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This is Part II of a two-part post that describes the 10 dimensions of Digital Transformation Debt. Part I started with the most important dimension, namely Culture. The other dimensions are Value Stream Digitization,Intelligent Automation, and the twins Citizen Development and Data Science.
The next five dimensions expand upon realizing innovation – while remaining pragmatic in alleviating the DX debt.
6. Design Thinking for Innovation: Design Thinking is a robust methodology – involving design methods and processes. Design Thinking helps organizations innovate through empathizing with their target customers, ideate, and quickly prototype with innovative solutions. This is often followed by testing and deployment. The whole process is dynamic with multiple continuous iterations between the phases. The DX organization needs to encourage and promote design thinking initiatives. It implies focus on innovation with budget, time, and resource allocations. Design Thinking engages multiple disciplines and creates a prioritized backlog of innovative solutions – balancing ease of development, optimized customer experiences, market opportunities, and business value.
7. Customer Experience Optimization: closely related to the above six dimensions – especially design thinking – is the prioritization of customer experience optimization. The customer in the digital era is always connected, tech savvy, and has high expectations. This is a critical dimension, and it can be realized through leveraging AI, innovative design, and digital process automation. DX transformation elucidates the need to shift from bulk marketing, siloed organizations, and ad-hoc experiences to digitally transformed 1:1 connected customer engagements. The combination of AI with digitized end-to-end value streams on behalf of the customer creates this experience through extreme personalization that leads to concrete business results, such as improvements in Net Promoter Scores (NPS).
8. The Connected World: IoT Transformation: Internet of Things (IoT) is considered one of the most important digitization trends. Though a bit slow in comprehensive market penetration, both Consumer Internet of Things as well as Industrial Internet of Things (IIoT) are starting to transform homes, businesses, and governments as well as heavy industries such as discrete and process manufacturing. There are challenges though – especially with interoperability, security, and ROI. The Internet of Things is a phenomenon whose disruptions are expected to far exceed the impact of those caused by Social, Mobile, Analytics, and the Cloud combined. The road to IoT success though, runs through Digital Process Automation – connecting the consumer’s world through end-to-end value streams orchestrating people, things, enterprise applications, and business partners.
9. The Decentralized World: Another even more recent digitization trend is the emergence of decentralized and distributed ledgers – also known as Blockchain. Blockchain is very much a revolution. It is the engine that empowers the emergence of the Internet of Value – extending the traditional Internet of Information and aforementioned Internet of Things. Blockchain is the foundation of cryptocurrencies – that are in turn facilitating the emergence of new economies and disruptive models of value exchanges (for instance in Supply Chain) across enterprises and countries. Additionally, Blockchain is the enabler of Decentralized Applications and even more importantly, Decentralized Autonomous Organizations. The potential is to digitally transform traditional siloed business practices with potentially decentralized agile organizations.
10. DX CoEs (aka Competency Centers). Technology alone does not lead to innovation or disruption. There needs to be a balance between Digital Innovation Speed – as captured in the Citizen Developer, Citizen Data Scientist, and Design Thinking approaches – and Digital Competency Best practices. The latter category is often ignored — with serious ramifications. Connected and Decentralized worlds are mega digital transformation trends. DX organizations need to think big and think digital, but start small with pragmatic quick wins. They also need to fail fast and succeed faster. All this needs enablement, governance, and agile methodologies – precisely the charter of the CoE. The CoE has to be more than a concept. It needs to be budgeted. Resources need to be trained and empowered to realize the formidable task of alleviating DX debt.
Not an Option
Digital Transformation is not an option. Enterprises engaged in transformation initiatives soon realize there are several areas (we called them dimensions) they need to optimize or transform – especially those involving customer journeys.
Alleviating DX debt is complex and multi-faceted. However, continuing with “easy solutions” and avoiding prioritization of DX can have disastrous results. The debt just gets worse.
We identified 10 dimensions of Digital Transformation debt. Different organizations will be at different levels of maturity in these dimensions. Culture is the first and most important dimension. DX organizations need to address the silos that exist between their business and functional units (Dimension 2). Digital speed is achieved through Intelligent Automation (Dimension 3). Keeping up with the demand of customers and market pressures will not be possible without Citizen Developers (Dimension 4) and Citizen Data Scientists (Dimension 5). With this foundation, innovations can become real — especially through dynamic and iterative Design Thinking (Dimension 6). And yes, it’s all about the customer, who is increasingly demanding, impatient and expects to be treated differently depending upon her needs or circumstance (Dimension 7).
The DX organization cannot ignore or postpone the mega-trends – especially the connected world through consumer and industrial IoT (Dimension 8) and the decentralized world through Blockchain (Dimension 9).
Finally, last but definitely not least, the DX organization needs a robust DX CoE (Dimension 10) that is the pragmatic clearing house to prioritize DX initiatives and promote the transformation culture.
If this all sounds overwhelming, it’s because it can be! However, as we shall see in subsequent posts, the DX organization can embark upon a maturity roadmap: initially thinking big, thinking Digital, but starting small to achieve initial victories.
Let the DX debt reduction journey begin …
This article originally appeared in Forbes.
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