Author Archives: Morten Stender

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Digital – Outer Game or Inner Game?

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We all want a place in the digital market, we all have strategies and discussions of how to win the battle. However, as part of this dialog, we often see different levels of abstraction to words such as ‘digital’, ‘AI’, ‘transformation’… We may point to the definition of  ‘digital transformation’ and ‘digitization’, however, in this article, we rather structure a few of the terms to provide a more transparent dialog to what does it mean to have a place in the digital market.

The two terms  ‘digital transformation’ and ‘digitizationstrictly are very different, but they are  both part of the digital agenda. Where the digital transformation at the heart is about changing form and paradigm, the other one is to optimize while keeping the paradigm. So to have better discussions about internal or external forces, of effectiveness and efficiency in the digital age, we advocate to structure the digital dialogue using:

–          Games

–          Themes

–          Elements

With a decomposition of a strategy discussion we start to obtain the common vocabulary for some of the apple-to-apple discussions of what we want to achieve as part of the digital agenda. The reason be that with our definition of Games, Themes and Elements we can start to have much more meaningful conversations to what does it mean to become ‘customer centric’ or make ‘a successful disruptive customer journey’…

The purpose of this is two-fold:

  1. to structure the dialog so we can compare apple-to-apple in the discussions and needs of using words like disruption, digital, etc.
  2. and second, to be able to break down the dialog to another level, where we can support the behavioral change of the strategy execution.

To increase the chances of winning a strategy, we need the construct of Themes and Elements which can be part of a behavioral change – and be made actionable daily.

So how to make a strategy successful? Of course, the content is part of it, which might be assisted by better digital planning or Digital Twins; however, even without the bullet proof planning, the strategy still needs to leave the glossy PowerPoint and become actionable for more people!

A successful strategy cannot survive successfully with high-level statements such as “we need more levers”, “digital customer satisfaction”, “larger on business value”, etc. For two reasons, it doesn’t answer the question of how and it doesn’t make it actionable for anyone within the organization. Having said this, when we help large companies, it is very often in that field of executing the strategy by encouraging more people to do what is actionable for them; one may argue it is less about the strategy, and more about getting to the point, where people can contribute to the strategy. This is how you make sustainable change.

To make a strategy executable, we need to de-compose it into Games, Themes and Elements, and then further into the ‘daily behavior’. If things become part of daily behavior, we start collectively to move. In other words, in order to succeed with the strategy execution, we need the decomposition that relates to daily behavior.

We have identified currently two håndful of  digital elements, three digital themes, and two games, that currently seem to address most of the strategy-to-execution assignments we meet.

The two games represent the Outer Game and the Inner Game of an organization. These terms are re-used from leadership schools. These two games represent two different perspectives that will supplement or compete. The Outer Games is by definition the external perspective of ‘what is possible’. The Inner Game has a focus on the existing organization and competencies, hence ‘what can we do better’.

Digital Transformation by its definition is part of the Outer Game – how to design the new business model. The digitization is by its definition much closer to the Inner Game of how to do things more efficient – without changing our fundamental customer base, culture or anything touchy…

Now, the two games are related like strategy to culture, like Yin to Yang, like innovation to operations. They cannot live without each other, but they also represent opposite purposes. The purpose of the Outer Game is to follow principles of the Porter school, how to create a future into the market. As opposed to this, the Inner Game focuses on what can we operate, what can we do better, to fit with our capacity, our skills our collective win.

Now, having the two games defined, we see at least three digital themes that need to be addressed to make a successful change. We advocate to limit the themes to not more than these three Themes:

  1. [inventing] New Business Models
  2. [Changing] Customer Experience
  3. [Improving] Process Excellence

Then the digital elements are groupings within the Themes that are simpler to make actionable and behavioral. And to succeed with strategy to execution, we need to decompose into elements and make planning to support the digital transformation.

There is more research on the internet, where it is stipulated that moving forward with digital transformation, the best companies combine the [inventing] New Business Models with the Outer Game, simply to combine digital activity with strong leadership to turn technology into transformation then to future revenue streams. Other companies are less market focused, typically public service sector companies, which will then prioritize the Inner Game  on [Improving] Process Excellence. Unless protected by regulations, borders or legal fence, companies that are more mature will eventually outperform those that are not. So, if you want to lead the digital change, choose the Game, Theme and digital elements that meet your need.

