Lopsided Digital Transformations

Can confirm this in the large enterprise.  Broadly done in supply chain world, uncommon in marketing.  Depends on things like data access, expectations around automation.  

Digital Transformation Is Lopsided, Even Within the Same Organization

By ZDNet, December 29, 2020

An unbalanced structure.

A study of organizations in Harvard Business Review found that some corporate departments can be more digitally advanced than their counterparts at another location, or even down the hall. The IT department itself often finds itself on the wrong side of progress.

A Harvard Business Review study of organizations found "a growing divide between teams with ready access to automation and [artificial intelligence (AI)] tools and teams without," with the latter trailing "in terms of productivity and AI skill development."

Accenture's Ramnath Venkataraman and colleagues determined that two-thirds of investigated companies relied on a less-than-optimal blend of cloud-based and on-premises enterprise solutions.

Exacerbating the problem is information technology (IT) departments being mired in maintenance and upkeep, while other departments have access to cutting-edge systems.  The Accenture team also learned that some coders might devote 60% of their time executing automatable tasks.

The researchers suggested greater inter-enterprise collaboration to address these challenges, by de-siloing walled-off departments and encouraging open access to shadow IT systems.

Whats Next in Tech

An outline from HPE

Exploring What’s next in tech – Insights, information, and ideas for today’s IT and business leaders

Accelerating the future.  The race to stay ahead in an increasingly digital world

Organizations are digitally transforming at an unprecedented pace. Here's what you need to know.

Report - 4.40 MB - 40 Pages

We explore all that's needed to make your digital transformation successful—from strategies for your workforce to how to ensure your tech is secure.

One undeniable effect of the pandemic is the sudden embrace of digital transformation. Enterprises of all types and sizes have sped up their digital plans to meet with the new reality: remote workforces, remote customers and partners, and just about everything needing to run digitally. Leadership teams everywhere have pulled projects off the planning schedule and put them into high gear.

This issue of The Doppler is designed to help you navigate all that involves, from how to establish and achieve your main goals to ensuring that your systems are set up in the most secure way possible. We also reconsider the principles and guideposts of digital transformation itself, a worthwhile topic considering the various ways that people use the term digital transformation.

What you will find inside:

Is your company achieving business outcomes or following the herd?

Here's how to execute a successful digital transformation strategy with the digital journey map.

Five strategic patterns for successful digital transformation

A new study gives guidance businesses can reuse and adapt as they pursue their digital strategies.

Transform your customer experience to unleash your company's full potential

Practical insights for companies trying to disrupt their own business models before someone else does.

Don't go it alone. Three successful strategies for making partnerships work.

Successful innovation in the digital economy increasingly requires an ecosystem of partners.

The reimagined workplace

Predictions and recommendations for the future of work.

Zero trust makes business secure by default

As enterprises turn to hybrid IT, they find that conventional identity and access management doesn't keep up.  ... '

Why Business Transformation Projects Often Fail

 Thoughts and links from an IBM exec we worked with: 

Why Business Transformation Efforts Often Fail  by Irving Wladawsky-Berger

A 2019 study found that the average digitization level across all industry sectors was only around 25% of their ultimate potential.  But, the pandemic has now made the case for accelerating the digital transformations firms and economies were forced to make to help them cope with the crisis.  But, how successful are such major transformation likely to be?

A few months ago I received an email from the Harvard Business Review recommending a classic article from its 50 Best Selling collection that could shed light on this important and timely question, - Leading Change: Why Transformation Efforts Fail, originally published in 1995 by (now emeritus) Harvard professor John Kotter.

“Over the past decade, I have watched more than 100 companies try to remake themselves into significantly better competitors,” wrote Kotter.  These included large and small organizations, US and non-US based, some that were on their knees and some that were doing quite well.  “But, in almost every case, the basic goal has been the same: to make fundamental changes in how business is conducted in order to help cope with a new, more challenging market environment.”  ... ' 

Surveillance Capitalism

I was just pointed to Shoshanna Zuboff's latest Book: The Age of Surveillance Capitalism:   

Our company had been interviewed for her 1988 book:  In the Age of the Smart Machine: The Future of Work and Power. as we ramped up our AI efforts.   It had a similar take, but was before tech companies had become powerful.  And it bought much of the hype of these times in believing how powerful AI was.    Although we attempted to  push back on that, it was not heard.   Looking at that past book now, its a weak look at the reality of the times.

