7 steps to get started towards - Digital transformation journey

Digital transformation is the process by which companies embed technologies across their businesses to drive market and value. To reduce costs , enhance agility, efficient and explore data-driven decision-making , it is now a new normal to adopt digital transformation.

It is redefining the business model , new process / redesigning processes end-to-end in line with market and company strategy while all customers , channels have gone digital. It is all about "data" - get the data , protect the data , analyze the data , utilize the data via futuristic technologies - AI , ML , iot , RPA , VR ..etc.

Digital is bigger circle while many legacy to modern transformation ( is a subset of overall digital ) . Digital is more than legacy to cloud .Digital is to aim at making future proof , client first and secure scalable systems.

Use cases of digital in industry with AI , Big data , iot , SMAC

a) Retail industry for example AI is reinventing – product cataloging , merchandising , Customer service , promotions , replenishment , demand forecasting , pricing and logistics. Retailers like Zara and Mango – integrate personalization to better understand consumer behavior – recommend product intuitively and influence demand. AI checks for browsing history , Facebook conversations, Instagram followers to provide insights and thus recommends products , offers?– drive impulse purchases for Amazon , Netflix.

?Macy app – guides shoppers on location of products in stores via NLP

?Nestle – deployed robots as sales assistants in retail stores in Japan

b) logistics industry , AI algorithms leverage historical trip sheets and real time stats to estimate the delivery time of the shipment / route optimization or resource utilization at warehouse. Such instances are helping retailers like : Sysco , Walmart , Tesco & logistics like – DHL , UPS ,Fedex. Airports deploy AI scheduling to allocate parking slots.

c) healthcare for instance a chatbot in Aetna has been providing round the clock assistance to new members in using its website , guiding them through the registration process , helping with recover UID/ password etc.Chatbot responds to product queries in the insurance space and makes offers after analyzing their needs. Healthcare providers having Digital avatars providing trusted real time care without having to visit ER.

Increased business agility , unlocking new value for customers and shareholders and increase the reach of services in overall market with services more personal, efficient, and responsive.

But while its no brainer , is there a way companies can adopt this in a more prescribed way ? Any checklist ?

"The Right product" and "The Right process to build that Right product " would be the key. Most important is to understand what is the definition of Product to the context of company's value services as differentiators.

What are Typical TRIGGERS for digital transformation ?

Typical triggers in large digital transformations can be split into 4 categories

1.????EXPERIENCE

• ?Monolithic architecture that is inflexible for building digital-first experience products
• ?Lack of an omni channel experience for users. Absence of self-service capabilities ?.
• Millennials seek digital touch and experiences

2.????FOUNDATION -

• Very high technical debt as a result of ageing technologies, data redundancies, redundancy of application business logic, lack of standardization and lack of tool rationalization .
• Not all the landscape is automation-ready.
• Systems are inflexible to redesign and have high costs to operate

3.????CORE

• Hard coded rules and business logic?
• Obsolete technology – legacy (eg: mainframe , access database , macros ) , batch processing

??4.??Environment

• Isolated Business and IT - ways of working Silos between IT and business and disjoint working
• Cyber security , Speed to roll out with regulations

Financial Institutions are staring at 300 Million pages of regulations , way beyond what employees will be able to handle. Currently banks spend USD 270 BILLION each year on regulatory compliance . Only way is to adopt automation by AI – to manage the scale.

• Competing neobanks and fintech - for Banks , there is an increase competence with fintech .

Well , each company and context is varied but largely we can generalize on what they need to work through to be prepared in this journey to get the initial nudge. Having led and seen many digital transformations across banks largely below is my experiential view ( would be using Scaled agile and related terminology here , but any large scale framework can be applied with equivalent principles )

TRANSFORMATION steps - starting with below 7

1.????IDENTIFY SYSTEMS and use multi SPEED SPLIT

Apply Systems thinking as an approach to focus on a system's constituent parts , how they are interrelated and 1 size approach will not fit for systems diverse in tech stack , technology . Hence we need to segregate and apply speed basis the intent of the system as its being consumed in overall model of interaction.

?????????Systems of Engagement / Experience?( Speed 1 ) –primarily experience-focused, requiring highest level of agility aligned to delivering highest-value capabilities/features rapidly . This can be front end portals , mobile apps

????????Systems of Enablement?( Speed 2 ) – “as-a-Service”?primarily act as suppliers to other workstreams. This can be systems that are exposed as services / platform that get invoked from front end portals , mobile app .

????????Systems of Record ?( Speed 3 )– where deliverables are the least agile and require larger releases to deliver value – This can be core PLATFORM , legacy heavy

?Applying systems approach would help to focus on sub systems and optimize .

While identifying these - think also to simplify . We are here not to lift and shift from legacy to cloud. It is also about systems being decommissioned , systems being merged/rationalized/simplified. ..Categorize the essential applications under these systems that must be enhanced / uplifted on new technology .

2.????IDENTIFICATION OF USER JOURNEYS and VSM–

For the identified systems in (1 ) draw out operational value stream and customer journeys that criss cross these systems .

Operational value stream is?the sequence of steps required for a product/service delivery to a customer ( here can be internal customer or a product integrating with service ).

This is also an opportunity to become leaner and efficient by identification of non value add steps in this value stream and knocking out / making way for leaner workflow - that can reduce overall lead time , cycle time , flow efficiency . This is where value stream mapping can be done - for transformed journey .

These journeys must be pivotal focal area of execution and improvement.

We then map outcomes that can be targeted by journey and roadmap / journey.