We help to align long-term planning with short-term planning, which is an ongoing process – and a digital process of information management. Long-live the digital planning. If you have questions, please make contact. We are a consulting house with senior profiles and business solutions; we provide deep expertise in digital planning, digital governance and process automation. We power your digital mood!


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GDPR – How to make it stick!

Category:EA,Services Tags : 

Many companies are spending large amount of effort to run  GDPR projects prior to May 25th, 2018, however, we face an increasing interest to migrate away from proprietary point-tools of GDPR assessments towards a permanent solution within the EA Portal to make the compliance a continuous process within the data-driven enterprise;

If you manage your EA well, the GDPR implementation it is a minor step to extend your EA Portal to a modern and managed regulations Portal.  However, if you do not have a solid, end-user accessible EA Portal, having control of data, integrations, and technologies, the GDPR project may be a big effort. Starting with architecture focus for architects will not help the journey – you need to apply evolved techniques to succeed and mature in time to meet business requirements.

We advocate to simplify the governance by applying the EA Portal to make a living architecture supporting the different legal rule-sets including the GDPR. As the core requirement to the GDPR requirements is about the processing of systems, processing of personal data, it easily extends to the architecture overview of managing systems data and integrations data. We see still more places that GDPR point solutions are migrated into the EA Portal to easily demonstrate degree of compliance. Using the principles of EA, it is straight forward to work out a plan to stay compliant before May 2018… Working with us, we provide ready-made solutions to your business.

What is the new with Personal Data Protection?
What is new is not as such the procedure to do so; the new is the regulatory framework that makes the consequences of failing compliance to something that in case of non-compliance will be a board issue… However, incentive or not, the GDPR operates with a new tiered fine structure.

Data protection and impact assessments
The GDPR includes also an article for data protection impact assessments. The Impact Assessments must be provided before new services or products are launched. So, it is acceptable to work with agile approaches and fail-fast approaches, but before the validated product goes live, there must be an impact assessment to secure personal data. This will force many project managers and IT departments to proactively consider what security measures that will be put in place to secure path for compliance assessments.

How to prepare for the GDPR?
May 2018 is soon, so for many companies the GDPR may come as something ­of a shock. An immediate action is to appoint a data protection officer who would will be accountable for advising on and monitoring GDPR compliance, as well as representing the company when contacting the supervising authority. Very often, this will have a call to the CIO or his/her delegate. However, this is a mandatory step to have an accountable person, but far from enough. The organisation must work with the responsibilities of the new GDPR, and this is where the EA and governance frameworks may be the hidden fuel.

Here is a list of focus areas to consider aligning with EA and governance frameworks:

