Monday, March 20, 2017

The Ecosystem View of Business Capability Building and Digital Transformation

Everything is interconnected and the business ecosystem becomes more interdependent and dynamic than ever.

Digital transformation is the paradigm shift. Adopting a different paradigm is like changing the glasses and new possibilities continue to emerge. Those who look through the lens of the previous industrial era see their own reality very differently from those who leverage the lens that the new era has crafted. Due to the hyperconnected digital reality, you have to gain the interdisciplinary understanding via the multitude of dimensions (socio-cultural, socio-technical, socio-economic, organizational, scientific, philosophical, the psychological, the artistic, etc), and to catalyze changes and accelerate digitalization, you have to embrace the holistic ecosystem view of capability building and digital transformation.


Changeability: Digital paradigm means hyper-connectivity, interdependence, and integration. By this new digital age thinking, the business ecosystem is integrated and hyper-connected, just like the whole nature ecosystem is an integrated identity.  Management systems and processes are gradually moving away from a static, unidirectional, and time-bound avatar to a more dynamic, continuous, and interactive state, such dynamic digital ecosystem explicitly seeks to create a creative working environment where people can grow, and business focuses on dynamic resources, long-term perspectives, scalable performance and harmonized relationship. There are two significant factors behind successful organizational changes and business transformation. The first is organizational change capability. The second is around the appropriate bounding of roles and responsibilities of those working in the organizational change space. The solutions will most probably cover standard aspects such as culture/behavior change, support resources for the design/build/implementation of the change (what mix of internal/external resources /capabilities), planning and control etc. but also very specific technical/functional aspects. The reality is that there are many contributing factors to change failure, and it is often a combination of these causes which has such a devastating impact on a change initiative or the business transformation effort. So do not limit the success factor for a change or transformation to any particular aspect, nor accept the pure success or pure failure assumption. To start and to expand the collaborative change process, it will be effective to the surface, examine, challenge and perhaps, even shift the underlying paradigms and tune the dynamic digital ecosystem in a structural way.


Building a digital capability portfolio and manage capability lifecycle effectively: After gaining the full digital awareness, top leadership/ management in an organization defines a business strategy, in order to reach the business vision, a set of core capabilities is needed to meet and implement the strategy.  The organization needs to ask whether they need the capability at the base level to keep the light on, or at the competitive level to stay competitive in the business and at a differentiating level to be the key differentiator for its business. So the core capabilities could be those that are identified as delivering the competitive products, services, and customer experiences than competitors.Enterprise capability management, in essence, consists of a portfolio or matrix of capabilities that are used in various combinations to achieve outcomes. Within that portfolio, a capability will be transient unless managed and maintained over time. Therefore, a typical capability lifecycle spans need, requirements, acquisition, in-service, obsolescence, and disposal. There may be many elements of digital capabilities that are foundational to almost any foreseeable digital strategy so implementing them could be viewed as a valid preparatory first step in readiness for a strategic opportunity when it is recognized. The most important thing when it comes to implementing strategy is to gain the buy-in or understanding of those who will be affected by it, and understand the interconnected digital business ecosystem as well.


Crafting the modular capabilities to create the integral business solutions: Internal capabilities and processes are broken into modular service components that have standard open interfaces. Loose coupling makes it possible to change the components without affecting the system, as long as the interface is kept stable. The dynamic digital organizations need to get away from letting things fall through and start creating “integrated wholes” by utilizing the correct processes to solve these complexities, ultimately bridging the chasm between strategy and execution. Organizations need to close both capability gap which is the lack of certain capabilities, as well as the capacity gap which is a lack of 'the resources' needed by the processes which operationalize a capability to do a given amount of work. Align the different parts of the ecosystem to adopt more points of integration and incorporate the use of "stacks"— modular, layered and loosely coupled modular capabilities to build integral business solutions with:
-Ability to collaborate with their business counterparts.        
-Understanding of end customer expectations and experience.   
-Optimizing organizational structure (hierarchy, existing roles and skill sets)     
-Building technical abilities.
-Improving agility to move quickly, adapt and change course

Therefore, in order to succeed in today’s fast-changing digital business dynamic, harnessing the power of ecosystems is critical. Everything is interconnected and the business ecosystem becomes more interdependent and dynamic than ever, the all-permeating information has made every object of the digital system and nature responsive, communicative, and innovative. Organizations just have to keep evolving, ride above the learning curve and upcoming waves, and get digital ready with the steadfast speed.

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