Digital transformation: A map for the path forward
This article was first published in The new IT playbook, a report that explores what it means to be resilient and adaptable in the face of disruption.
The current global disruption is affecting digital initiatives. It's forcing many organizations to reprioritize plans with a renewed focus on expected outcomes, while bolder companies are elevating digital ambitions to seize emerging market opportunities.
As organizations retreat to a minimum viable operating model, they are also observing their industries' broad response to the disruption, trying to determine if they are facing a new normal that repositions how they connect to customers, citizens, and employees.
The key question is whether industry responses have the potential to survive beyond the initial phases of the crisis. Are they, in retrospect, a better way to build a resilient business model for the future―which leads inevitably to the heart of the diagnosis: whether their own digital ambitions are constructed in a way to maximize this new potential.
Examples of how digital engagement models are redefining experiences are plentiful: companies undergoing a massive redistribution of their workforces to remote work, museums offering virtual tours, hospitals using car parks as virtual waiting rooms, movie releases bypassing theaters and heading straight for home streaming services, and telehealth becoming more common.
The common thread is the use of technology platforms to digitize the physical world and project the experience into the digital world. The increased penetration and consumption of digital commerce in this time will help "translate into sustainable, long-term growth," said Maggie Wu, CFO at Alibaba, in a recent article. That means now is the time to double down on initiatives that can help redefine the digital experiences you can offer, supported by increased digitization of the physical world.
If you're up for the journey, you're going to need a map. The approach below will help you reprioritize digital initiatives and plot a path forward.
The digital edge emerges
In our model, we start at the edge, deconstructing your digital ambition into two key journeys.
The human edge: The first journey at the edge is focused on people. It is an exploration of ideas that seek to redefine the experience through digital engagement. It forces you to describe the person that will benefit from your idea―their likes and dislikes, their pain points, how the idea will change the way they live or work. Ideation and design-thinking techniques can help unlock the riddle of defining compelling new digital experiences. Be clinical about defining the "day in the life" of the persona you are addressing.
Don't fall back on tried and tested ideas. Look for innovative, outside-the-box thinking, and work with an ecosystem of partners to help explore the potential of technology to fundamentally offer something differentiated and unique. Offering the experience through digital engagement is a delivery vehicle that is immune to social distancing and stay-at-home policies.
The physical edge: The second journey at the edge is the applicability of data that can be created and exploited by digitizing the physical world. Can digital insights be used to drive the experience? Can those insights provide a chance to apply new levels of control to your physical spaces or assets?
Increasingly, autonomy of your edge will be enabled through this journey, and that autonomy can be an extremely powerful ingredient in the ideation of new experiences. With greater autonomy comes a reduction in the need for personal intervention. Robotic process automation and other technology-enabled strategies are steps to enabling full autonomy.
The digital edge: Connecting these two journeys at the edge will help shape your digital edge―the convergence of digital experiences that are contextually unique to you.
Why have these journeys seen an increase in business interest? Organizations that invest in these edge journeys are able to continue to build and deliver value, stealing market share from traditional competition during operational crises.
A cloud-enabled supply chain
Organizations need a new cloud-enabled supply chain to back up the ambition at the digital edge. Moving to cloud-native application development and leveraging API-driven microservice architectures can increase agility and time to value. Once again, there are two distinct journeys, which also have the potential to be interlocked to create compound benefit for the organization.
The first journey is to renovate legacy platform architectures and convert the IT supply chain into a more agile and scalable services engine. This is powered by a shift to software-defined and cloud-based service delivery models, which is required to address the siloed nature of legacy back-end architectures.
As organizations move to explore the scale of the digital edge, it is possible that the transactional systems that support core functionality―such as ordering, payment, supply chain, ERP, HR, and finance―will struggle to cope with the unpredictable demand. From online shopping to unresponsive e-learning platforms, many of the back-end systems and services that underpin these experiences were not designed to scale on unexpected demand. They were designed for a maximum usage, which was estimated at build time, or incremented based on average use patterns.
The second journey is to unleash the talent of cloud-native app developers, enabling them to speed up time to value and adapt to quickly identified requirements. Linked to the strategy of the first journey to modernize the core, this path lays the foundation for how organizations can quickly establish and test new products and features and quickly pivot to the most adopted and successful services.
Equipping developers with instant access to build and test environments as well as the curated set of tooling and data models can support experiments in new digital engagement models. Moreover, development of a repeatable services library can grow into an ecosystem play and potentially open up new platform-driven offerings by organizations in the future.
A cloud-enabled enterprise that automatically leverages cloud architectures to scale and load balance on demand, coupled with a developer's ability to fine-tune service delivery at speed, can solve much of the back-end and innovation constraints of digital disruption.
