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University of St. Gallen

Governance of digital transformation

Overview

The digital transformation of established companies and the launch of new digital business models that generate a sustainable return pose major challenges for management and the board of directors. The Governance of Digital Transformation research area is working on models and methods that make the success factors for digital transformation and digital business models controllable and measurable. In addition, guidelines are being developed for key topics such as digital strategy design, digital backbone and frontend/backend architecture, agile transformation and cross-functional collaboration, customer-centric frontstage, and digital business models.
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While agile principles and methods have become mainstream in IT solution development, they have also immersed project management and organizational design. This process, however, is gradual so that management and governance practice of digital transformation programs (DTP) often have to deal with a coexistence of agile and traditional components. Such coexistence leads to tensions as some agile principles and methods are incompatible with or even contrary to their traditional counterparts. Drawing on existing discourses on tensions and governance, the purpose of this paper is to (1) identify and analyze such tensions in the context of complex DTP, (2) explore the corresponding challenges for program governance, and (3) derive requirements to enhance current DTP governance practice to deal with those challenges. The data gathered from an in-depth revelatory dual-case study of large DTPs let us identify 18 tensions, 17 corresponding governance challenges, and derive 10 requirements for a “change-mode-agnostic” governance system.

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Despite growing project management maturity, the failure rate of IT-related projects remains high. We investigated four large IT-related projects within the Swiss Federal Administration that were well-managed but still failed. We found that these projects failed because of poor project governance, in particular inadequate handling of project context by the project sponsor and steering committee. We identify five contextual factors that steering committees should focus on and provide recommendations for strengthening context-aware project governance, illustrated by their implementation in the Swiss Federal Administration.

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