A quick scan of reviews of writing about the latest book would seem, as the title suggests,  suggests that Google and other Tech giants are taking over capitalism via surveillance, to the detriment of all.  But now the power is available to many more than it was then.    If I read it,  mention talk about it some more.

Considering the AI Factory

Nicely covered by Irving:

The AI Factory: A New Kind of Digital Operating Model

“Whether you’re leading a digital start-up or working to revamp a traditional enterprise, it’s essential to understand the revolutionary impact AI has on operations, strategy, and competition,” wrote Harvard professors Marco Iansiti and Karim Lakhani in “Competing in the Age of AI”, a recently published article in the Harvard Business Review (HBR).  Earlier this year, they also published a book of the same title, which expands on the ideas in the article and illustrates them with a number of concrete use cases.

The age of AI is being ushered by the emergence of a new kind of digital firm.  Rather than just relying on traditional business processes operated by its workers, these firms are leveraging software and data-driven algorithms to eliminate traditional constraints and transform the rules of competition.  Managers and engineers are responsible for the design of the new AI-based operational systems, but the system then runs the operations pretty much on its own.

“At the core of the new firm is a decision factory - what we call the AI factory,” note the authors.  “[T]he AI factory treats decision-making as a science.  Analytics systematically convert internal and external data into predictions, insights, and choices, which in turn guide and automate operational workflows…  As digital networks and algorithms are woven into the fabric of firms, industries begin to function differently and the lines between them blur.”

The Industrial Revolution transformed the economy by developing a scalable, repeatable approach to manufacturing.  The AI factory is now driving another fundamental transformation by industrializing the data gathering, decision making, and overall digital operations of 21st century firms.  

The AI factory involves four key components:   

Data pipeline - the process which systematically gathers, cleans, integrates, and safeguards data;

Algorithm development, - the component which generate predictions about the future states of the business and drives its most critical operating activities;

Experimentation platform - the mechanism on which predictions are tested to ensure that they will have the intended effect; and

Software infrastructure, the systems that embed these various components in software and connect it as needed to the appropriate internal and external users. ..... 

(Much more at the link)   Will look at this more closely.  

SAS on How AI Changes the Rules

Always liked SAS as a analytical problem solving company, here a new paper from them of interest, register for it at the link.

How AI Changes the Rules
New Imperatives for the Intelligent Organization

About this paper
Many leaders are excited about AI’s potential to profoundly transform organizations by making them more innovative and productive. But implementing AI will also lead to significant changes in how organizations are managed, according to our recent survey of more than 2,200 business leaders, managers and key contributors. Those survey respondents, representing organizations across the globe, expect that reaping the benefits of AI will require changes in workplace structures, technology strategies and technology governance.to manage the significant changes to software development and deployment processes that most respondents expect from AI.

AI will drive organizational change and ask more of top leaders. The majority of survey respondents expect that implementing AI will require more significant organizational change than other emerging technologies including cloud. AI demands more collaboration among people skilled in data management, data analytics, IT infrastructure, and systems development, as well as business and operational experts. This means that organizational leaders need to ensure that traditional silos don’t hinder advanced analytics efforts, and they must support the training required to build skills across their workforces.

AI will place new demands on the CIO and CTO. AI implementation will influence the choices CIOs and CTOs make in setting their broad technology agendas. They will need to prioritize developing foundational technology capabilities, from infrastructure and cybersecurity to data management and development processes — areas in which those with more advanced AI implementations are taking the lead compared with other respondents. CIOs will also need to manage the significant changes to software development and deployment processes that most respondents expect from AI. The survey also indicated that many CIOs will be charged with overseeing or supporting formal data governance efforts: CIOs and CTOs are more likely than other executives to be tasked with this.

