Is your digital transformation process truly transformative?

Digital transformation is what big data was for organizations just a few short years ago. Everyone is talking about it, and organizations are scrambling to make sure it is a strategic initiative by having some sort of digital transformation process.

Just like big data, the term digital transformation gets its popularity from the size of its potential impact rather than being a new tool for improving operations. Since the first days of robotic automation in manufacturing, people have been using technology to improve and simplify work. Now, we are shifting the use of technology to a wider array of complex work, such as customer interactions, reporting and decision-making.

There are several reasons for this increased attention to digital: the pace of disruptive technology, the need to do more with less, the need to maintain competitive advantage and, above all, the need to be more customer-centric. Though digital tools and technologies significantly affect the way business is conducted, many organizations continue to struggle with them or struggle to put into place a comprehensive and effective digital transformation process.

Why are organizations struggling?

A report on the 2015 global digital business survey conducted by Deloitte and MIT Sloan Management Review said “maturing digital businesses are focused onintegrating digital technologies, such as social, mobile, analytics and cloud, in the service of transforming how their businesses work. Less-mature digital businesses are focused on solving discrete business problems with individual digital technologies.”

The root cause of organizations’ struggles seems to start with a key word — transformation — that often either gets overlooked or misinterpreted. Transformation can be defined as a significant organization-wide change that orients the organization in a new direction. This can include a change in its business or operating model. Transformation, however, is not merely an incremental improvement or transition to a new system or application.

Unfortunately, many organizations are not embarking on transformations. Instead, they are solving discrete business problems with digital technologies. This means they are creating one-off solutions for a single business problem rather than looking at an integrated approach to solve multiple business problems. Because these types of projects have digital components, they get mislabeled as digital transformations.

When this occurs, organizations struggle because the digital transformation process lacks an overarching purpose and plan to tie the efforts together. Ultimately, this lack of an overarching strategy results in confusion among those tasked with execution because they don’t know the following:

  1. What’s in. There are often no parameters or criteria to define what parts of the business need digitization projects or to help scope and prioritize efforts. For example, an organization that wants to use digital technology to improve its finance function will have no guiding criteria to help pinpoint which processes should be automated.
  2. What the right solution is. There are no criteria for determining the fitof the plethora of solutions available. Without clear goals, the organization can’t clearly articulate what features it needs, potentially resulting in overbuying or making expensive modifications afterward.
  3. How the pieces will fit together. There is often no holistic perspective on digital projects to help the organization understand the intersections and interdependencies between projects and the work they are accomplishing. This can result in post-implementation integration projects and add-ons.

How to tell if your efforts are transformational

Understanding the difference between a digital project and digital transformation is easier said than done, especially given that digital transformation should be comprised of interconnected digital projects.

However, strategy, rather than technology, should be the guiding principle of the digital transformation process. Additionally, digital transformation tends to hinge on two characteristics: a focus on customer experience and its organization-wide impact.

The purpose of digital transformation is creating value, and that includes for the customer’s experience. Hence, organizations not only need to understand their customer’s journey, but must also use the impact on customers as one of the key criteria and measures of their digitization efforts.

The transformative work of an effective digital transformation process requires looking from the outside in, and that includes value chains and cross-functional, end-to-end processes. To ensure organizations stay focused on the end user, digital efforts must help break down operational silos and improve collaboration for managing customer value.

To categorize the initiatives in its digital transformation process, each organization should ask itself these four questions:

  1. What’s the value to the customer? Is the effort focused on creating customer value, and is that value clearly quantified to measure success? If the focus is on the steps and efficiencies of a business process and not on establishing the customer value, it’s not transformational.
  2. Are we changing how we work? Is the initiative going to change how we conduct business or does it simply apply a new technology to how we’ve always done things? As noted earlier, there is often a misconception that digital tools are equivalent to digital transformation.
  3. Who’s involved? Is the effort limited to a specific business silo — e.g., marketing or finance? Because transformations are organization-wide, they are cross-functional by nature.
  4. Why are we doing this? Transformations are focused on changing how the organization conducts business in an effort to create value. If the focus of the effort is solely on cost reduction, then it’s not transformational.

Though only a high-level start, the answers to these questions can help organizations start to clear up some of the confusion around their digital transformation process.

 

Source: TechTarget-Is your digital transformation process truly transformative?

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Connectivity is the key to digital business

A frequent theme of this blog is my disdain for jargon, but sometimes one has to admit defeat. I battled for years against what today we call “outsourcing governance,” arguing it was not governance at all, and I had the dictionary definitions to prove it. I thought “cloud” was just a euphemism for the way companies could repackage existing assets, and that the only new capability it offered was dynamic provisioning. And don’t even get me started on what passes for “innovation” in the outsourcing industry.

