Most important currencies in a digital economy: Trust, speed, and relevance
Speed and relevance are the critical metrics. Brian Solis, global innovation evangelist at Salesforce, describes this as the #NovelEconomy:
"Novel represents a new strain of market conditions that are not fully identified or understood. Thus, we have no pre-existing defenses or experience against this level of astonishing disruption. We were all simultaneously thrust into a melee of panic, fear, confusion, and disorder. There's really no widespread expertise, playbooks, or best practices to guide us. Nor, is there a preventative business vaccine to protect us from this or future disruption...yet."
Solis sets out the three phases of the Novel Economy, which are: Survive, Alive, and Thrive.
- Survive: Reaction to Crisis. Companies are doing what they can to shore up business, throwing apps together, making changes on the fly. It has been a reaction to changing circumstances that are not expected to be the long-term norm.
- Alive: Build, Secure, and Operationalize for Transition State. The forward-thinking leaders are already planning for this phase. They need to be a highly agile business able to adapt to changing business models and priorities that could span the next one to two years. The heart of this is digital transformation which is robust, agile and compliant
- Thrive -- Next Normal Business Continuity, Disruption Proofing, and Innovating Forward. This phase is the new normal or Novel Economy as Solis describes it. It is the new status quo. The business models optimized in the Alive phase will enable growth.
SEE: Tech Budgets 2021: A CXO's Guide (ZDNet/TechRepublic special feature) | Download the free PDF version (TechRepublic)
To learn more about how companies can accelerate their digital transformation projects in a Novel Economy, Ray Wang, CEO and founder of Constellation Research, and I invited Ian Gotts, founder and CEO of Elements.cloud, to our weekly video podcast DisrupTV. Element.cloud is in the business of digital transformation, enabling its clients to increase adoption, agility, and trust by creating highly optimized processes with rich contextual intelligence that is integrated into existing platforms.
Turbo-charging your digital transformation agenda
Many industries recognize they are going to have to change their business models permanently -- not just a stop-gap for the next few months. For some, this has been a function of the demand evaporating which will be very slow to come back. For others, customers have had their expectations of delivery or service changed. Finally, for some, the prodigious demand has been surprising.
As The Economist put it: "Sometimes change is so vast and dislocating that it is hard to tell disaster from opportunity." In March, Ocado, a British online grocer, saw its servers so overloaded that it suspected hackers. "We thought that we were under a denial-of-service attack," says Tim Steiner, the company's boss. "In fact, Britons were desperately trying to arrange to get food and drink deliveries for the weeks ahead. "
All of this is massively disruptive and also a huge opportunity that should not be missed. That opportunity is to accelerate the pace of digital transformation inside organizations. According to research inHarvard Business Review, of the $1.3 trillion spent on digital transformation in 2018, an estimated $900 billion was wasted when initiatives didn't meet their goals. We cannot squander this opportunity again. COVID-19 is forcing every company to embrace digital transformation. Although they understand its importance, many are overwhelmed by the idea of having to redesign their entire operation and do not have a blueprint to implement a transformation. But they also realize that if they don't do anything, they run the risk of being sidelined... or worse!
Digital transformation means streamlining processes and integrated enterprise applications to improve not only the customer experience but also the partner and employee's experiences. Digital transformation needs to be led from the top, endorsed by IT, and supported by all business units. The promise made to the customers at the front end needs to be able to be delivered by the back office.
Digital transformation will take investment and every industry will be different. Clearly, some industries are on their knees, but others will be investing heavily. Here is a view of the predicted changes in IT spend by industry from Constellation Research from their post-COVID-19 playbook.
Constellation Research from their post-COVID-19 playbook.
Mastering change management
What makes the Alive phase even more challenging is that organizations have a limited view of the exact shape of their new business models that will work. Digital transformation cannot be simple digitization of pre-COVID-19 business models. So, organizations need to iterate their way towards the right answer.
Sounds scary? Not as scary as becoming irrelevant. Plus, now is a perfect time. Staff are open to change -- or as open as they are likely ever going to be.
A defining skill for organizations is change management -- at pace. This is the ability to rapidly change the business operations (people, process, technology), whilst keeping everyone on the same page, realizing that the page could look different tomorrow. This level of change will put a huge strain on all areas of the organization. A business process-led approach supported by an agile development cycle is required. Furthermore, the lack of oversight and governance which was acceptable -- or at least ignored -- during the Survive phase will not be tolerated in the Alive and Thrive phases.
People, process and technology
The organizations that will come out on top will empower talented and motivated people, who are consistently following easily understood business processes, supported by intuitive, integrated applications.
Back in 2004, the founders of Elements wrote a book called Common Approach, Uncommon Results, which has a simple formula R=I x A2 (Results = Initiative x Adoption squared). The book made the point that adoption is the end goal and is far more important than launching yet another initiative. Adoption of new working practices (processes). Adoption of new technology/apps. Adoption of new skills. That message is the same today, except COVID-19 is driving extreme urgency.
Digital Transformed implementation lifecycle
The emergence of highly configurable cloud applications has enabled applications to be built at a previously unprecedented pace with limited technical skills. As the business has taken matters into its own hands, often as a reaction to the amount of time it takes the IT Departments to deliver new applications. But the business is building applications without the rigor and oversight of a formalized delivery approach, so it is often at the expense of adoption and compliance.
