Challenges of the Digital Transformation for Enterprise Companies - part 3

Hi all,

this is the 3rd part of some articles around the Digital Transformation for companies with the viewpoint from Germany (EMEA). In the last part I explained about the most crucial thing you need to have: a vision. Unfortunately, many companies are speaking of DX, but didn′t start to implement anything. Due to its complexity, I have split up the article in smaller parts.

• This article contains: Challenges - part 3
• You can find part 1 here: Intro and current situation
• and part 2 here: Vision

Let us now take a look, what will be some of the typical challenges you will be facing and what should be some dedicated topics which will need your full understanding, because these might be the hardest to overcome in the first steps. As I have mentioned in my previous article, the commitment from the executive levels has to be made and be visible. A vision needs to be defined and communicated. Think of the underlying vision in the next topics and about the consequence, if you try any of those without having your vision in place:

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The old mindset

From my experience, I can tell you that the first and probably biggest challenge you will need to face is the mindset. You will find different barriers in the following groups:

• Top management
• IT management
• All employees
• and probably even customers

People think that IT is just a tool which delivers the same value all the time. Its aim is to just work. Every outage is an unwanted situation. Computers and the underlying software, and probably the software which is being used daily should always keeps the same. Changes and updates always come with negative impact and should only be implemented if really necessary. Therefore, all changes need to be tested manually in advance to prevent any type of failures.

Do you think this is a medieval mindset?

It is - but you would wonder how consistently I have been confrontated with it.

This is the traditional way of thinking of IT. Projects are being planned in waterfall models with dedicated resources and dedicated time lines. They always create an extreme overhead and need long preparation times, because they always consume time. A lot of time.

In addition, many processes include manual workloads and take a lot of time, have dependencies and are disturbing in the whole picture.

Processes

Processes are one key point for improvement in the transformation itself. A good way to control these is by using any BPM solution and optimizing accordingly. Though, keep in mind that BPM solutions very often tend to find only incremental optimizations, but if you remember the quote from the last article:

The easiest way to fail in a Transformation is to handle it as an incremental change. And - the transformation will come. Either you will bring the transformation, or the transformation will come for you.

You need to be ready to cut off the old thinking and old approaches completely and start new plannings on white papers. Take a dedicated read here and here as it states:

Myth #2:  Focus on optimizing your business processes. Better to focus on rethinking your business model, not just optimizing your processes.

But both are working for the same goal and BPM is increasing in its importance and can become actually the tool to implement Digital Transformation. You can find further information in the following article:

Why BPM is now taking a central role in digital transformation

Digital Transformation

Let us try to simplify what DX now means:

And DX means even more:

It addresses all coming influencal changes of new and emerging IT technologies to people, companies, cities, countries and even culture. And actually it is better to name it for a company the Digital Business Transformation, as the Business itself will need to be transformed as well.

As an end result there should be a transformed company in all aspects of the digitalization and business remodeling to target your customers adoption & experience and being able to compete with your competitors.

But the transformation has actually no finishing date, because it is a continuous process of recapitulating current improvements and technologies. But to get this done, you will need a completely different mindset, as the old and very controlled way of waterfall models will not work here. One of the biggest problems of humans regarding changes is that mostly everyone doesn′t like drastical changes. Neither employees, nor IT-management or businesses themselves. Therefore, the changes are mostly started as incremental changes, which will result in big failures. This can easily be demonstrated with the DevOps adoption.

DevOps

From DevOps we learn that there are more metrics of interest. The following picture is from the DevOps report 2017 by Puppet and shows the difference between high and low performers. In addition, I added two arrows. The blue one stays for 'change' and the green one for 'resilience'. In the old mindset, people think that by increasing the change values the resilience values will decrease. Even worse than that, most IT departments even don′t use the metric for MTTR. This means that even the existence of any errors is unwanted by any means, even if these errors could be fixed in a short time frame.

What you see here is that commitment is extremely important.

You either do it correctly and adopt modern principles well with probably a complete transformation of your teams and underlying technologies, or you just continue to underperform. And then you will underperform in factors not in percentages!

Gartner just published new statistics one the current conference and they very devastating!