?3.????ORGANISATION's REDESIGN around JOURNEYs

With 2 ) done , we need to now think of setting teams around these journeys .We need to instrument with team structures that help them own , be accountable E2E ( end to end ) with minimum overlap across other groups . This would help the overall predictability of flow of work from these teams .

o?? Full stack teams per SPEED around identified JOURNEY / VALUE STREAM ?? So each journey will have max 2 variants of teams - feature and enabler and overall shared services that can either be seeded inside journey for central optimization . If economies of scale do not fit central seeding per journey these can stay outside at program level. This Speed 3 inclusion can vary journey to journey .

• Speed 1 teams - Feature
• Speed 2 teams - Enablers ( technical )
• Speed 3 teams – Platform ( program level shared services or seeded inside)

?set up peripheral teams ( shared services ) that are common pool in that journey

1. ?Release Management ,
2. Product Management / Advanced Planning
3. ?Program Management ,
4. ?Devops / Infra / tool / security

?4.????Define ROADMAP by JOURNEY - MVP scope

·??????Spilt each JOURNEY into CAPABILITY and FEATURES . Define MVP basis the release calendar of what all features per journey . This roadmap is key for all the journey teams to come together as a "defined goal" .

?o??Product Management works on product classification with architecture – capability – epics and mapping of these to form a hierarchy

o??These are then used to prioritize and build MVP , roadmap

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The product management team works towards decomposition of the high level architecture blocks ( level 0 ) into level 1 ( that we relate as journeys ). Each journey will have multiple capabilities that get prioritized on a journey roadmap to be delivered across multiple PIs .?Each capability is distilled into features.

We believe the roadmap and scope baselines needs to be organized as per the Value Streams . Create cross-functional “Advanced Planning Team” dedicated to forward-looking planning with business owners multiple sprints Or in SAFE terms 1 Program Increment ahead.

It is important for the teams to be aware of MVP at the time of PI planning so that they can build their plans with the right priorities in mind. Portfolio level MVP will be derived during the Value Stream Framing into Features level MVP (i.e. set of features which represents the MVP for the coming PI planning). MVP is shared and confirmed during pre-PI planning.

Speed is important for MVP release.

Hence it is vital to use better process , sophisticated CI CD , automated tools to enable. Hence the peripheral teams must start to work on foundation / runway to lay down automated process to scale vertically eg :

?Auto healing for App, Infra, Data

?Auto ticket creation

?Zero touch automation – Bots, Scrips

5.????LEAN GOVERANCE - roles and metrics

With journeys and respective MVP defined / identified and foundation of DevOps , automation getting the nudge , we need to think of overall governance at executive or portfolio level that can monitor and centrally tie the strategy of digital transformation initiatives to execution under various journeys ( sub portfolio / LOBs ) etc.

Right executive Roles

Have the steering committee , councils at program level

1. TMO ( transformational management office )?representation from Delivery Mgmt., Consulting , Program Mgmt., and Organizational Change Management
2. Councils- Product and Architectural - that is accountable for the proactive planning and Decisioning:
3. Establish Lean Agile Center of Excellence (LACE)- team to accelerate the transformation. LACE’s Charter ensures that the organization operates within Lean-Agile values, principles & practices , establishing Agile Practices, guidelines, guardrails and maturity assessments.

?TMO and LACE helps execute decision for proposed changes working with councils.

Dashboards and Metrics

Define metrics to monitor the progress ( IT ) for lean goverance teams to make decisions . Fundamentally EXECUTION metrics are there to measure performance . These metrics usually fall under 2 categories: - DO MORE metrics and DO BETTER metrics. We can define at team and program level to start .

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Build dashboards in the tool to have the data driven discussions in the prescribed events ?( at team , journey , program levels )

?6.??INCREMENTAL execution - pilot and extrapolate

With org change management underway , it is vital we have this propagate incrementally .

Know how of legacy code and dependencies across systems , applications takes vast time to excavate ?and prioritize. Co existence between keeping lights on via legacy and also at same time drawing out from incremental modern features – balance of these and data sync up across legacy and modern environments for a true ‘zero disruption” model. All this needs a well instrumented plan. Start small with 1-2 journey/s - nimble and then iterate , incrementally to other journeys

Execution can be based on initial assessment on journeys , basis the early adopters and laggards we can carry out incremental approach of portfolios and journey/s.

Based on the agile maturity level of the journey , specific trainings and coaching will take you to the next levels. Coaches should be embedded across all journeys to mentor and support teams.

Basis the feedback and value generated , rest can latch on and hence momentum can swell out ( rather can going big bang transformation ). Have the lean governance conduct review of funding , backlog ( MVP ) and value being derived over 2-3 PIs. Watch out the metrics and dashboards .

7. Define and measure Outcomes

Will only IT Metrics help in this digital transformation ?

No..

We need business outcomes .

Move to Outcome Based model, agree on business Metrics ( OKRs ) per journey / capability for tight coupling on the shared risks with business and IT.

OKR can be at journey or capability level . Business Value as been demonstrated in line with the original expectations per PI?. This?require Value Realization Office to be involved in order to define and measure the value per journey.

OKRs

1. General CSAT- Measured by CSAT survey to ultimate consumers
2. Features Delivered in Modern UX- ?Retire the OLD Site and Build out the Capabilities on the new Experience Capabilities Delivered
3. Digital to Analog Interactions- ??Drive Operational Efficiency / Cost Savings with improved digital to analog ratio

The baseline will be established after few PIs and will be reviewed / updated quarterly to accommodate for changes that could not anticipated at time of the baseline.

Disclaimer - this is my experience and does not add up as a full view.

Please do input your thoughts , suggestions and point of view to enrich this write up.