And, yet, I am at a loss for words to describe the age upon us. I suppose most of the world has begun to call it “digital,” but, to my ear, this doesn’t fully capture it. Among friends, I’ve started calling it “the age of inter-everything,” enabled, of course, by the inter-net. In the end, it’s not the name that’s important. It’s the fact that most enterprises are missing the boat.

Here is my manifesto for how organizations will gain competitive advantage starting today:

The future is about connectivity. Most of the darlings of Wall Street and the business media own few assets. Instead, they make connections. You know the ones: Uber, Google, Apple, AirBnB, AliBaba. The companies that will win going forward will use technology and a deep understanding of human behavior, enabled by analytics, to constantly make new connections. These connections could be between systems in the traditional sense, but they also will be between people. They definitely will be between systems and people. They also will be between providers, companies, governments, regulators, communities and even competitors. These connections will be continually redefined; the ones that are made today may not be as valuable as the ones made tomorrow because, by their very nature, networks add value when they expand.

So the enterprises that win will be able to connect and disconnect with blazing speed. Most of us already understand the value of the inter-connected world, but many of us struggle to make and break those connections at the speed the market demands.

By connecting data, systems, analytics and human behavior, an agri-business enterprise will be able to offer a tailored seed solution for farmers to optimize their crops every year; oil and gas companies will be able to optimize production for demand in ways they haven’t been able to do before; a healthcare insurance company will be able to identify risks and illnesses even before their patients do; a chemicals business will be able to develop compounds their manufacturing customers don’t even know they need yet, and life sciences companies will be able to deliver safe, proven drugs to market far faster than they do today. Enterprises that want to be relevant tomorrow need to ask themselves: what new connections can we make?

Long before we had enabling technologies like the Internet of Things or machine learning, famous designer Charles Eames said, “Eventually everything connects—people, ideas, objects. The quality of the connections is the key to quality per se.” This idea will be the defining characteristic of our future.

Source: Cio.com-Connectivity is the key to digital business

Cloud computing delivers on outsourcing’s promise of cost savings

I try always to avoid answering an enterprise client’s question with “it depends” because it makes me sound like, well … a consultant. Companies searching for answers to their problems may want a range of possibilities, but they don’t want an imprecise answer.

The reality is, sometimes “it depends” is the best answer. Let’s take, for example, the cloud—the most tested and most proven of the new digital technologies. It used to be I could answer the question “How much will I save by outsourcing my data center?” with a very precise estimate subject to actually going about it the right way (which is my job).

But the cloud is still young enough that I can’t do that. I’ve seen some companies save more than 75 percent by moving aggressively to the cloud. And I’ve seen others save absolutely nothing. There are technical, procedural and human reasons for the variance, about which an entire book could probably be written. But by the time I do that, the technology would have changed. So, instead, I thought I would share some of the key issues that impact today’s cloud initiatives:

1. Don’t build it, for they will not come. The most successful enterprise cloud initiatives look at their applications first, and then look for reasons why each one should not move to the cloud. Not only does this make sense, it avoids the waste of engineering a solution for functionality that, for good technical or regulatory reasons, might never make it to the cloud. This works well, say, for the applications and infrastructure that support a utility company’s nuclear business or a manufacturer’s classified defense programs. And it is why application-first approaches are far more successful.

2. Consider what you are replacing. If you replace your 20-year-old car with a brand new one, you will immediately notice the difference in efficiency, performance, technology, packaging and safety features. The cloud is similar: the more outdated the legacy stuff, the more likely you are to see big differences in performance and significantly reduced cost to operate. But unlike a new car, the cloud doesn’t require a cash outlay to get started. It’s more like a zero-percent-down lease.

3. How do people feel about it? Most people agree “feelings” should not play a part in business decisions, but I’ve seen that they do. Most technologists enjoy tinkering with new tools and seize the opportunity to become skilled in the latest solutions. But a significant number of their peers are resistant to change and are vested in preserving the status quo. Among the most frequent mistakes I see enterprise buyers make in their cloud initiatives is ignoring or underestimating the need for organizational change management.

4. Get real about the objections. Of course, some obstacles are legitimate, but organizations tend to accept “no” too quickly. The regulatory obstacles are not as big as they seem, and the pace of change in technology means the architectural ones aren’t either. The best way to guarantee you get no benefits from the cloud is to block the programs that promote its adoption.