AI will require an increased focus on risk management and ethics. The Global survey shows a broad awareness of the risks inherent in using AI, but few practitioners have taken action to create policies and processes to manage risks, including ethical, legal, reputational, and financial risks. Managing ethical risk is a particular area of opportunity. Those with more advanced AI practices are establishing processes and policies for data governance and risk management, including providing ways to explain how their algorithms deliver results. They point out that understanding how AI systems reach their conclusions is both an emerging best practice and a necessity, in order to ensure that the human intelligence that feeds and nurtures AI systems keeps pace with the machines’ advancements.

The report that follows explores these findings in depth. Read on to learn more about the changes that leaders must prepare for to successfully implement trusted AI.   ... "

A/B Testing for Startups

A/B Testing .... of experimentation for Startups.   Intriguing paper.

Experimentation and Startup Performance: Evidence from A/B Testing   by Rembrand Koning, Sharique Hasan, and Aaron Chatterji in HBS Working Knowledge

Is experimentation the right strategy for startups? This analysis of the adoption of A/B testing technology by 35,000 global startups provides evidence that a strategy based on repeated experimentation will improve performance over time. However, the benefits of experimentation vary. Experimentation helps younger startups “fail faster,” while older firms may discover new, high-growth products.

Author Abstract
Recent work argues that experimentation is the appropriate framework for entrepreneurial strategy. We investigate this proposition by exploiting the time-varying adoption of A/B testing technology, which has drastically reduced the cost of experimentally testing business ideas. This paper provides the first evidence of how digital experimentation affects the performance of a large sample of high-technology startups using data that tracks their growth, technology use, and product launches. We find that, despite its prominence in the business press, relatively few firms have adopted A/B testing. 

However, among those that do, we find increased performance on several critical dimensions, including page views and new product features. Furthermore, A/B testing is positively related to tail outcomes, with younger ventures failing faster and older firms being more likely to scale. Firms with experienced managers also derive more benefits from A/B testing. Our results inform the emerging literature on entrepreneurial strategy and how digitization and data-driven decision-making are shaping strategy  .... ' 

Why Digital Transformations Fail

Currently reading, the author is a former colleague who is on top of this problem for the complex enterprise.  Advanced methods emerging today, like AI need data, and thus need the enterprise to be acting digitally to make it available.  This book is a great start.

Why Digital Transformations Fail: The Surprising Disciplines of How to Take Off and Stay Ahead Hardcover – July 23, 2019     by Tony Saldanha  (Author), Robert A. McDonald (Foreword)

5.0 out of 5 stars    4 customer reviews

Former Procter & Gamble Vice President for IT and Shared Services, Tony Saldanha gives you the keys to a successful digital transformation: a proven five-stage model and a disciplined process for executing it.

Digital transformation is more important than ever now that we're in the Fourth Industrial Revolution, where the lines between the physical, digital, and biological worlds are becoming ever more blurred. But fully 70 percent of digital transformations fail.

Why? Tony Saldanha, a globally awarded industry thought-leader who led operations around the world and major digital changes at Procter & Gamble, discovered it's not due to innovation or technological problems. Rather, the devil is in the details: a lack of clear goals and a disciplined process for achieving them. In this book, Saldanha lays out a five-stage process for moving from digitally automating processes here and there to making digital technology the very backbone of your company. For each of these five stages, Saldanha describes two associated disciplines vital to the success of that stage and a checklist of questions to keep you on track.

You want to disrupt before you are disrupted--be the next Netflix, not the next Blockbuster. Using dozens of case studies and his own considerable experience, Saldanha shows how digital transformation can be made routinely successful, and instead of representing an existential threat, it will become the opportunity of a lifetime.   .... " 

Drumbeat of Digital Development

Considerable paper by McKinsey:

The Drumbeat of Digital: How Winning Teams Play
By Jacques Bughin, Tanguy Catlin, and Laura LaBerge in McKinsey
  
Most executives we know have a powerful, intuitive feel for the rhythm of their businesses. They know how hard and fast to pull strategic levers, move their organization, and drive execution to achieve their objectives. Or at least they did. Digitization has intensified the rhythm of competition in many industries, leaving executives adrift, with information-gathering systems that are too slow or disconnected, direction-setting approaches that are too timid, and talent-management norms that are misaligned and incremental.

