Thursday, March 1, 2018

Three Management Models to Evaluate the Digital Readiness of the Business

Change can flow on the surface whereas digital transformation needs to permeate into business vision, strategy, culture, communication, or process, etc.

Digital transformation has a high level of impact and complexity because it expands to every direction of the organization. Many organizations are still confused digital with general technology adoption. In practice, doing digital is perhaps about taking some initiatives for applying the latest technologies or gadgets, but it's a significant shift from doing digital to going digital and being digital. Digitalization efforts need to be undertaken as the means of getting to a set of differentiated business capabilities to accomplish the well-defined goals and improve the overall business performance, responsiveness, and maturity. Here are three management models to evaluate the digital readiness of the business.

Change Impact Model: Digitalization is the radical change. The change must be defined in its base elements and associated benefits to be achieved via financial, market share, or productivity perspectives. It is one thing to establish a future state and understand the intended outcome of the change, but it is quite another challenge to implement and measure the business progress to the future state. The dynamics of digital where change situations overlap can also make change measurement extremely challenging. Change indeed is difficult to measure unless all parties involved in the change take ownership of the change and see why and what the change is about. Externally driven change is much more difficult to measure than internally driven change. Because it is the lack of adequate control of the objectives, plan, program budget and key deliverables. It also depends on the source of change. Synthesis of Socio-Technical Systems (STS) Analysis is the change impact model to measure change-readiness against the contexts of goals, people, processes, procedures, infrastructure, technology, and culture. If you have good change-readiness, and then you will probably be better at change (measure the input, not the output - it's too late to do anything about it by then).

RACI (Responsible, Accountable, Consulted or Informed) model: Thanks for the digital convenience brought by the powerful collaboration platforms and tools, organizations now have better opportunities to function as a whole, and enforce cross-functional communication and collaboration. Flatter structures will help to speed up organizational responses to changing markets. To improve the digital readiness of the business, organizational development needs to manage the conflict between classic style and digital style of management. The classic management expects command-control, younger generations demand engagement; the classic management views the performance from a behavioral compliance perspective, but younger generations view performance as the knowledge-based working, learning experience, as well as learnig-doing continuum. The classic management enforces hiearchical relationship; the the digital platforms and tools enhance cross-functional communication and collaboration. To evaluate the digital readiness of the business, the in-depth RACI (list tasks and identify if they are Responsible, Accountable, Consulted or Informed) Analysis should be done as part of the performance objective setting exercise to identify overlapping roles, have each staff member or group identify their duties, get a solid understanding of the group dynamic and where some re-organization practice might help. There are quantifiable elements such as inefficiencies which can be brought to light by leveraging the right management system, so the business management can improve the overall business efficiency and effectiveness.

PIICC IT model: In today’s digital dynamic and technical environments where Information and Technology are being used more and more around the globe for revenue generating initiatives and the business is becoming IT. A Digital-Ready IT is a thresholding competency for running a digital organization. Therefore, IT assessment helps IT management diagnose the early signal for dysfunctional operation, take a critical look at IT strength and weakness, with the goal to improve IT performance. In reality, the organizational modern information management environment is often fraught with inconsistency, redundancy, and multiple data and knowledge platforms. IT management should have the ability to transform manual business processes and requirements to design and implementation so that the organization’s vision and goal can be realized. More specifically, the “PICC” IT model makes an objective assessment of:

-Performance managememt for both bottom line “Keep the lights on,” and the top-line revenue growth.

-IT portfolio delivered on value to the business (beyond just on time & budget)

- Innovation Management

- Cost optimization

-Customer satisfaction (both internal IT customers and end customers accordingly)

Change can flow on the surface whereas digital transformation needs to permeate into business vision, strategy, culture, communication, or process, etc. Thus, evaluating the digital readiness of the business is important to allow room for adjustments and keeping it dynamic, in order to manage a high mature business. Either tuning managerial hierarchy or optimizing information flow structure is an easy part, the difficult part is how to overcome fear or hesitation, break down silos, set up growth opportunities and leverage a structural approach to well align people, process, and technology, to make change happen not only on the structural surface but via fine-tuning business capacity, and lead digital paradigm shift seamlessly.


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