In this article we will explore 4
building blocks of digital transformation, they are the catalyst for
transforming today’s enterprises to digital enterprises.
Building Block 1: Managing the
risk of accelerating information
The first strategic building
block in digital transformation is risk. How should your organization
manage the risk of accumulating too much information? Organizations
began to realize that they needed a strategy to find, produce, and
protect their information assets. This includes formal records like
contracts, as well as informal communications like emails and instant
messages.
In addition to this new legal
requirements to safe guard digital documentations, most companies also
face industry-specific laws and compliance requirements tied to how they
manage information. For example, healthcare organizations must
demonstrate compliance with HIPAA. Public companies must demonstrate
compliance with Sarbanes–Oxley. The new Dodd-Frank reform legislation contains
a host of new information-related requirements. These kinds of unique
rules exist for just about every industry. Adding to the complexity
of any organization that operates at scale, they also vary by country.
Data leaks and security breaches have
magnified these concerns. The list of front-page security breaches and
information management disasters gets longer by the day. Think about the
Target, Home Depot, and Sony hacks. These problems are not just
embarrassing; they directly impact credibility, trust, and value. And
yet despite all the evidence and a lot of good intentions, organizations
still have major problems securing their information.
Managing information risk is a
first key element in building a strategy for digital transformation.
The next element is reinventing and
automating your business processes.
Building Block 2: Transforming
and automating information-intensive business processes
The second building block in building
a strategy for digital transformation is process automation. How
should your organization transform and automate its information-intensive
business processes? The walls that used to exist between your customers and
all those messy, back-office business operations are being torn down by
social technologies. Organizations can no longer hide the weakness in
their processes. The next five years will witness a massive reinvention of
business processes. If the first wave of automation was all about
digitizing existing processes, the next wave will be much more radical and
involve the actual reinvention of processes from the ground up.
AIM data suggests that
organizations still have a significant gap between what their customers
see, their external-facing systems of engagement, and how business
actually gets done, their core back-end systems of record. Organizations
understand that they have to automate, and they need to expose their
back-end processes to the light. 68% of organizations agree that
business at the speed of paper will be unacceptable in just a few
years. Getting there, though, is quite another thing. The amount of
paper still used in your business processes is a good indicator of
how far behind you are.
For example, in 25% of
organizations, the volume of physical paper is increasing instead of
decreasing. Even when organizations deploy scanning technologies to
reduce their use of paper, 16% of the original paper documents still get
photocopied before scanning, and 65% of those documents are not destroyed or
recycled after scanning. In other words, the paper still survives and
keeps piling up. Even business processes that many think were
automated a long time ago still use significant amounts of paper.
For organizations committed to
financial automation, 44% of their invoices typically arrive in
electronic form, yet 59% of those digital invoices will still end up as a
paper copy. So reinventing your core processes is clearly critical to
building your digital transformation strategy.
Building Block 3: Engaging
employees and customers
The third building block in
building a strategy for digital transformation is engagement. How can
your organization use information to better engage customers and
employees? In this new world of rapidly changing information
technologies, our ability to engage is the key to success. If you're not
fully engaging your customers, your partners and your employees, your
business is probably falling behind the competition. You can no longer
assume that engagement will happen serendipitously in your organization. You
need to think strategically about the information systems that are
necessary to make it happen.
According to Gallup, in Average
Organizations, 33% of workers are engaged in their jobs, 49% are not
engaged and 18% are actively disengaged. On the other hand, in
World-Class Organizations, the numbers are vastly different. 67% of
workers are engaged in their jobs, 26% are not engaged and only 7%
are actively disengaged. In far too many organizations, collaboration is
just another name for sending around big attachments on email to a
long list of recipients asking everyone to comment and then sending those
comments via a reply all message. Social technologies give us a way
to rethink and reinvent this, and directly tie collaboration to your
business processes. There's also a critical need to rethink how we
engage with customers. Most organizations have a thin veneer of social
engagement. They have a Twitter account or a Facebook site or a
mobile app.
The challenge moving forward is
that most of these systems are basically just a veneer, unconnected with
the core back-end business processes. Everyone has experienced the call center
from hell, where you wait in a long queue for a real person only to
have to constantly restate information to all of the various people with
whom you speak. Organizations have long had a challenge with building
a 360-degree view of the customer. In an era of radical transformation, this
problem is getting more pronounced, except now the customer has social
power to immediately tell the world when they've had a bad experience
with your business.
Engaging with employees is not
the same as engaging with customers. Senior executives often confuse
them, and this is reflected in AIM survey data. 54% of organizations
are finding the rapid convergence of collaboration and social tools to be
very confusing. 65% of organizations say that their employees struggle
to access internal information from mobile devices. 50% of organizations
believe that they have shortfalls in technical support for internal
collaboration.
And 42% of organizations struggle
with rationalizing the many ways customers engage with them and
connecting these inputs to key business systems. Connecting with customers
and employees is critical to building your digital transformation
strategy.
Building Block 4: Integrating
analytics and big data
The final building block in
building a strategy for digital transformation is insight. How can
your organization get business insight out of all the information you are
gathering? Organizations of all sizes are struggling with how to
extract insight and mitigate risk relative to the massive volumes of
information and data that they're accumulating. This isn't just a
question of big data. It is also a question of dark data trapped in long
forgotten repositories, often without accompanying metadata. This is
content and information that just begs for the light of day through
semantics and analytics.
Big data initiatives to date have
been almost exclusively driven by IT. These initiatives are focused
on the question of how do we apply technology to manage large volumes
of data? And that's where cognitive computing comes in. Cognitive
computing operates in natural language, makes evidence-based recommendations, and
is not bound by volume, by memory, or by format. This technology creates
an entirely new set of opportunities for organizations to understand and
interpret the data they have.
These tools allow you to move
beyond the sheer volume question and ask what kinds of questions and
hypotheses we should be testing with our data. In other words, how
does insight into our data change the very nature of the questions we ask and
the hypotheses we form in our businesses? Almost all Analyst data suggests
that most organizations are still in the very early stages of this
transition. Forty-seven percent of organizations today feel that
internal search and e-discovery is becoming impossible, given their volume
of data.
For 71% of organizations, search
is vital to extracting insight, yet only 18% have cross-repository
search capabilities. For 34% of organizations, big data will be an
essential capability, but they face enormous challenges in connecting, in
linking, and in supporting systems.
So if the four building
blocks of a digital transformation strategy are risk, automation,
engagement, and insight, what kinds of skills do we need in our
organizations to address them? We'll explore this question in our next
article.
Cheers
DC*
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