I’ve come a long way from being a cloud skeptic myself. While I still maintain that dynamic provisioning and smarter application architecture are the true innovations of what we call “the cloud,” arguing the semantics is beside the point. What I do believe is that cloud solutions do a better job of delivering on the promise of outsourcing than outsourcing itself. Deploying an up-to-date, standardized, flexible, cost-effective, constantly improved and shared asset on behalf of corporations has been outsourcing’s pitch from the beginning. But it took this thing we now call the cloud to deliver on that promise, even though, as they say, results may vary.

Source: cio.com-Cloud computing delivers on outsourcing’s promise of cost savings

Why offshoring doesn’t matter

Recently, an enterprise client was debating whether the offshoring ratio — the percentage of resources located off versus on shore — proposed by a service provider was too high, too low or just right. About a half-hour into the conversation, I realized we were asking the wrong question altogether.

Trying to discern what constitutes too much risk when it comes to offshoring has been a common exercise for years. After all, the cost implications are significant. Service providers tend to get aggressive with offshoring because a) they have more people there, and b) it allows them to present a lower total cost when competing for business. Sourcing buyers, however, especially less mature ones, feel more comfortable with a larger onshore presence and may or may not understand how it impacts their business case.

Does the question about percentage of resources offshore matter? I’d say, not very much.

The world has changed. First of all, most providers that work with Fortune 500 clients are large and experienced — they are not in the business of taking on more risk than is reasonable. More importantly, as long as they commit to service levels their customers find acceptable, who cares where the work takes place? The challenge, contractually, is to make sure service levels trump all else to keep the provider focused on what does matter.

But the real reason the offshoring question doesn’t matter is because it is an obsolete one. It asks: Do you want expensive human resources close to you or do you want cheap human resources far away from you? And the answer to both of these is no. What you really want is a non-human resource. You want to automate as much as possible so human creativity can make a difference elsewhere, where it counts.

When software robots reduce the volume of work related to repeatable processes, humans can then focus on what the robots cannot do. Instead of counting bodies, you want an aggressive rationalization program that reduces the number of applications you have to maintain (and thus the number of people maintaining them, regardless of where they sit). You want strict compliance where it matters — places where robots are demonstrably better than humans — and extreme creativity elsewhere. (Some humans still have the edge here, but they are rare, and you should hire them wherever they are.)

It will take time for companies to move away from the obsession with offshoring ratios and what they consider to be the risks they pose. Today’s outsourcing buyers and providers should be asking a different kind of question about risk: What are the risks of not automating these functions? And what new risks does automation create?

The offshoring debate is yesterday’s debate. We need new incentives to encourage no-shoring — an environment where physical location is meaningless because code does the work.

Source: cio.com-Why offshoring doesn’t matter

How application development and maintenance has become a loss leader

Few providers and their customers have noticed it, but Application Development and Maintenance (ADM) has become the loss leader in IT Services.

With everyone scrambling for everything digital, enterprises now are focused on how to buy the next generation of technologies, not how to support the last generation. Maintenance was already low on the totem pole and has become highly automatable, but agile, cloud, ready-to-buy platforms and other advances have eroded the status—and the margins—of development. ADM has to be a loss leader now, not only because it is suffering from low demand, but because it is what allows service providers to walk the right customer halls in search of digital opportunities.

Digital initiatives, while highly valuable, tend to be smaller in scale. ISG’s preliminary research shows that about 85 percent of them are under $5 million. Competition to land these deals has heated up, especially with an exploding ecosystem that offers literally thousands of choices beyond the large service providers. Most of the time, enterprises will choose from their existing providers, so being already “in the building” is an enormous advantage when it comes to capturing digital market share.

If you are an enterprise buyer, congratulations! You have a new source of leverage. You should expect that your service providers will automate your ADM portfolio aggressively to lower your costs and free up funding for digital programs. You also should expect those same providers to showcase and demonstrate their digital innovations and investments so you are aware of what they have to offer. But you also must follow through on the promise. If they meet your expectations at streamlining the old portfolio, you should reward them with helping you build the new.

If you are a service provider, your situation is trickier, but the path is still clear, because if you don’t reduce the unit costs of ADM services with disruptive technologies, someone else will—and you will lose that all-important ability to walk the halls. But cannibalizing your own ADM revenue isn’t enough. You must be willing to invest in digital showcases, and be assertive in bringing innovation to your client.

Even more difficult, you must be willing to collaborate with many other technology companies that have built point solutions and/or superior technologies; since many of them are small, you also must know how to find them. Then, you have to figure out a way to make money when, at best, you have a primary orchestration role in a complex digital ecosystem.

