Digital Transformation: How Can You Tell?
Geoffrey Moore
Author, speaker, advisor, best known for Crossing the Chasm, Zone to Win and The Infinite Staircase. Board Member of nLight, WorkFusion, and Phaidra. Chairman Emeritus Chasm Group & Chasm Institute.
Having talked about digital transformation for the better part of a decade, we are now experiencing a tornado of adoption, specifically in those areas that support working from home. But video conferencing is just one face of a many faceted jewel, and the returns people are envisioning from digital transformation go way beyond Zoom. So, in the context of that larger journey, how can you tell where you are or where you need to go next?
I would be lost here but for the fact that, in my own Zoom sessions, I get to talk to super-smart people like Geng Lin, the CTO of F5, and Alex Lyashok, the CEO of WorkFusion. Each of them references a three-stage journey which I believe can be easily instrumented so that mere mortals can navigate the most important technology disruption of our time. The end of that journey is to enable or amplify every value-adding process with an increasingly ubiquitous digital fabric, the marginal cost of which is asymptotically approaching zero.
Stage One of this journey is task automation. We have been at this most of my adult life, with the 20th century focused on automating the back office and then the supply chain, and the 21st on the front office, the customer relationship, and all the other external relationships that go along with it. The goal of task automation is to take out dollar cost and time latency, improve quality and reliability, and free up time, talent, and management attention for more value-adding efforts.
A secondary effect of task automation, made prominent by the move to cloud computing and API-oriented architectures, is that it builds a library of active services that can be knit together to automate a complex suite of processes end to end. This is Stage Two of digital transformation. The focus is not on task automation but rather business outcome enablement. Onboarding a new customer, closing and provisioning a purchase order, shipping or returning merchandise, training a new employee, defending against a cyber-attacker—the goal is not to automate so much as to orchestrate.
Stage Two transactions still incorporate humans in the loop, in part because not all parts of the process may have been automated, but more importantly to insert governance, judgment, and decision-making. The challenge is that, for whole classes of outcomes, there is either too much volume, too much noise, or too little time for human intervention to be effective. Enter Stage Three.
Stage Three applies artificial intelligence and machine learning to close the loop without human intervention. Today this is commonplace in digital marketing and cybersecurity, but for the bulk of business processes today, it has yet to cross the chasm. Indeed, most companies are still in the early phase of Stage Two, identifying those business outcomes that would benefit the most from digital enablement, and prioritizing them for immediate attention.
The challenge here, and the opportunity for companies like F5 and WorkFusion, is to provide a software layer of abstraction that can support Stage Two at scale and be a platform for Stage Three. This is where a lot of the action will be for the rest of this decade.
From an enterprise point of view, this model alerts decision makers to examine their current state. Inertial momentum may favor continuing to improve task automation with Stage One investments, but it is clear that digital transformation requires shifting the focus to business outcome enablement and investing in the technologies that enable it. The ultimate metrics here are business outcome related—competitive advantage, customer success, realized innovation, employee satisfaction. Each stage contributes to these outcomes, but the big lever today is Stage Two.
So, the three questions to ask about your digital transformation are:
- What are the most important outcomes in our business model?
- Have we made each a focal point in its own right?
- How close are we to digitally enabling them end to end?
That’s what I think. What do you think?
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Geoffrey Moore | Zone to Win | Geoffrey Moore Twitter | Geoffrey Moore YouTube
Finance & Strategy Executive
3 年Great sharing! Geoffrey Moore Companies across industries are investing in digital transformations to improve productivity and deliver innovative customer-centric software. Investing in Digital Transformation of Accounts Payable Invoices also benefiting so much! No More Misplaced Accounts Payable Invoices, Increased Employee Satisfaction & so on
Product Discovery & Strategy, AI @ PwC | $500M Scoped | Product Management, Business & Process Strategy, Transformation Discovery, AI Strategy
3 年Great post. It's paramount that companies own the movement of data b/w systems. An integration-first focal point, recognizing that no single SaaS provider has the core competency to orchestrate their entire business strategy successfully. SaaS providers require humility, integrity, and clarity to identify where their service ends and create a network to support their customers' business strategy.
Asset Data and Information strategist enabling design-to-disposal lifecycle management implementation, governance, and efficiency
4 年I like how you think. I think that many well-intended organizations struggle with defining and sustaining the momentum and stage 1.
CEO of JourneyDXP @ JourneyDXP | Driving Growth with Innovative Solutions
4 年B2B companies have lagged in digital transformation but most are now shifting to a digital-first model. The B2B leaders we work with are prioritizing the customer experience (synchronous & asynchronous) with a Stage Two design for the greatest impact. Simply, digital automates the customer activities that account teams have historically struggled to complete with impact. With digital doing much of the heavy lifting (marketing, selling, and account management), the humans can spend time doing what they do well - building relationships, networking, discovering new opportunities, resource alignment, and establishing a higher level of trust between organizations.
Sr. Mgr., Quality Assurance at Actalent Services, LLC
4 年Good discussions. The 3 stage approach should provide valuable insight for those of us trying to adopt technology to support our business plans and enhance our market advantage. The key to technological preeminence is to maintain the technology in the forefront of our planning so we are successful in our new virtual reality and provide the best choice to our customers.