These leaders know their companies must adjust and accelerate. Digital is putting pressure on profit pools as it transfers an increasing share of value to consumers. Furthermore, those profit pools are bleeding across traditional industry lines as advanced technologies enable companies to forge into adjacencies, changing who in the value chain is making money, what share of the pie they capture, and how. The slow and inefficient are left behind, competing for scraps.

Faster and harder: Behind the numbers

What is unclear to these executives, however, is how much and how fast to adapt their business rhythms. The exhortation to “change at the speed of digital” generates more anxiety than answers. We have recently completed some research that provides clear guidance: digital leaders appear to keep up a drumbeat in their businesses that can be four times faster, and twice as powerful, as those of their peers.  .... " 

Intelligent Enterprise: Judgement, Reasoning and Decisions.

Stephen DeAngelis of Enterra Systems, who we have worked with writes on   The Rise of the Intelligent Enterprise  in LinkedIn: 

" ... We live in the Digital Age. The World Economic Forum has declared data is a resource as valuable as oil. We have watched the rise of digital enterprises (i.e., enterprises whose very existence was impossible until the Internet matured). Today most analysts agree organizations created in the Industrial Age need to undergo digital transformation and become digital enterprises. Some analysts even argue that going digital won’t be enough. To survive, they insist, an organization must become an intelligent enterprise. “In coming years,” explain Paul J.H. Schoemaker, Founder and Executive Chairman of Decision Strategies International, and Philip E. Tetlock (@PTetlock), the Annenberg University Professor at the University of Pennsylvania, “the most intelligent organizations will need to blend technology-enabled insights with a sophisticated understanding of human judgment, reasoning, and choice. Those that do this successfully will have an advantage over their rivals.”[1] .... " 

I add:

Good points about the understanding of human judgement, reasoning and choice.   Ultimately a result has to be inserted into decisions, usually a group of decisions, by a groups of people (or devices) over time, in varying contexts.   How do we continue to refine how decisions are made?

Large Scale Tech Transformations

Analysis of a survey of CEO's about transformations.

The cornerstones of large-scale technology transformation

By Michael Bender, Nicolaus Henke, and Eric Lamarre in McKinsey

A clear playbook is emerging for how to integrate and capitalize on advanced technologies—across an entire company, and in any industry.

How does your company use advanced technologies to create value? This has become the defining business challenge of our time. If you ignore it or get it wrong, then anything from your job to your entire organization could become vulnerable to rivals who get it right. The new technologies come with many labels—digital, analytics, automation, the Internet of Things, industrial internet, Industry 4.0, machine learning, artificial intelligence (AI), and so on. For incumbent companies, they support the creation of all-new, digitally enabled business models, while holding out the vital promise of improving customer experiences and boosting the productivity of legacy operations. Advanced technologies are essential to modern enterprises, and it’s fair to say that every large company is working with them to some extent.

The cornerstones of large-scale technology transformation

In private discussions over the past year, we’ve asked more than 500 CEOs whether they think technology can improve business growth and productivity sufficiently to lift profits and shareholder value by 30 to 50 percent; a great many have said yes. So far, though, that prize has remained elusive for a lot of companies. Consider, for example, McKinsey research highlighting the large number of digital laggards, and the wide gap between them and leaders: digitally reinvented incumbents—those using digital to compete in new ways, and those making digital moves into new industries—are twice as likely as their traditional peers to experience exceptional financial growth.  ... "

Intuitive Enterprise

Think about 'intuitive' as being like cognitive.   Its a form of augmentation, another means generating potential solutions, then testing them.  Testing can be formally numerical, in an analytic sense,  simulations to help understand it in operation, or it can further be intuitively examined to be filtered into other potential directions.

Implementing the Intuitive Enterprise    by Deloitte
We've Reached an inflection point in the way that work, well, works.

That’s thanks to the sheer amount of data available today: According to one report, the world created 16.1 zettabytes of data in 2016 (for context, one zettabyte equals 36 million years of HD video). What’s more, emerging technologies can use all of that data (to store, to learn from, and, in some cases, to act from), challenging the traditional workflow with which many of us are comfortable.

