Tuesday, April 19, 2022

Digital is Not...


Digital is not  just "traditional IT". Digital is not  only "robotic process automation (RPA)" based solutions. Digital is one of the often mis-understood jargons in the industry and is very loosely used (with multiple interpretations). 

Majority of the folks / firms use "Digital" as a façade to traditional IT. Most of the problems that they focus are  around IT questions (e.g., server capacity planning, network service providers optimization, etc.). 

Then, what is Digital ? 

I have been researching what the true definition of "Digital" is. The answer to this lies in digging back to the evolution of IT solutions. 

The application of Digital has evolved over 3 generations- 
  • First generation focused on solving (pre-2000s) at deploying Off the shelf with some custom solutions . 
  • 2nd generation (2000s to ~2015) saw point solutions filling the gaps of large enterprise wide solutions. 
  • 3rd generation is driving the reimagining of processes / interactions leveraging advanced tech capabilities driven by immense compute power 
In the first 2 generations, Digital (traditional IT) evolved with technological and compute constraints while processes were designed around the IT limitations. The focus of these solution was introduction of new tools - records storage, backend processing, work collaboration, security, etc. Cumbersome processes evolved around these IT gaps leading to inefficiencies and focusing on less value additive efforts. 

The 3rd generation of Digital transformation is the opportunity for companies to fix all prior deficiencies and radically transform organizations. Companies are staring at an immense potential to disrupt their business model and leapfrog the competition. Each company has the potential to become the next Tesla and disrupt their market space. 

The apt definition of Digital is associated with the paradigm shift in the way work is done, in the way the company interacts with customers, in the way advanced technologies come to life to solve real-world business and consumer problems. The fundamental concept of Digitizing is to transform how business works - both internally (decisions are made, how goods are produced, how work is performed) or externally (how it interacts with customers or end consumers) leveraging advanced tools & technologies. 

Companies have trying to leapfrog in the Digital maturity by embracing newer technology based solutions. 
Example 1: JP Morgan Chase had announced a few years back (2018?) the launch of 1,000+ bots to automate the work. It was one of the pioneers (although many companies had tried their hands with it prior to this , but had not scaled). However, after automating routine work, there has no further transformation (not sure where it lost the steam or what hurdles stopped it from further expansion). Again, it goes to the fundamental question of "Does implementing RPA bots get you to the "Digital nirvana"? (answer is "No"). 

Example 2: IBM  developed a blockchain based Accounts Payable solution, a revolutionary idea (with huge investments) and presented it as a case study in one of the conferences in 2019. When asked how many companies had they implemented - the answer was One (IBM). I think IBM was too ahead of the curve in launching highly complex solution to a relatively simpler process 

There have been good examples of successes of applying Digital solutions, but no large (i.e, Fortune) company has been able to achieve an end to end Digital transformation. It will need many years to get there and will require "reimagining" the entire operating model. 

Having worked with a lot of Fortune 500 companies helping them craft Digital strategies over the past 7-8 years, I believe most companies are still scratching the surface with a piecemeal approach. 

Barring few exceptions, most companies are still trying to answer foundational questions around Digital and how they can stay ahead of the competition  
  1. How can we change the core "Digital, ways of thinking" (note: this precedes "ways of working") ?
  2. What portion of internal, production & distribution, and external facing processes can be digitized ? Will  50% or 75% be the right goal ?
  3. What is required to achieve this goal ? How can we work together to achieve this goal ? 
  4. What is the right operating model ? Should Digital be a separate organization ? Should Digital be part of IT?
  5. Where should human (process) intervention be introduced and why?  
  6. How should we empower Citizen led Digitization efforts ?
  7. Should a technologist or a business person drive the Digital Agenda ?
  8. .... 

The answers to these strategic questions along with a well established vision can help companies set a Digital agenda, execute on it, and leapfrog ahead of the competition.  

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Digital is Not...

  Digital is not  just "traditional IT". Digital is not  only "robotic process automation (RPA)" based solutions. Digit...