In this blog post we will cover the business change quadrant of the Digital Ready Model.
This step is often the hardest one to address. It is important to remember that going through a digital transformation process is really about changing the way we work and collaborate internally and/or with customers/partners. This requires us to review also existing organisational structures, processes and how we finance various parts of our business.
This is why a successful digital transformation initiative not only requires new tools or platforms, but also a real business change. With business change we mean a number of things that needs to be taken into consideration.
We will cover a number of the areas that we have deemed to be important based on experience in this blog post and in our Digital Ready Model:
- Self Service
- Impact on financing
- Impact on affected parties
- Measure change
- Measure results
We have already seen an increasing number of new applications (mobile, webb etc) being introduced in commercial and public sector organisations. This is due to the demand for the organisation to move fast to face new competition, take advantage of an opportunity or respond to new demands from customers or users.
IT departments are having troubles to keep up with this pace, which means that the business often turns outside of the company to find the support they need. This is often found by various SaaS applications or other cloud based solutions.
The problem increases when the business realise that they wíll need to connect the new applications with the backbone infrastructure and data of the rest of the organisation to get the full potential of the investments. It is time we realise that we can’t stop this development and that we need to find tools and procedures to support the business being as agile as they need to face all the future challenges of an ever faster moving surrounding environment.
The only way to achieve this is to go for ”Self Service”. With this we mean that organisations need to build a digital infrastructure that makes it possible for the business to get and deliver the information needed to fulfil corporate processes without having to build new integrations every time.
The way to do this is through APIs. The technology to do this is already in place and many organisations have already started projects to establish this digital infrastructure. The key here is however, not only to make this a new digital platform, but also to change the way we work with integration and make information available.
To really make ”Self Service” a successful concept in your organisation you might need to change the way parts of your organisation view how they share information and you might also need to change the way your business interoperates with IT when it comes to integration.
IT will never be able to keep up with all future requests for integrations and access to data. Make sure that the requested data is available in your digital infrastructure instead and teach you business to go there to find it!
Sufficient knowledge and competence is always an important factor to succeed with change projects. This is also very important when you introduce a digital initiative. It will not matter how fancy your digital infrastructure is or how you try to measure progress if you have not made sure that your organisation knows how to make use of new capabilities and participate in the ongoing change program.
Your organisation will also need knowledge to be able to break out of existing patterns and establish new ways of working. If you neglect this area, you will risk creating a situation where the organisation works against your iniative as they can’t see the benefits.
If you, on the other hand, make sure to educate your organisation on why and how this digitization process will play out you stand a good chance of creating advocates to help you drive the initiative and an organisation that works together with you, rather than against you.
Do remember that this needs to be quite an ambitious education plan, as you may need to educate not only the ones that are normally affected by IT changes, but rather a larger part of the organisation as Digital Innovation initiatives of today are designated to affect and have an impact of the whole business and its partners.
Impact on financing
New ways of working and new responsibilities that are implemented as part of a digital innovation initiative will also require new ways to fund various parts of the organisation and a different allocation of resources.
This is often a part of digital/change initiatives that is a bit neglected or tend to be forgotten. Since digital innovation initiatives often require an organisational change to reach its objectives, this also brings a need to review how budget and other resources are allocated.
When aiming for Self Service instead, this moves responsibility from IT to cater for all integration requirements to the business to enable and make use of data themselves. In order to do this, the business will require skilled resources and funding for them. To achieve this, budget and resources needs to be moved from central IT to business divisions instead.
This will create agility and enable business divisions to move faster, but it might also be painful for IT as the number of resources and budgets will decrease. A new way of working may also affect how you calculate business cases and measure impact. Don’t forget to take this into consideration when moving your digital innovation initiative.
For this part (as with all parts of the process) it is also very important to reassure that you have full management support. Issues like budget and resources will always cause a lot of discussion and frustration. To not get you tied up in these discussion or have this stop your initiative, you will need a strong management sponsor to guide these questions to.
With the right support, you will also not need to spend so much time to support or argue for your initiative.
Impact on affected parties
As already mentioned in above bullets, a digital innovation initiative must also include an organisational change. This will of course affect people. This is something that should not be underestimated.
As with all change projects, one must take into consideration how people or parts of the organisation will be affected by the proposed changes. If you don’t foresee and have a plan in place to handle this, you will face a big risk of meeting resistance for your digital innovation initiative.
If you work in a large organisation, there are probably already routines in place to handle change management. Use these for guidance or create your own plans to keep people informed on changes and engaged in your initiative.
Measure change and results
One way of keeping people engaged and informed is to measure change. With this we mean that in order to know if your initiative is moving in the right direction and generates the expected results, you will need to find a way to measure progress.
This will not only help you understand how your project is progressing, but can of course also be used for status updates to management and the rest of the organisation. You are more likely to gain the interest of management and your organisation if you can show real results.
As with other change projects this will probably also add to the ”snowball effect”, which basically means that people are more likely to participate and contribute to a project that is successful or generates real results. People simply wants to be on ”the winning team”.
Since your initiative is likely to cause some stir in the organisation, as it probably includes a significant budget and organisational change, it is of course even more important to find an efficient mechanism to measure results. Our recommendation is to try and find as simple as possible KPIs that are easy to measure.
These don’t necessarily have to show the ”whole truth” in just one KPI, but several easier to measure KPIs will give you the full picture of where your initiative is heading. It might also be that the KPIs vary over time. Initially you might be fine with just measuring how many APIs you have published in a self service portal or how many systems that consumes data from this portal.
Later on you might want to measure how many customers order systems that are directly connected or how much revenue you generate from your APIs. We have a few ideas on KPIs that you can use at various stages in your digital innovation initiative, but these normally have to be adopted to the unique situation and suited for your organisation.
The Digital Ready Model
We hope that the Digital Ready Model will give you some ideas on things that you need to take into consideration to make your initiative a success.
Do not hesitate to get in contact with us if you would like some more insights or assistance with your digital innovation initiative.