“Within the next few years we will see the redesign of many of our jobs across all industries and around the world,” says Jeff Schwartz, Deloitte Consulting LLP’s U.S. leader for the future of work and global leader for human capital marketing, eminence, and brand. “Entire workforces and workplaces will be reconfigured around technology and new ways of working.”

Workplace change—and the fear associated with it—isn’t a new narrative. The first time that automation threatened our jobs was back in the 1700s, with the advent of the Industrial Revolution. But fears were quelled when new types of jobs—and the factories that provided them—arose. Then, as automation increased in the 1980s, available jobs in industries that were driven by the Industrial Revolution (like manufacturing) dipped. Still, overall employment rose. ... " 

Today, technologies—such as advanced computational power and machine learning, to name a few—again threaten to supplant human workers. These technological advancements are sure to create changes as radical as those experienced in the 18th century (it’s already happening). But workers shouldn’t be afraid. Today’s emerging technologies will free up time to guide the change in ways that are creative and customer-focused. This won’t happen organically, however. As automation and digitization accelerate, organizations must accept and adopt technological advancements if they hope to remain relevant. They must change their mindsets. ... "

Digitization and Value Chain

Like the idea of a 'value' chain, was reminded of it by this article:

Shaking up the value chain

Data and digitization are creating a growing array of value-creation choices in industries as diverse as pharmaceuticals, mining, and energy.

During the 1980s, McKinsey’s Fred Gluck and Harvard Business School professor Michael Porter began writing about the interrelated activities through which companies create value for their customers. Executives have always had choices about how to perform the activities in this “business system” (Gluck’s words) or “value chain” (Porter’s). In the digital age, as information disrupts the nature of value creation in many industries, the range of choices available to senior business leaders has increased. For example, digital platforms in the pharmaceutical industry now make it possible to aggregate massive amounts of data on diseases—potentially accelerating the discovery and design of new drugs and challenging the industry’s legacy processes. In energy production and mining, although companies have long outsourced some functions in efforts to drive down costs, digital requires a new approach. Using data, suppliers can offer incumbents an expanded range of capabilities and productivity gains—alluring possibilities that are accompanied by the risk that sharing too much data could shut off areas of future growth. This type of flux in value chains will only intensify across industries, forcing leaders to grapple with existential questions about core competitive strengths in an environment where destabilizing technologies will be the norm. ... "

Tennenbaum Institute

Just reviewed Ga Tech's Tennenbaum Institute.  Had not for some time.  Especially about process and decision in the enterprise.  Worth a look:

The Tennenbaum Institute at Georgia Tech helps businesses and organizations use data to inform better decision making.

Our research and education addresses a rich mixture of concepts, principles, models, methods, and tools applicable to a wide range of enterprise domains, with particular emphasis on healthcare delivery and global manufacturing. Our work in these two domains is enhanced by strong partnerships with leading companies and agencies, as well as thought leaders from many organizations. We believe that this diversity is our greatest strength in addressing the complex organizational problems the world faces today.

The Tennenbaum Institute was founded in 2004, enabled by the generosity of Georgia Tech alumnus, Michael Tennenbaum.  Our Research Approach: 

The Tennenbaum Institute has established a structured approach for understanding the transformation of complex enterprise systems. This approach includes four fundamental steps as outlined below.  .... 

Notable too their book: Work, Workflow and Information Systems.   Has probably since. been updated.

HBR on Understanding Digital Strategy

Very true, its not the flashy technical thing that is the focus, its the business process that is essential.  Not only knowing that is the case, but its also knowing the existing business process in detail.  So talk it, model it,  make sure you know what it is and what it could be.

Podcast: 

Understanding Digital Strategy
Sunil Gupta, a professor at Harvard Business School, argues that many companies are still doing digital strategy wrong. Their leaders think of “going digital” as either a way to cut costs or to attract customers with a flashy new app. Gupta says successful digital strategy is more complicated than that. He recommends emulating the multi-faceted strategies of leading digital companies. Gupta’s the author of Driving Digital Strategy: A Guide to Reimagining Your Business. ...

Guide to Digital Transformation

Thoughtful presentation. 