  • Business Model Canvas – With the focus of reporting and getting coherency to the business, it is important to lay out a Business Model or Business Processing Map. This business model will serve to understand what functions and overall processing that takes place ‘where’ in the business. With the Business Model, it is possible to pin-point what types of classified data that is expected in each business area. The outcome of such assessment is a recommendation for what types of personal data each business area should have access to. The GDPR will require a gap analysis to be part of the ongoing processes to minimize the access to classified personal data. Without the Business Model, it will be difficult to provide a meaningful reporting of the gap analysis. It should be easy to demonstrate compliance and perspectives of where there is a high risk of personal data is accessed in much larger areas of the organisation. This is where information modelling, capability modelling and our business solutions can be helpful.
  • Business Applications Management – With the updated perspective of the Business Model, it is recommended to provide a Business Application Catalogue. Such a Catalogue should have strong relationships to the Business Model, hence, this is not an ITSM services catalogue.  The Business Application Catalogue should be governed and part of a living architecture. If such an APM catalogue or Business Application Catalogue is not available and managed, this is highly recommended to get in place alongside the Business Model. This will serve as the foundation for the Data Classification and Data Retention. This might be a simple cloud offering from us, or be a more integrated portfolio solution from us.
  • Data Classification– With knowledge to what business capabilities and what business applications, it is a simpler and more straight-forward task to assess where your personal data is stored. This includes structured electronic data as well as unstructured formats of documents, presentations, and spreadsheets. This is critical for both protecting the data and also to follow the impact of change of  personal data. To solve this puzzle, we would advise you to get the overall Business Model and Business Applications Catalogue in place first, then extend to master the presence of personal data with categorization. The categorized personal data is classified and mapped to the landscape of business applications and infrastructure information, and also against the intended usage – to pin-point irresponsible presence of personal data through-out the organisation.
  • Governance– With data comes also the operational processes to maintain this GDPR information daily. This will lead to establishing the processes to secure ‘data security by design’ and ‘data security by default’, alongside the roles and responsibilities of keeping the Business Applications Catalogue up to date and to understand ‘who has access to what’. We advise that companies first get the foundation in place, then the Data Classification, then to tailor and adapt this to the existing processes of the organisation. Some relevant frameworks would be IT4IT, TOGAF and COBIT to ensure there is a focus on controls, follow-up and management accountability.
  • Gaps and Digital Action Planning– With its requirements for limiting data retention, there is no firm metrics to follow. This means you’ll need basic information on what data is collected, why it is collected, for how long it is supposed to be collected, and how the processes are for ‘releasing’ information again – tailored to metrics that are justifiable. This must be an integral part of the processes for managing data. Personal data residing in business applications should be periodically reviewed to see whether it needs to be kept or removed. It is important that the Data Retention is supported and supporting the Governance. Also, it is obvious include the gaps identified in a digital actionable form to help with the ongoing compliance. Reports and alerts to non-compliance should be an integrated part of the Digital Action Planning. This is MooD-based solutions can help.

We can help you to build the GDPR compliance within your digital EA Portal. It is faster – and more sustainable. The conclusion is clear, if you manage your EA well, the GDPR implementation it is a minor step to extend your EA Portal to a modern and managed regulations Portal.

We help to align long-term planning with short-term planning, which is an ongoing process – and a digital process of information management. Long-live the digital planning. If you have questions, please make contact. We are a consulting house with senior profiles and business solutions; we provide deep expertise in digital planning, digital governance and process automation. We power your digital mood!


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Playing and planning with a digital twin

Category:EA,UK Blog Tags : 

We continuously elaborate on the direction that Enterprise Architecture is taking. Recently we found the inspiring presentation from Gartner  and Marc Kerremans, talking about the construct of a ‘digital twin’ as a new and emerging concept:

“A digital twin is a dynamic software model of a thing or system that relies on sensor and/or other data to understand its state, respond to changes, improve operations and add value. It includes a combination of meta-tada, condition or state and event data”,
Marc Kerremans, Research Director.

This is interesting, as it puts focus on the ingredients of meta-data to provide a better future set of operations. So a ‘thing’ is no longer a computer…  A ‘thing’ can be an organisation, a performance, a situation or a value. It simply becomes  borderless, see also Gareth Morgan’s 8 metaphors. And there is certainly a potential to apply the known practice from adaptive control theory, where there is a blend of digital models and physical measurements which can be compared, optimised and used for improved performance.

The basic idea of a digital twin is hence back to classic cybernetics, it is to let “play” and “observe” at the same time. The real system plays it traditional way with lots of data, but behind the scene, the digital twin is “observing” using a simpler model; and eventually, this will create new controls. Some of the core material by Karl Johan Åström and Björn Wittenmark go back fifty years, describing how dynamic models relying on external sensor and/or other data can be modeled  with a known distinction to

  1. System identification and adaptation (getting the model parameters),
  2. Filtering (getting the states), and
  3. Control (adjusting the input) based on different predictive horizons and criteria.

Would it be possible to apply Kalman filtering to improve the response of a digital twin? why not! The idea of a digital twin is to apply the systems thinking to the organisation so that the organisational performance is considered a system, which can be modeled with states and parameters, and which is likely a stochastic and non-linear system with many input and many outputs. Is it controllable? Is it observable? What type of model would we end up with?

Clearly it will by a hybrid model where finance or sales is easier to measure and forecast than a lot of other performances – and likely as well, where no digital twin is one-size-fits-all, they will be tailored to specific use-cases. Where the digital twin is mostly focused on the prediction, it will benefit from the updated set of data which is also part of the living architecture.