And finally, you must re-invent account management to speak to business benefits that appeal to different buyers, while drastically reducing the cost of sales—the old model simply won’t work for these smaller deals. If you do, you will not only replace the revenue forgone in traditional ADM, but you will give yourself opportunities to grow for at least the next decade.

All of this only works if enterprises and their providers have honest, transparent conversations about the future. The temptation to try someone new will be enormous for the buyer, but they shouldn’t discount the institutional knowledge of an existing provider as a benefit; remember most of the barriers to digital transformation are human, not technological.

And providers will have to step up their game—speak to business buyers about business benefits, while taking on some risk and showing they have the digital chops to play outside their old sandbox.

The shifts are subtle, and there’s money involved, but get them right, and together the buyer and seller can build a sustainable digital business relationship.

Source: cio.com-How application development and maintenance has become a loss leader

AI & Automation are playing a major role in transforming businesses

Criticization and appreciation is a part of the game. And, something similar is happening with disruptive technologies such as Artificial Intelligence (AI) and advanced automation. Many see it as a force of change which will lead to growth, whereas few others criticize disruptive technologies for being the reason of job loss.

Putting aside all such debates, it is high time to admit that disruptive technologies have led to new forms of competition and it has become imperative for businesses to duke it out. However, if we turn history pages, we will be convinced that automation has always led to the creation of a new set of jobs. It is only that transformations in technologies demand patience, as it takes some time for the transition waves to settle down.

Similarly, advanced automation and Artificial Intelligence (AI) are in its stage of evolvement but at the same time, it has also encompassed people, businesses, and economies. It opens the world of enormous opportunities – where businesses can evolve at an incredible speed and the workforce can learn new skills to perform modern-day business operations.

According to a report published by Accenture, “companies that will grow and dominate their industries will be those that systematically embrace automation across their organizations using it to drive the changes to their products, services, and even business models as they continue to transform themselves and their industry.”

Advanced Automation Set to Change Business Landscape

Processes are becoming efficient, dependency on the human workforce has significantly reduced, tasks are being completed with more accuracy and precision, customers get an engaging and interactive platform – Artificial Intelligence (Ai) and advanced automation are changing the business landscape at an unprecedented speed.

It won’t be wrong to say that these disruptive technologies introduce a paradigm shift in the way companies function and the human workforce carry out diverse business activities. Enhancing efficiency is not the only aim, but with advanced automation, businesses can go beyond traditional boundaries of maximising productivity and profitability. Disruptive technologies rather support in long term growth of business organizations, where main focus lies on building a personalized relationship with customers, becoming a brand, delivering true value and enhancing customer loyalty and retention. In short, disruptive technologies such as intelligent automation enables business in remaining fit for even future performances.

Time for Humans to Team-Up with Their Digital Co-Workers

Gone are days when humans guided machines to perform various business operations. With cognitive abilities turning into a reality, it is the automated business system that guides the human workforce. Programmed machines are now performing tasks exactly as a trained employee. And, in some cases better than them.

With cognitive abilities, advanced automation solutions enable the business system to analyze and respond in an urgent situation. This gives businesses a responsive platform, which supports businesses in eliminating performance bottlenecks both inside and outside the organization. As a result, streamlined process supports in seamless business workflow, which significantly helps in achieving organizational goals efficiently.

It is high time the human workforce must team-up with their new digital co-workers. And, it can bring innumerable benefits for them. Programmed machines share much of the workload; employees get an opportunity to learn new skills required for modern business processes; advanced automation saves much of their time, which enables them to be more creative while performing diverse business tasks.

Benefits that Businesses Can Gain

Technologies have always supported business organizations in performing operational and productional activities. But with evolving technologies such as advanced automation, it is time for businesses to reap innumerable benefits.

Advanced automation solutions are designed with advanced business models such as SaaS, Six-Sigma, and Lean production. There various proven business models together play a key role in cutting operational costs. By enabling in updating the business system with the latest development in technology, ability to control entire business activity even from a remote location, supporting in optimum resource utilization and many more – advanced automation solutions in cutting costs by a great margin.

Disruptive technologies are being widely recognized for making business processes robust and efficient. With approaches such as Six-Sigma businesses can ensure that tasks are completed within allocated budget and time; variations in finished product and other services are kept to a minimum level, and most importantly it supports in reducing the error-rate. Lean production, on other hand, supports in eliminating wastes from processes which further aids in achieving organizational goals successfully.

Besides, advanced automation also enables in creating an interactive and engaging platform for customers. With automated processes such as Sales and Marketing, businesses can ensure that customers are informed of sales, discounts and other promotional offers right on time. Customers can put their queries and businesses can deploy advanced measures for an instant solution. This encourages customers to be loyal and also largely impacts their buying decision.