Keep in mind that the usage of modern approaches and technologies like adopting cloud services / features, using CI/CD and Infrastructure as a Code and also adopting automation everywhere will become necessary within the next time. The repetitive manual tasks in GUIs which most of the administrators are still doing today will not fit in these modern approaches. It will be necessary that IT administration people switch gears and advance in more automated techniques. Writing automation scripts will become a basic qualification for every IT-admin.

This does not mean that jobs are being replaced with automation.

We have the misconception that automation will take all the jobs and don′t recognize that it as an opportunity to improve. Actually the job roles will change and the admins will be able to spend their saved time in more complex topics - like managing the automations, setting and controlling any AI capabilities and more.

Agile

The next topic coming along this is the buzzword 'agile'. But what does it actually mean in this context?

Agile means to being able on reacting fast on market changes and necessities coming from your own business to possibly adopt new technologies, methods, processes ('change') in a short time frame without disrupting your daily business ('resilience') too much. Later on, you will even be able to go for a trial/error approach and testing the changes directly on your customers and / or employees / your business to see if it was an improvement. In software development you will continuously revalidate your goals in short time frames and possibly retrieve even feedback directly from early adopters to create a fast developing and improving application. And you will do the same with new technologies or processes within your own business!

The problem of working in an agile approach or adopting DevOps principles is the necessity of new working styles. People need to work together what they probably normally don′t. Small teams need to make decisions on their own and long waiting cycles are extremely unpleasent. Therefore, the currently existing processes and even the complete organizational structure will not fit.

Organizational structure

You need to take a very close look at your organizational structures, as the current one is completely directed to the old way of working. Many companies are having a very granularly specified hierarchical structure with clearly defined job roles. In the new model, people have to work together sitting in completely different teams with possibly much more complex job roles. It needs to be fast and therefore small teams should be able to make their own decisions. In the end, you might want to target a Network structure, though there are not many companies out there today, which follow this approach.

Change adoption

One of the biggest errors I always see when moving into the mentioned new approaches is the lack of change adoption. Customers try to create business justifications based on hypothetical forecasts of users behavior and the benefit of the tools, but completely ignore that new tools need to be explained. Users will always work with the new tools with their old mindset and trying to achieve what they previously achieved. If you introduce new tools, which also want to enforce the new working style, as working more in dynamical teams, then you need not only to explain the new tools, but also how they can be used to achieve more!

The directly following big error is that technicians tend to explain tools in a technical way e.g. 'this is the new button - by clicking it you can show the people working on the document'.

A much better approach is to explain new tools with use cases. What is the benefit of having a new technical feature and how can an employee make use of it in its daily tasks.

Knowledge management

This all results in knowledge management. You will need to store knowledge for different target groups. I will show you just some of them:

• employees in different groups - using different toolsets
• IT support
• IT teams
• Developers
• Security teams - especially with GDPR
• more

In addition this knowledge management combined with change adoption needs good strategies on how you should share your information over time and where you should store it:

• internal knowledge sites
• webcasts
• notebooks
• workshops (don′t make them too long/technical - people forget too much)
• daily hints
• more

As IT is changing with higher impact and more frequently and in addition you also have many employees in your company lacking IT skills, this might become a tough challenge. There is a reason why you can read that IT-expertise will become a basic skill for most of the jobs much sooner than you think. The new generation might be much more capable to adopt new technologies, but for most industries this doesn′t count, because they have an average age of 45 and higher. Make personas and identify the people types in your company. As a result you will be capable to define a strategy that might be best for sharing, storing information, but also how to keep it continuously up to date.

Bottom line

Up till here, you have read about many of the challenges you will face on your stony road of the transformation. The transformation is hard - no one said that it′s going to be easy.

This doesn′t mean that you can postpone the transformation forever.

You need to make your hands dirty - and the sooner you start the higher is the chance that you will be one step ahead than your direct competitors.

Take also a read on the following article, which contains extremely helpful insights and shows that the pressure is increasing:

Thank you very much for reading and happy to retrieve some feedback on this. Tell me also, if you liked it.

All the best,

David das Neves