In the interests of speed, the business is tempted to take shortcuts or leave miss out key steps. For example: Rushing straight into the build without bottoming out the requirements or thinking through the architecture. Whilst it feels like time wasted on design, it ultimately undermines user adoption because the apps are not what the end-users need. Worse, changes are routinely made without any type of risk assessment or impact analysis so they end up breaking the app. This takes time to debug and roll-back, killing user productivity, and undermines user confidence. Finally, since nothing is documented, the future the impact assessment is impossible.
Yet, the overall implementation activities for delivering business change and the underlying applications have not dramatically changed over the last 20+ years. Cloud and agile change the cadence, not the core activities. Application development has become more agile, yet the implementation approach is still supported by a set of disparate tools and a patchwork of documents. This is the greatest source of friction that introduces, risk, and prevents rapid releases. The faster releases can be delivered, with confidence, the more agile the business. A recent study of 372 Salesforce implementations by 10K Advisors has shown that more frequent releases lead to a far higher ROI. COVID-19 is yet one more reason to drive faster release cycles.
The implementation lifecycle itself can be digitally transformed to be able to support the larger digital transformation agenda. It must provide rigor and governance without losing the power and agility of these cloud-based apps.
Four phases of the implementation lifecycle: Analyze, Build, Deliver, and Operate.
Four phases of implementation lifecycle: Analyze, Build, Deliver, Operate
There is a natural flow of information around the lifecycle. Every phase uses information from earlier phases. Vital time and information are lost transferring from document to spreadsheet to app and then back to document. There is no reuse of information, in context. There is no impact analysis. There is no traceability or governance. Finally, this is a continuous cycle with multiple releases. The power is in building on the previous iteration. The enterprise apps should become more valuable with age -- rather like fine wine or classic sports cars. They should get incrementally better every hour, every day, every release.
- Platform to accelerate change: What is required is a platform designed to support rapid business change and application releases. It coordinates the development and reuse of all documentation around the lifecycle as you can see from the lifecycle diagram. It eliminates friction and improves collaboration at every phase. Let's look at how the platform supports each phase of the implementation lifecycle in the context of Digital Transformation:
- Analysis phase: In a live workshop, engage stakeholders to design a new end to end business processes. These are documented as easily understood, version controlled, process diagrams using the simple, proven UPN (Universal Process Notation). These diagrams describe how to deliver a digital experience that will wow customers, that can be delivered by the organization, and are scalable. The process diagrams will be reused for testing and training. Process mapping can now be delivered quickly, collaboratively, and remotely. Think hours and days, not months. In these workshops, you bottom-out the requirements for the new apps or changes to the existing apps. Requirements are linked to specific steps in the process diagrams to give them context. From these requirements, you can create user stories. These are prioritized into Sprints which are then synced to Jira or whatever tool the developers use in the next phase. Up to 25% process improvements will be identified in workshops.
- Build phase: User stories are related to the metadata items in the Salesforce metadata dictionary that are going to be changed or that have been created. The metadata dictionary is kept in sync with the 10,000s of configuration items that make up the applications; objects and fields, page layouts, automation, reports, code, plug-ins, etc. The metadata dictionary will sync with production and all sandboxes and track metadata changes and documentation through the deployment pipeline. This provides traceable documentation with minimum effort. The approach supports both declarative tools and code. This process will yield an 80% reduction in time spent on Org Analysis. Centralized Org documentation is also developed more quickly.
- Deliver phase: The metadata changes must be driven through the deployment pipeline; Dev, UAT, Training, and finally into Production. Tracking these migrations improves traceability while ensuring audit-ability. This is the final chance for an impact assessment of the changes. Before the final deployment, a backup of metadata should be taken to enable roll-back. Average benefit shows a time reduction to build release manifest by 80%, which leads to more rapid releases.
- Operate phase: Formal instructor-led training courses can be minimized or even eliminated. In-app self-help is what users expect. Rapid cycles aim to be able to quickly iterate change, responding to the market needs. Minimizing the fields on screens, hiding complexity with automation, and providing in-app help in page layouts increases user adoption, reduces user frustration, and reduces training time and cost. As organizations iterate and try to optimize their business operations they need to rely on solid metrics. Existing dashboards and reports will have to be updated for the new operational reality. Executives will want to try and find leading, not lagging, indicators so that they get early warning. Looking at the process will help identify the key upstream metrics. The operate phase will drive improved user adoption, data quality, and responsiveness to user feedback.
Managing flow of insights leads to greater business agility
The overall benefits of digital transformation are unequivocal and organizations that can respond quickly in the Thrive phase will ultimately emerge as the overall winners. The tactical benefits of using a centralized platform to drive more rapid and controlled change release cycles can be as high as 25% process improvement savings, 80% reduction in impact assessment effort and 20% increased user adoption. All of these underpin and accelerate the digital transformation agenda which is the far larger prize.
The kicker is that none of this requires a huge change in the way teams are currently working. It is just putting in place a centralized approach for management of the flow of documentation. So, there is an immediate return, that will keep paying back long after we have forgotten COVID-19.
This article was co-authored by Ian Gotts, founder CEO of Elements.cloud and Richard Parker, founder and CCO of Elements.cloud.