Therefore, it won’t be wrong to say that disruptive technologies enable business in performing robustly at all fronts. With competition getting steep, technologies such as advanced automation is key to success as it can play a larger role in delivering complete satisfaction to customers.

AI and Automation Is the Greater Force

With advanced automation technologies transforming businesses at a breakneck speed, leaders are set to gain a wider market share. As the report published by Accenture further informs “Intelligent automation will enable enterprises to innovate and evolve by increasing their agility, reducing the complexity of systems and operations, accelerating their time to market, and creating the ability to experiment continually with new products and services.”

In the prevalent technology-driven environment, businesses cannot grow using traditional business approaches. They should rather adapt to the change introduced by the new age disruptive technologies. Embracing intelligent automation, companies can drive demands and can successfully deploy advanced business methods to fulfill customer preferences.

Technological solutions are playing a larger role in transforming businesses and is helping them in securing long-term growth. But what matters is – how soon business leaders realize this fact that AI and intelligent automation solutions are the greater force, which can in no way be overlooked?

Source: itproportal-AI & Automation are playing a major role in transforming businesses

Digital done wrong

For readers in the U.S., the following is an all-too-familiar—and painful—story I need to tell to make a point. Warning: reading this may raise your blood pressure or tie your stomach in knots.

Jeannie is a middle-aged woman who takes medication for two chronic conditions. She will likely take both for the rest of her life and is grateful for her employer-provided health plan.

Because of the long-term recurring nature of these medications, her health insurer insists they be purchased from its in-house mail-order pharmacy. One of the medications is generic and inexpensive—it has been around for years and is supplied by the normal pharmacy in 90-day intervals. The other is a brand-name, recently launched drug that costs almost $3,000 per month and is supplied by the insurer’s specialty pharmacy in 30-day intervals.

On any given day, Jeannie may receive a robo-call from the insurer stating one of her prescriptions is ready to be shipped, but they must speak to her to confirm her order. She thinks this is likely the more expensive, brand-name drug she takes, so she immediately presses the button to be connected to an agent. The Interactive Voice Response (IVR) system takes her information, including her birthday and ID number, and she is quickly connected to an agent. The agent immediately asks for the exact same information, and then asks her what she is calling about.

Jeannie says, “Actually, you called me! But I suspect it’s about shipping my regular prescription X.” The agent responds that her request is handled by the specialty division and needs to transfer her call. This happens quickly, but the new agent again asks for the exact same identifying information before processing the order. Jeannie wonders why the smartphone app she was asked to download by her insurer doesn’t make this any easier. Days later, Jeannie receives an email from her insurer asking her to call in. Thinking it might be about the second medication, she calls and repeats the process of providing the same information three times to a machine and two people. At this point, she discovers it is about the same drug she already addressed in her first call! A few days later, she gets the same email, judges it to be yet another repeat, and ignores it.

A few days after that, she gets a letter in the mail saying the company has been unable to reach her and is unable to fill a prescription unless she calls immediately. She does call, goes through only the two-step process (the specialty pharmacy isn’t needed in this transaction), and her other prescription is filled.

She again wonders why she can’t handle all this on the app, which uses fingerprint recognition for extra security. She investigates on the website and it turns out she can refill her generic directly on the website, but not on the app. The specialty drug requires a phone conversation and cannot be filled by website or app—so she is stuck with two processes.

Jeannie goes through this tedious exercise at least once a month. Almost always, within a few days, there is a follow-up call to survey her on her experience. A heavily accented voice reads a script. When she is able and willing to answer, she gives the call center rep detailed feedback on how to streamline the process for her: “Tell me which drug we are talking about, verify my information only once. Better yet, let me do everything on my smartphone and save us both some time!” Nothing changes.

Here comes the point: The irony is the insurer has all the tools at its disposal to provide a successful omnichannel digital experience. It is hindered by what are obviously some legacy processes and organizational silos that just don’t make sense.

As with so many digital stories, the technology to make this a great experience is all there—the barriers are human and organizational! Why hasn’t anybody noticed that fingerprint verification is easier (and more secure) for both the customer and the company? Why hasn’t anybody written code to alert the agent that the person on the other end is responding to a call from the company? Why have two completely different divisions deal with the same customer’s medication?

CIOs that want to stay relevant must understand that digital experiences have to start with the customer and work backwards into the enterprise. The enabling technology is, in most cases, already there. Is your company willing to make the hard changes required to go digital successfully?

Source: cio.com-Digital done wrong