So, the trajectory is to move the digital twin more into the direction of information management, where information models are established, and where statistical properties of the core behavior is turning measurable, so that with data-lakes and big-data that we can start to model and identify the dynamic models of the enterprise – rather than to see a bunch of tables. Not necessarily an easy task, but as stipulated by Gartner, the purpose is to provide better planning to lower risk of fact-based decisions. With a digital twin of an organisation, we can measure the input/output of an organisation, and we can forecast how it would develop. The adoption of digital twins will likely lead to models that can be used for simulation and forecasting.

The Internet of things (IoT) provides a bigger and larger system where the business operating model at heart to us should include performance measures and measurements of many variables. And to apply this in a business context, the target is to find an algorithm to forecast and optimise the predictions given different types of input.

There are however, different grey zones in this concept to get it fully operational.

  1. One is the cultural shift that one needs to consider.
  2. Another one is the statistical models to be applied, how and what,
  3. A third and not the least, the choice of ‘states’ and ‘parameters’ of the model, a model typically known as the business operating system (BOS).

We advocate to start the journey towards enabling a digital twin by three simple steps:

  1. Identifying the ‘meta-data’ initially to provide a logical layer of how an organisation is connected form suppliers to clients,
  2. In the second phase to apply states and parameters to consume measurements to connect the dots of the BOS.
  3. With focus on dashboards, outcomes and KPI’s this brings the third phase to compare targeted and measured values. This is what essentially is the fuel for the digital model to optimise your fact-based input to the strategy-to-execution.

The scenario-based planning may be accelerated by these kinds of models. Use a digital twin of an organisation to help your business leaders to minimize the risk of new growth. We advise to begin with the logical layer. This is where fly-by-wire dashboards can be produced for guiding your business journey. This is where the digital twin should be used to maximise business outcomes. The importance is the act of digital planning as well as the precision of the models. If you interested in technology supporting a digital twin of your business, we can help you! Don’t build it yourself, there is emerging technologies supporting big data and digital twins.

We power your digital MooD.


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Digital leaders fuel innovation across the business

Category:EA,UK Blog Tags : 

In the latest Harvey Nash/KPMG CIO Survey 2017, which is the largest IT leadership survey at all, there is number of key take-aways! With 4498 responses from CIOs and technology executives across 86 countries, this survey outlines some of the high demands.

One of the main trends is the level of change they are experiencing has reached unprecedented levels, and increasingly it is coming from unexpected corners. Many technology executives are turning this uncertainty into opportunity. They are helping their organizations become more automated and digital, to navigate through unpredictable change, and to thrive in an uncertain world. This also aligns well with disruption, digital transformation, and the act of digital planning, rather than the specific plans.

A conclusion from above survey also reveals a clear divergence between organizations that are effective at digital transformation and those that are not (read digitization). CIOs at these ‘digital leader’ organizations are almost twice as likely to be leading innovation across the business. That is, ‘digital leaders’ who take the opportunity to work with disruption and dare a digital transformation, they will likely be leading the innovation processes across business.

Some of the key findings are: Two-thirds of organizations are adapting their technology strategy because of unprecedented global political and economic uncertainty, two-thirds! Almost 90% are maintaining or ramping up investment in innovation. That is the digital strategies are reaching new levels, and the single fastest growing tech skill in demand to succeed with this, is the enterprise architecture. IT projects are getting more complex, have unclear objectives, need to work under still more open-ended environment, meaning the importance of solid and living architecture is becoming a necessity for the digital leaders. Here we use the term enterprise architecture, as defined by Gartner,

“Enterprise architecture (EA) is a discipline for proactively and holistically leading enterprise responses to disruptive forces by identifying and analyzing the execution of change toward desired business vision and outcomes. EA delivers value by presenting business and IT leaders with signature-ready recommendations for adjusting policies and projects to achieve target business outcomes that capitalize on relevant business disruptions”.

