This article was moved to MDriven Wiki – DIGITALIZATION FOR CEO’S
Everyone knows that there are gains to be had by going digital. Exactly what gains and were to start is however not obvious. Advice are plenty but often risky – involving high bets on specific schemes that often enrich the company that gave you the advice in the first place. You know that you will need to do something soon – but you are not prepared to jump high and far when you know from experience that any lasting progress always comes from getting a bit better every day – and by continuing that process. Progress is never acquired – it is always gained by work.
Most CEO’s has this fear of doing too little and at the same time the fear of choosing the wrong path. To manage the fear you may hire a CIO. Once the CIO is in place the fear moves to the CIO – but it does not remove the fear from the company and the core issues are not handled.
In order to understand the challenges you will be helped by dividing the company’s processes into two areas.
The first area – core business – here you need your company to compete with rivals. In this area you hire personnel that is smart, creative, solves all problems and you do not care that much about prior experience, instead you focus on ability to learn. It makes a lot of sense to ignore exact matched experience if you think that you are unique – where would they have acquired this experience from? You focus on the ability to learn and adapt – since being best is not static – it needs constant sharpening.
It is unlikely that you will find a perfect off-the-shelf information system to license for this area. I say unlikely because if you find a perfect COTS-product then you are probably not as unique as you need to be to win. And even if it is perfect today – will it evolve in the same direction as you need to in order to win tomorrow?
The second area of your business processes are the areas that you must have due to regulations or common business hygiene. The personnel you hire to operate these functions are often hired based on prior experience. Ideally there should be nothing unique in this area – your company should follow the rules and laws – but not over doing it – and never miss on a requirement. In this areas you will benefit from finding COTS products – riding on the knowledge of others on how relevant processes are upheld and streamlined.
What are typical “hygiene” areas? It varies from business to business – but it is not uncommon for manufacturing companies to see human relations, salary, travel expenses and IT-support as NOT core business functions.
Examples of core business functions for a manufacturing company can be supply, demand, goods procurement and research and development.
The core business functions may find highly specialized commercial business support systems per function to solve specific tasks. But with digitalization we aim higher – we want all the departments to share information – and we want to support new or improved ways of working with digital tools so that the talent we employ is not weighed down with mundane administration.
Today this is often solved with department-owned excel spreadsheets. Spreadsheets are copied and moved around between departments and even if this constitutes information sharing it has several caveats.
- It is a risk that one part of the organization base decision on outdated excel data.
- It is common that departments only see part of the information and that they are less able to understand the whole picture.
- It is not uncommon that queues build up to centrally placed spreadsheets if there are many that needs to write to it.
- It is not uncommon that yet another copy of the spreadsheet is created to solve a need found in one part of the organization but not understood or communicated to the other parts.
- It opens up for protectionism between departments – misplaced protection of company assets that makes work harder for your employees and thus more expensive.
- Spreadsheets cannot have granular access rights so that you can expose from who we buy but not the price – instead we create two spreadsheets and risk that they get out of sync.
- Every employee can create their own flavor of spreadsheet and that level of freedom does not help the company compete.
- Spreadsheet break – and we waste time piecing them back together.
You probably can think of even more issues that arise when you rely on excel for critical business data – but the up side is that it is very flexible and the spreadsheets are owned by the business and not by the IT-department.
The fact that the business becomes independent in providing a business support system is important. If they rely on the IT department to find the best solution it would take a lot of energy and fighting spirit to actually get things usable. And since we know that our needs change – chances are that the needs change faster than the delivery speed of the IT department.
People working in IT often need to be convinced that the business need for change is real and not something we made up just to make life harder for IT – and these discussions are both time consuming, exhausting and does not create any business value.
To get a working system in place is also hard to do in one go – in excel you tweak and tweak until you do not need to tweak any more – but the IT-department often requires a complete specification and they will hold you to it; even if it is wrong in some aspect and you find this out before delivery you will still get what you asked for in the first place.
The common critique regarding Excel from information architects is that it is too brittle and does not help to build a Meta understanding of the information the business use. Excel does not require you to name data – and since there is no naming the words used to describe it is often different for everyone that comes in contact with the data.
This is not optimal – you will not know how much efficiency you lose by not having a high level Meta data understanding of your business needs until you get one so that you can compare. But I will argue that it is really important to get this understanding in place in order to see the bigger picture of information use – and once you do you will probably find many synergies and information reuse possibilities that you have not yet taken advantage of in your organization.
It is when you start to see all the data you use and start to understand the dynamics of your information – in what order data is refined and used – it is then you can say that you are on a good path to digitalization of your core processes. And once on this path – you must continue to walk it.
Walking the path of digitalization will put information technology into use a bit more each day in your business. As more and more information support is provided you lessen the burden on your employees. You will notice this as increased productivity. As you get the right digitalization up and running you will notice more consistent results and higher quality of the artifacts used by and delivered from the business.
If you do this right your most talented employees will look further and will see more possibilities. When your departments get together and own the process of getting better information management support each day – you know that you can relax a bit. If you get here you have created a self-digitalizing company where employees make themselves more efficient as part of the daily routine. That is how you want to digitalize your company. No struggle trying to force systems in from above – instead let them grow from below. This way you get acceptance from the employees and you use the very best of their talents to build systems that will help you win.