Guest writer: Anders Brunland Manager Business Development - OBOS.
Collaboration initiates digitalisation, people with various backgrounds must work together to define a clear digitalisation strategy. This strategy plan describes how step by step people, organisation, processes and technology combined shape the digital organisation.
This article presents 4 sequential collaboration steps; design, prepare, implement and reiterate to initiate digitalisation for organisations starting at leadership level. Every step specifies the involved departments, roles, approach and results used for the next step. A feedback loop makes it a reiterative process connecting C level leaders with the business analysts reviewing the results.
The current situation in Europe
Europe has a digital gap of 35% compared with the world’s leaders in digital and AI according to this 2019 Mc Kinsey report. This requires Europe to step up its efforts in becoming digital. Easier said than done, where and how do we start?
Technology has various impacts on the organisation, the products and services you create, and it changes the business environment. The effect technology has on the organisation and its business processes forms a triangle, every part influencing the other. This triangle is a fundamental principle in the ITIL framework. For organisations to excel at digitalisation, leaders must address all three aspects at a strategic level and lead the way.
The Digital Business Strategy initiation
The value chain below shows the roles and departments involved in executing a digital business strategy. Each organisation makes individual choices who will collaborate in each step of the digitalisation strategy. The 4 steps are explained more in detail, including the fundamental deliverables in step 2. Based on this article organisations can think through the digitalisation steps prior to starting this endeavour.
Step 1. The design
C level leaders initiate digitalisation, they are responsible for transforming the organisation, so it matches the changing business environment. It is a complex and tough discussion but organisations which convert these discussions into insights and execute them correctly will be the future market leaders. People with the right knowledge and expertise should participate in these discussions irrespective of their position.
Digital strategy discussions can be initiated in three ways, depending on the business environment specifics you operate in.
1. Starting point - Business goals
Use the SMART method to define the business goal. Evaluate which technology will contribute to achieving these business goals with the help of experts.
2. Starting point - Technology
You assess how products and services are enhanced using different technologies.
3. The preferred way is to combine 1 and 2 and to make it a reiterative process. Start with the broader picture of how technologies and their associated services/products impact societies in general and your specific business environment in detail. Define your business goals based on these analyses and see how technology contributes to achieving these goals. Optionally you go back to technology versus business environment, making it a reiterative process.
Discovering your digitalisation path is not a straight forward process. Due to the huge impact of technology current strategy development i.e. digital transformation requires many roles and experts collaborating. Making thought-through decisions for your strategy these roles and experts must meet for one or more strategy sessions. Session preparation and a strong focus on expected results are crucial for success.
Step 2. Prepare
Participation is not restricted to top - and project management, and we recommend continuing the reiterative approach from step 1. Include the CDO (Chief Digital Officer) in the process, so that (s)he can learn and finetune the digital strategy because everybody is in a learning process. Project management can simultaneously share their thoughts on how specific projects and tasks result in business goals realisation.
The deliverables to prepare digitalisation
Data Governance
The most important factor in generating business value from data, because it simultaneously empowers and controls. The empowerment lies in the responsibility roles receive for making data decisions. Control is exercised because all governance groups, their members and decision-making authority are visible and therefor controllable. Data Governance can also include security and GDPR regulation. In this document the governance is specified; roles, responsibilities, meeting frequency, communication between the groups and the overall decision-making structure.
Communication strategy
This document describes how the initiative is to be communicated throughout the organisation and to external parties. This should include the both why, what and how. As the organisation interprets and executes the digitalisation strategy it is crucial that everybody understands the motivation behind this initiative: Why are we doing this, what are the end goals and how shall we get there. The overall direction is communicated from the strategy department and subsequent project initiatives communicate their progress to end users and others.
Enterprise data strategy
At the core of digitalisation lies the organisation’s capability to harvest from data. The enterprise data strategy should describe which core data the organisation has and how the data is classified. Which business processes relies on said data and in which systems do the data reside? From this the organisation can chisel out a strategy for harvesting the data. The strategy should address key questions such as: Which core business areas would stand to gain a competitive edge from data insights and if the data is missing – how shall the company obtain them?
Organisations missing an enterprise data strategy should start acquiring this capability as part of the overall business strategy.
Project or program plan
This document describes the project(s) and activities to be initiated based on technologies contributing to business goals. All project aspects are described; time & budget, planning of resources, scheduling of activities, communication plan and the Project Board. This Board is equally responsible for the project success and could position the CDO as business executive and a top manager as Senior Supplier. The project follows a structured method, for example PRINCE2 developed by the British Government.
Step 3. Implement
The Project plan execution include both data scientists and business analysts as resources. The data governance and enterprise data strategy deliverables are a prerequisite for project success. The collaboration of different roles assures the right data registration and the subsequent conversion into information necessary for business goals and valuable data creation about the products and service delivered. Watch this Columbia Business School lecture on the process of digital transformation referring to data as an asset.
Note
There are two information types described in the enterprise data strategy document
1. Information related to the business goals, i.e. how does the business perform
2. Information creating insights in products/service performance
Step 4. Reiterate
Business analysts review the output results (information) together with C level. The deviation between presented results and business goals create a picture whether or not the strategy is creating movement in the right direction. Effects of a strategy may take 3 to 5 years to emerge, with the speed technology develops this might be reduced to 2 to 3 years. Keep in mind that the old organisation with hierarchies, budgets and politics must transform at an equal pace.
Artificial Intelligence (AI) connection “time to insight”
The groundwork done by the strategy department visible in the data governance and enterprise data strategy will ultimately result in valuable data being registered. This data functions as input data for AI. Your organisation accelerates by gaining insights beyond the imagination of humans using AI, being the second wave of digitalisation. But,
“Don’t misinterpret — machine learning is not magic. You can’t just push a magic machine learning button and have all your work done for you.”
Jim Little Advisory, Technology Sector, IT Ernst & Young LLP
Recommendation
Gartner defines digitalisation as “… the use of digital technologies to change a business model and provide new revenue and value-producing opportunities; it is the process of moving to a digital business”.
A successful approach to digitalisation depends on C-level leaders taking an active role in defining the which business goals to pursue. Once the goal is set the digitalisation strategy can be chiselled out and implemented. Keep in mind that implementation is not about technology alone. Implementation concerns the interaction between organization, process and technology. We recommend an iterative approach where the digitalisation initiative adapts to insights gained during implementation and data analysis.
Guest writer: Anders Brunland Manager Business Development - OBOS
Writer: Fredrik the Frisian CEO - Dynamic Integrations