Six Questions That Can Help Guide Digital Transformation
Podcast and Text from Knowledge@Wharton

 How-CEOs-Stymie-Their-Own-Digital-Transformation

MIT researcher Stephanie Woerner discusses a field-tested framework for the digital transformation of companies.

Digital bookCompanies know they must transform to appeal to the digital customer, but they still struggle to find the best path forward, according to a book by MIT researchers Stephanie Woerner and Peter Weill. It’s not enough to tweak management practices that worked in the past, they note. What’s needed is a wholesale rethinking of the enterprise.

For example, a bank must look at itself as helping clients navigate life events, instead of merely being a place for transactions. “That small shift in thinking would mean a profound shift in almost every aspect of the business” and would be the firm’s best bet to fight off digital disruptors, they write. The authors offer a field-tested framework on how companies can digitally transform, based on a years-long study at the MIT Center for Information Systems Research.

Woerner joined the Knowledge@Wharton show on SiriusXM to talk about their book, What’s Your Digital Business Model? Six Questions to Help You Build the Next Generation Enterprise. (Listen to the podcast at the top of the page.)  .... " 

Process Automation at Anthem

I never liked the full term RPA (Robotic Process Automation) since it is not really about robots the way we mostly use the term 'Robot' today.  So I am now using the term 'Process Automation'.    Here how Anthem is using the method to digitize.  This further makes the case that its always useful to do some sort of process model first before digitizing.   That ensures everyone agrees you are digitizing the right thing and can agree with the results.  Even if you never RPA,  you can address your model with other methods as appropriate.  Or simply as a means to document your current flow of business.  Useful for training too.  You should only automate your process if you know what it is.

Anthem taps RPA, AI in digital transformation push

The health insurance company is using robotic process automation to balance data center workloads as part of CIO Tim Skeen’s effort to make IT operations more nimble for stakeholders.   By Clint Boulton in CIO

Robotic process automation (RPA) has become a popular go-to technology for insurance companies looking to automate data entry and replace paper shuffling. One insurance provider is embracing RPA in a different fashion: Automating computing infrastructure to free up engineers to focus on more strategic tasks.

Anthem has implemented more than 130 RPA "bots" to manage the company's data center infrastructure, says CIO Tim Skeen. The bots are a key part of Anthem's broader digital transformation to make IT more nimble for external stakeholders, including consumers, healthcare providers and employers, says Skeen, who took the reins from Tom Miller four months ago.  ... "

Procter & Gamble is Genius in Digital Marketing Practices

On Procter's use of digital marketing practices.

Procter & Gamble is a Genius   By Jack Neff. in AdAge

Procter & Gamble Co. was one of the first big marketers to jump into automated digital media buying, developing its own proprietary system eight years ago, well before "programmatic" became an industry buzzword. Now P&G is moving away from programmatic and plowing more money into e-commerce platforms run by the likes of Amazon and Walmart, according to a report from consultancy L2.

The strategy appears to be working, according to L2, which gave P&G its highest, or "genius," rating in the home-care space for its digital marketing practices, followed closely by Clorox Co. .... " 

Why Digital Strategies Fail

Thoughtful piece on the topic:

Why digital strategies fail
By Jacques Bughin, Tanguy Catlin, Martin Hirt, and Paul Willmott in McKinsey

Most digital strategies don’t reflect how digital is changing economic fundamentals, industry dynamics, or what it means to compete. Companies should watch out for five pitfalls. .... 

We find that a surprisingly large number underestimate the increasing momentum of digitization, the behavioral changes and technology driving it, and, perhaps most of all, the scale of the disruption bearing down on them. Many companies are still locked into strategy-development processes that churn along on annual cycles. Only 8 percent of companies we surveyed recently said their current business model would remain economically viable if their industry keeps digitizing at its current course and speed. ... " 

Digital Effect

Interesting results from an executive survey regarding the value of digital.  I would assume this is quite obvious for readers here, but good relative statistics.

The digital effect
What does the digitization of industries mean for future revenue and profit growth? McKinsey put that question to 2,135 global executives in a survey late last year. The findings are bad news for average companies.  .... "