So growing demand for enterprise architecture is not the static picture from two-three decades back. The evolving discipline of enterprise architecture is focusing on execution of change, planning with disruption and with a clear view on business outcomes. This requires not one-size-fits-all tools nor performance processes. It requires an open-ended approach where scenarios may be planned, business model may be expanded over time in an agile way, to be constantly validated and experimented before implemented (also referred to as a digital twin). And while planning for the future business blueprint, there will still be a large amount of legacy to be resolved or migrated.

The living architecture is based on a eco-system of connected insights. The pendulum swings back to central knowledge, democratized input, for all the dots that need to be connected in a larger enterprise, including products, services, strategy, business, applications and infrastructure.

We often advocate that for companies who are interested in enterprise architecture, make sure it is not an end in itself, but a mean to accomplish the digital strategy and innovation required to fulfil the digital planning. Clearly, the survey puts high demand on enterprise architects who can execute the strategy and provide a digital transformation. One may see the digitization as a pre-burner or enabler for the next steps, but if the paradigm of the business model isn’t changed, disruption not considered, nor if the digital transformation isn’t led by the business strategy, then it will have a hard time to sustain. This where we can help you!

We power your digital MooD!


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Start your digital service integration – introducing SIAM

Category:EA,UK Blog Tags : 

As we force ourselves into even higher gears of technological innovation, the trend in the market is to move closer to multi-sourcing and high-end services from best-of-breed suppliers; e.g. one supplier might be good at delivering People Performance Management, while another provider is excellent at providing Information Management. So instead of outsourcing all infrastructure and databases to one supplier, it may be attractive to partner with that vendor, who is e.g. leading in cutting edge solutions to People Performance Management and Information Management –  including all operations, maintenance and development.

For the organisation procuring such services from still more high-end providers there is a challenge of how to succeed with the management and administration of services, which doesn’t necessarily fit with each other. How to manage the multi-sourcing setup providing insight and accurateness of the information management of the different service providers.

The term to manage the multiple vendors to provide consistent services to the end-users is denoted Service Integration and Management (SIAM). The objective is to provide a single business-facing IT organisation, however, as these vendors deliver different types of services, the term services often gets blurred in discussions – and can often be quite different things! Hence, there is a pitfall in trying to establish a huge services framework as a theoretically based exercise. To succeed, we recommend building the services step-by-step as the digital governance is established in the  living architecture.

According to the research paper by Goldberg et al, SIAM is the discipline to procure and blend services from multiple external and internal providers. As the SIAM management eventually will have a cost, and the best-of-breed providers may be hard to compare with more traditional outsourcing providers, there may be a challenge on cost.

Many clients face different issues implementing and getting the SIAM layer to perform satisfactory. Simply to succeed with SIAM, the organisation needs to understand the architectural structure of the IT landscape, and how it is managed by delegating accountabilities of a digital governance. However, the main pitfall is still that most stakeholders are reluctant to buy ‘services’, e.g. if they have a preference for certain vendors, certain products, certain solution patterns. There is this paradox, as to succeed with service integration, you might have to go around services as a term. To establish an end-to-end SIAM solution you need to work on the digitalisation of the metadata and information management of the different vendors. To succeed with SIAM, you need to manage your sourcing assets with all the relevant dependencies as part of managing the digital governance. This is almost a prerequisite to manage SIAM as an ongoing digital process.

Before moving into SIAM, an organisation should consider many factors. We have listed 7 pieces of advice to succeed with digital services integration:

  1. Map out your Business Capability Map so you have a consistent view of ‘what does the business do’, and what is done where in the business

 

  1. Then map the business applications and business projects and other sourcing deliverables. This allows a direct coupling from IT to Business, and allows in parallel the business services construction. Try to avoid layers of academia and ‘noun services’, start building the typical orderings and offerings requested from stakeholders and end-users.

 

  1. Enable a digital solution of the management of the service integrator; managing the information exchange between own organisation and external providers. What is the live information you get from the providers to secure your information is up to date.

 

  1. Enable a digital solution of the management of the service integration, managing the information between the different providers. What is the alive information you need to manage the vendor?

 

  1. As the SIAM solution evolves there will be a living representation of how infrastructure relates to business applications, and development, and further into the business. Make sure this end-to-end model is clear, alive and governed using terms common for end-users (not the academics).

