed in digital transformation projects? As companies grow larger, it can be easy to fall into a more traditional, siloed way of working — with each department striving to meet different goals. However, this fragmented approach can hinder the overall success of a company, particularly when it comes to business-critical projects like digital transformation.
Creating cohesive teams and sharing information is vital to digital transformation success. While it may be easier to manage isolated teams, working in silos is a barrier to business development and digital transformation success. Cross-functional collaboration is key — a digital transformation project requires input from business and customer-facing workers as well as tech-focused teams.
In this article, we’ll define cross-functional digital transformation and provide actionable advice on how business leaders can promote collaboration within their companies for digital transformation success.
What is Cross-functional Digital Transformation?
Cross-functional digital transformation is when professionals from all walks of life are included and consulted on the introduction of new technologies. While the bulk of digital transformation is implemented by people with a more digital skillset, the end-users are often business, retail, or communications professionals. In a cross-functional team, everyone is represented to ensure all needs are met.
Cross-functional collaboration is important because digital transformation can be so complex that to achieve the highest level of success it needs to be tackled with individuals working together across disciplinary and organisational boundaries. Here are a few other benefits to cross-functional teamwork businesses should consider:
- Cross-functional teams can more easily identify and avoid potential pitfalls with the input of different people who have varying expertise.
- Knowledge is more easily shared when experts from particular departments are part of a team, rather than only being consulted occasionally.
- Problem-solving is significantly faster because work is shared across departments and an array of experts is available.
The Challenge of Cross-functional Rivalry
In a survey of 1,500 global executives, 75% said that the different functions of their businesses (i.e. Production, Marketing, Operations) compete against one another during digital transformations, instead of working together towards a common goal.
The only benefit of cross-functional rivalry is a diversification of risk: if one department’s digital transformation ideas don’t pan out but those of another are successful, overall the company still gains. However, those gains are minimal compared with the success a business could achieve if functions are convinced to collaborate.
Without a cohesive approach to digital transformation, it’s impossible to look at projects holistically. Some departments inevitably prioritise their development over others, and businesses end up fully digitised in some functions but woefully inadequate in others.
Ensuring Cross-functional Collaboration in Digital Transformation
In 2020, Accenture designed a roadmap that companies should take to overcome common collaboration challenges and to harmonise digitalisation efforts across functions.
The five points they outlined were as follows:
1. Be specific and clear about the vision and mission for your digital transformation
Clear goals are a vital part of any project, but they are particularly helpful for cross-functional collaboration as clarity can help encourage teamwork between departments. With clear goals, each function will know exactly how digitalisation helps them and exactly what they need to contribute to make a digital transformation successful.
Back in 2014, Ford attempted digital transformation by creating a spin-off company called ‘Ford Smart Mobility’. However, the project was ultimately unsuccessful because executives failed to clearly outline how this function was to integrate into the existing establishment and infrastructure.
2. Assign ownership and responsibility around cross-functional collaboration
82% of companies that have been consistently successful in digital transformation projects say that they have a single executive who both drives a digital transformation project and is responsible for its success in each function.
Having a single person in charge of a collaborative project ensures that everyone is on the same page regarding objectives and outcomes. It also harmonises the approach to digitalisation — having different people in charge of the digitisation of different functions can lead to some departments developing faster than others. If those departments need to share work, problems can arise if their technology or procedures are not aligned.
3. Prioritise digital initiatives that stimulate cross-functional collaboration
Cross-functional collaboration is difficult if your digital transformation project only affects a single department. Priority should be given to projects that require collaborative teams and multiple functions, as these initiatives will likely have a much greater impact. By picking projects that bring people together, you can achieve company-wide transformation faster, smoother and more efficiently.
4. Don’t compromise on interoperability
Collaboration isn’t just about human beings working together. If different functions use different systems or technologies, part of a cross-functional digital transformation should be ensuring that these systems communicate and work well together.
By creating stronger links between the platforms used by different functions, you’ll encourage stronger collaboration in future projects and a better relationship between departments.
5. Build smart IT-OT governance policies from the get-go
A digital transformation will likely affect both IT (Information Technology) and OT (Operations Technology). Thus, it’s vital that the IT teams in charge of data have clear guidelines on how they’ll work with the OT teams in charge of machinery.
Multi-disciplinary teams with both IT and OT representatives can analyse and deliver much more high-value data than a team that does not collaborate. But you’ll need to establish clear policies on what the two functions need to work on together first.
Cross-functional Digital Transformation as a Key to Success
Employing a roadmap similar to the one developed by Accenture is essential for encouraging cross-functional collaboration, which in turn is critical to an efficient and effective digital transformation. Planning ahead by creating goals, assigning responsibilities, and creating policies related to cross-functional digital transformation all help create an environment more conducive to success.
Planning does eliminate some of the issues companies are likely to encounter, but executives should also recognise cross-functional rivalry as a potential danger. Rivalries can be a tough hurdle, especially if your company culture has traditionally used rivalry to diversify risk and encourage creativity, and it might not be solved with thorough planning alone. If rivalry does emerge as a serious issue, try to discuss the problem with department heads to refocus their energy on teamwork.
Encouraging cross-functional collaboration isn’t easy, but the benefits of this practice make the necessary investment of time and effort worth it. Executives in charge of digital transformation should strongly consider making collaboration a strategic focus if they’re seeking to improve the quality of any digital transformation project.
Measure the Impact of a Cross-functional Approach with BlueOptima
To help your company evaluate what cross-functional collaboration could do for you, we at BlueOptima would like to present the Global Benchmark Report. It’s a comprehensive review of the entire software development industry, and includes reports on everything from performance to cost efficiency.
By using our metrics, your company can objectively measure the impact of a cross-functional approach and decide if it’s something you can implement efficiently. If collaboration is already a key part of your digital transformation strategy, the report’s information can also help highlight issues that might block either collaboration or digitalisation.
The BlueOptima Global Benchmark Report exists to help your company reduce risk and more effectively prepare for future projects. To learn more about the report and increase your chances of digital transformation success, click here.
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