The two major technology business goals of the digital edge―the customer experience and the cloud-enabled supply chain―converge through three major common enablers that exert demands into a common pool of digital capabilities. These are journey enablers, without which the ambition of any one of the four main journeys above cannot be realized. The three journey enablers are:
The first enabler is the ability to derive intelligence from data. That means exploring the world through new techniques to capture, consume, and process the zettabytes of data created. It also means leveraging constantly evolving and emerging techniques, some of which have already hit mainstream, such as natural language processing (who doesn't enjoy talking to Alexa?). Artificial intelligence in all its many forms is at the spearhead of this enabler, and organizations are increasingly turning to data scientists and high-performance compute solutions to help get answers to questions they didn't know to ask. This intelligence can be applied to all four of the major journeys described above, from offering personalized services to customers to embedding cognitive services.
The second enabler is the underlying operating model. Ultimately, the biggest pinch point for organizations looking to establish a new normal, one that is digitally enabled, will be the need to evolve operations to make sure the full value of any digital ambition can be realized. This might involve cultural change programs, reskilling programs, or changes in metrics to drive new behavior. Managing the change of the operating model will be the single most essential ingredient in any digital aspiration. Remember to bring your people with you as you transform―they are your biggest capital asset.
The third enabler is the ability to establish trust. Trust comes in many forms and is enabled through a variety of technologies. Regulatory compliance and data privacy are top of mind for CxOs and now moving into new areas such as data ethics. Establishing trust in your industry and between partners and customers is more than a security response; it's about your organization's brand―how it's perceived and how it's reported on. Networking, security, compliance, and legal teams must be closely tied to outcomes to ensure that trust is at the heart of your value proposition. The trust model established will inform and support all four of the major journeys described above.
Sitting behind this model is the question of how to leverage an as-a-Service model. This is not restricted to the way in which technology is consumed in the supply chain, but it is just as significant and impactful as companies explore and experiment at their digital edge. Offering new services in a subscription mode is a critical business model principle that can create better customer experiences and increase retention. Consumption-based pricing models can allow investments to flow alongside usage―paying only for what is actually used.
This economic lever to dampen upfront capital required to progress is a critical ingredient. An as-a-Service model also creates deeper relationships and partnerships that will sustain organizations during periods of crisis better than transactional relationships. This means that delivering services that also have an as-a-Service offering can make them more relevant to customers in times of economic instability.
The final map can be constructed as a helpful tool to navigate digital transformation agendas, even at a time when the way we live and work has been so fundamentally disrupted.
Plot your own journey
This digital journey map is an essential tool to navigate through disruption. Use the framework to help articulate, visualize, and plan a path. Overlay your digital initiatives onto the map and look for dependencies, risks, and prerequisites across the map to help de-risk the path to value realization.
Plotting your own journey through the map will also expose relationships that may not have been apparent at the individual initiative level. It is only when multiple initiatives are mapped together that the congestion in the middle of the model becomes apparent, and that can help avoid duplicate efforts and de-risk the path to value. The digital journey map helps streamline transformation plans and ensures you connect value creation to value delivery strategies that are central to your business model. It also provides a sanity check on how digital initiatives will be supported by the three common enablers and forces you to make strategic decisions about the input and output of those initiatives, including observing them through the as-a-Service lens.
Path to value
There are a number of lightweight and rapid follow-ups—some that can be experienced virtually—to the basic concept of the digital journey map. The map helps unlock a variety of problem statements companies often have in their own unique journey:
- Activate: How do I visualize and communicate my digital ambition to my key stakeholders? Clear communication and easy visual representation through the use of models is an extremely important step in transformations. Aligning behind this common model as a vehicle to articulate your own journey is immensely powerful.
- Align: How do I de-risk the path to value across multiple initiatives? Here the map uncovers the dependencies, risks, and prerequisites between different initiatives that all start from one of the big four journeys. By isolating the common enablers for an initiative, it's easy to start to de-risk the path to value by connecting initiatives together and avoiding duplication.
- Advance: How do I create a unique and compelling value proposition with technology? Emerging from this pandemic with a unique and new offering requires ideas, and those ideas need to be compelling to warrant investment. Here, design thinking and ideation techniques help organizations explore how technology may enable a new wave of innovative offerings.
- Accelerate: How do I get started with a new initiative? What are the key building blocks? Leverage a wealth of insights into what digital capabilities will be required to deliver value faster in your initiative. Stop spinning up lengthy and costly proofs of value―get to a minimum viable product with the minimal number of steps.
This article/content was written by the individual writer identified and does not necessarily reflect the view of Hewlett Packard Enterprise Company.