 

  1. Align the vendor management with the information management to align scope and expectations across the provider contracts. The information management should be an online living architecture which at heart supports the SIAM solution. Ensure silo-services and non-silo services are experimentally approached, validated, and approved.

 

  1. Get yourself an advisor who can help you to build the SIAM portal with an agile mindset. Most of the services and groupings of a SIAM solution must mature, the fastest route is to experiment, validate and grow. It is like a restaurant, where the services menu card is not ready day 1, but testing a menu card, you will see which services are asked for, in what type or spiciness, and what other meals could be composed from some of the same ingredients.

 

The integration of interdependent multi-sourcing services is difficult for many clients, but for those clients who manage the information management as a  living architecture with digital governance, it is a minor step. The challenges of assuming this is done by IT Service Management is often a too simplified picture, and the challenges to solve the services enabling before building the SIAM portal seems often academic with limited success and low impact. We advise to bring alive the digital platform using interaction in the planning and definition of the SIAM solution. This is the safest way to enable your digital services transformation.

We power your digital MooD.


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Digital Transformation – The Cultural shift is paramount

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Last month we met with CIO’s and EA’s to discuss the most important elements of succeeding with Digital Transformation. The first thing we discussed was the definition of a ‘digital transformation’ – to discuss and facilitate the discussion of how to differentiate it from ‘digitalization’. In essence, the following focuses on the transformation, not to mix up the two terms.

As ‘digital transformation’ at the heart it is about data and enabling a new business model, it is also about establishing a new culture. If ‘digital’ loosely means data, and ‘transformation’ means changing shape; then ‘digital transformation’ is about transforming the shape of the business model to use data smarter, i.e. it is about moving the organisation to a new paradigm where existing processes are ‘split’ rather than fitted and optimized to become data-driven.

This also brings us to the main take-away. We can enable a digital transformation faster with proper technology and roadmaps, but at the heart, it is about people and changing culture. To succeed with the transformation, time and space should be challenged, which will impact the culture in different ways  – and it will challenge managers in todays business operations.

This brought us to the second observation, if people are not freed-up to work with the new shapes, they typically drown in day-to-day activities focusing more on lean and continuous improvement. This is why many organisations decide to move transforming development to new sites or do acquisitions, as it seems too hard to change the prevalent culture.  

It brings to the surface the dialog of Schein versus Porter – is it the culture or the strategy that drives the change – What drives what? They main take-away seems to be that the culture shift is paramount to the change, if not, the transformation effort may dilute. If we want to change the culture, we need to consider how this should be ignited, proven and collectively accepted. Hence, the organization may have to challenge itself to step outside the comfort zone and challenge the type of earnings and offerings. A research by Warren Ritchie indicates, that innovation does not take-off by size of the company. On the contrary, most innovation comes from either smaller or very large corporations as they both manage the working culture with slack and innovation focus. But be aware, most large corporations may tell you they have an innovation culture, but they may mix-up the words of a culture of continuous improvement versus that of transforming the paradigm!

To example this, e.g. Spotify and other music streaming services decided not to invent a larger CD; and likewise, Philips who introduced the CD did get royalties from the former music cassette – they both changed the way services could be delivered – challenging the media, space and time. Is it likely that the organisation and culture of Spotify is different from that of the labs building hardware devices in the 90’s? – absolutely.

In a nutshell, different shapes of the business model, offering different services by use of new technology, time and space is the driver of the digital transformation. This will not circumvent continuous improvement of the existing processes of today’s operations, but it is not the same approach and success factors, see post. To succeed with a larger change, the shift of culture is paramount, needs to be addressed, but proper technology and approach may accelerate the pace in which your organisation can succeed. 

We can help you to plan the change, and may with our digital transformation suite accelerate the pace.

We power your digital MooD.


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From Watch to Move – Digital Transformation

Category:Services,UK Blog Tags : 

Very often, we hear the terms ‘digital’,  ‘become digital’ or ‘go digital’ as phrases for businesses being more modern and streamlined, however, it is clear from many articles and posts that people not necessarily mean the same thing with these terms. Largely spoken, they are all related to the two words

  • digitization and
  • digital transformation

However, digitization and digital transformation are also not the same thing, but even though these terms also are sometimes mixed-up, they may also correlate. This has recently been spotted in the great post by Jeanne Ross, try not to mix up these two words! However, they both belong to the digital agenda!

