Friday, May 30, 2014

Five Digital Impacts in Modern Business

Digital makes a profound impact on a specific function to business as a whole, with the goals to delight customers and achieve high-performance.

Digital makes a significant impact on every aspect of the business from people, process to technology, both horizontally and vertically. Given the power of the cloud, social, mobile and analytics digital technologies to fuel business innovation, capability orchestration, and employee collaboration, digital becomes the very fabric of high performing business, being outside-in and customer-centric is the new mantra for forward-looking and high mature digital organizations today.

Knowledge Flow: Digital means flow, data flow, information flow and insight flow; knowledge does not stand still! It flows into the company, it flows out of it, it erodes; it gets created, and hopefully it flows to the customers of the company in terms of product and service delivery as well. There is a shift from more traditional knowledge management approaches to techniques that involve enhancing the "flow" of knowledge within a high mature digital organization to improve access and use. As the accepted industrial model of knowledge management is too hierarchical, too centralized for the fast-moving, increasingly social or collaborative digital enterprise of today, so digital knowledge management has been expounding many of the principles such as connect-collect-collaborate; ask-learn-share, and solving some of the pains underlying it, unlocking the latent expertise, collaborating with communities, getting the right information to the right person at the right time; geographically-distributed teams are connected by technology, there arises an opportunity to analyze and reuse the data they create as they go about their activities, and from that to generate valuable knowledge that can be shared to help everyone in their work and keep talent grow. Hence, digital makes a big impact on knowledge management.

Complexity optimizationComplexity has increased exponentially and has become the part of digital new normal. Imagine the complexity that comes in due to these characteristics such as less structure, rules and regulations, diversity, volatility, ambiguity, unpredictability, lack of linearity and increased flux working and impacting together. There are unknown interactions and very high inner dynamics in complexity. It becomes complex if things do interact, particularly in the case of "non-linear" interaction, you can't separate things properly or you cannot predict the actual effect of interaction straightforwardly. The complexity can be good or bad for businesses depending on your strategy and capability. Thus, Complexity Management is the critical digital capability to minimize value-destroying complexity and efficiently control value-adding complexity in a cross-functional approach. And organizations must learn to navigate digital uncertainty and complexity via complexity mindset, innovate and adapt to increasingly changing digital realities.

Structure design: Majority of organizations are designed to improve functional efficiency in the industrial era; and many of traditional organizations today are running at two speeds, with the industrial speed, it can continue to keep the business light on; and with the digital speed, it will adapt to the more frequent digital disruptions, wired to change and designed for better innovation toward long-term digital transformation. High mature digital organizations integrate organizational design (OD) into the process design and organizational re-engineering. Hence, digital makes an impact on the speed to run business, the empathy to their people and the orchestration of their capability in high mature digital organizations. In reality, fewer companies are truly using OD resources. But more often, the successful process improvement initiatives to digital transformation shall have representation and input from organizational design people management. It helps establish early buy-in and support through analysis of how the digital "initiative" impacts the people in the organization. Besides, realigning functions, structure and management should be there to support the people -the most important asset of any organization, and not the other way around. Therefore, both organizational design and process are important elements in digital transformation. The leadership team must understand that the road to achieving any effective and efficient business model is business process management with the leverage of organizational design management, and reach the ultimate goal to build a high-performing, anti-fragile and outside-in customer-intimate digital business.

Nexus of Forces: Gartner refers digital technologies SMAC-Social, Mobile, Analytics and Cloud as the Nexus of Forces and, of course, IT leaders need to pay attention to their huge impact. Cloud computing is changing how businesses think about infrastructure and application procurement. Big Data is changing not just traditional areas of analytics, but also how people manage most things in the future. Mobile is changing the customer relationship; the business is always on and needs to be always available, always relevant, and always helpful. It's not enough to offer the flat services. In the new age of consumerization of IT, digital customers and employees expect applications to be as intuitive and task-oriented. It’s that consumers and employees are using the same technology devices for similar activities. It represents a merging of corporate and consumer capabilities within the organization. It blurs the line between professional life and personal life, it also transforms the monolithic enterprise IT infrastructure into the mosaic digital backbone, and catalyze the new business culture. People can work anytime, anywhere, to access any necessary information to create any innovative idea now with partners outside the organization, sustainable innovation means products and services need to be improved via continuous conversation and open loop feedback from customers and partners. This digital convergence of devices and services are creating new business models and revenue source as most companies across industries are being forced to become technology companies and run information business.

Change agentChange the game is mindset; people are always the weakest link in any change or transformation effort. Digital make a huge impact on talent management, the emergence of social platforms provides the new way to learn, share and collaborate via direct applications at the corporate level. The organizations with learning culture have implemented the set of social collaboration tools as part of the overall talent management platform. The social or informal learning will become mainstream learning channel and a preferred delivery method at the digital era. On the other side, change agent is critical in radical digital transformation, as they have been an invaluable source of knowledge, business direction, insight, and support etc., there are a few change agent roles: 1) transformational leaders can provide the direction as vision, mission, strategy, as well as leadership skills like delegation, decision-making, and monitoring. This role affects most through congruent behavior, continuous endorsement of the digital transformation and regular communication to keep the momentum. 2) change specialists are the people that stand outside the political hierarchy of the change area, a cross-functional specialist, an insightful outlier, or an outside consultant, their main skills are the understanding of the change mechanisms and human behavior as well as providing appropriate measures for facilitating change. 3) change champion has a specific skill set in the field of the change additionally to the specialist knowledge. This role affects as a role model, an example that pulls the rest of the organization in the right direction. If necessary, organizations shall mobilize a change agent network- a network is a group of people integrated with the execution of the digital strategic plan and who own the required transformation so that the change and digital transformation can be orchestrated via cross-functional collaboration and iterative communication.

Digital makes a profound impact from the specific function to the business as a whole, the purpose of such radical digitalization is to make a significant difference in the overall levels of customer delight and achieve high performing business result.


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