What is ‘digital’?

I have the age to remember the first digital watches – and how the CD-player as an innovation moved the music from analogue devices into the era of bits and ‘digital’ format – which eventually led to streaming of music data. And looking up Wikipedia (in English), it says that digital usually refers to something using digits, particularly binary digits; that was indeed the case of the CD-player versus the analogue voltage of record players. Now, the original meaning of the word ‘digital’ originates from Latin, which means typically finger or counting fingers, or just a finite number or digits. In other words, the simple evolution gives that digital is something that eventually ends up as a finite number of computerised bytes delivered somewhere of ‘some contents’ –  we may just call it ‘data’. So if we apply the definition that digital means ‘data’, then at its heart, digital is about the creation of data from hardware and software; digital is about the intelligent transportation of data; and digital is about the use of data to power smart industries and businesses!

With digital in the meaning of data from anywhere in the business, consequently, digital transformation may be seen as the ‘planned change’ to a future usage of ‘data’ involving new (sometimes disruptive) technologies. Hence, digital is an embedded ingredient of both ‘digitization’ and ‘digital transformation’. Digital is the key ingredient of Digital Governance.

Digitization

Digitization is often known from public sector, service sector and LEAN where the efficiency of the getting more ‘digital’ processes and lean processes by avoiding paper, snail mail, etc. is being achieved. Different companies are not all equally forefront in digitizing the business. Borsen recently posted an analysis of Postnord (Danish/Swedish mail provider, former royal post). In Denmark the public sector has achieved a higher digitization than the Swedish one. This has been achieved with a high management-focus on digitizing the work flow and citizen correspondence. In other words, the word ‘digitization’ involves standardizing of business processes and is associated and motivated by cost cutting and operational excellence; or as one could say, to do more of the same – just more electronically. It is not that these companies are passive, it is just that they don’t change the business model, but may watch the ‘new kids from the block’ introducing new games and business rules.

“Digitization involves standardizing business processes and is associated with cost cutting and operational excellence. In essence, it imposes discipline on business processes that, over the years, were executed by individual heroes in a variety of creative (but not always optimal) ways.” – Jeanne Ross

Digital transformation

Digital Transformation represents a higher degree of change. However, we would argue that the key differentiator is that it is based on a different paradigm! It ‘splits rather than fits’ the existing processes, hence, it is a top-down approach to transform a company from as-is to the next digital era.

“Digital transformation is the strategy to execution toward a new business model which is based on a different paradigm, that it splits rather than fits the existing processes, and for that you need to map-out your future business model. Don’t start with your existing processes; start with your future operating business model!”

To make a transformation into a digital company, you need to consider the new way such a future company can achieve a market place with (maybe radical) different services, offerings, delivery methods, locations and meet-up. Companies that strategically seek to analyse and build this way, will not only look for more electronic ways to do the business of today, but they will seek a new operational model to serve customers with a different supply chain and operating model. These companies realise that they have to move the business model to reach the desired outcome.

Both disciplines are valid

Both disciplines are valid, but they clearly work from different paradigms. We recommend companies who want to become digital to work with it strategically, then to drive the strategy-to-execution and make it actionable and achievable. It is a totally different exercise as to digitize existing processes!

Where digitization involves a blueprint of all the business capabilities, then to map the low-hanging fruit to digitize the processes in prioritized order, then the digital transformation starts with strategy and architecture and forward-thinking; then to make scenarios or risk assessments to map out the actionable insights.

One may see the digitization as a pre-burner or enabler for the next steps, but if the paradigm of the business model isn’t changed nor if the digital transformation isn’t led by the business strategy, then it will have a hard time to sustain. We often recommend in workshops to illustrate examples of both artefacts, simply to get to the open-ended dialog of ‘where are we heading’ versus ‘where do we want to move to’.

Clearly, to strategize and map out the actionable insights may involve implementation and change management. We can help you to succeed!

We power your digital MooD!