Welcome to Part 4 of our series on the transformation toward a digital core.
Last time, we looked at the six value levers for the efficiency and effectiveness dimension and discussed how much of the benefit of a digitized core comes from saving time thanks to automation and zero touch processes.
In this unit we will go into our last dimension: Agility.
As described thoroughly by Kharabe (2012), agility in organizations has been defined across multiple studies. On one side, agility in organizations is defined by the speed of which an enterprise can react to changes and make decisions accordingly (Judge & Miller, 1991). The ease of change has been described by Bahrami (1992), focusing more on flexibility. A third characteristic of agility is the ability to sense environmental changes (Sambamurthy, Bharadwaj, & Grover, 2003).
Following the Kharabes (2012) recommendation, we will use the definition by Tallon & Pinsonneault (2011): “[Organizational] agility [is] defined as the ability to detect and respond to opportunities and threats in the environment with ease, speed and dexterity.” This definition includes all three of the above-mentioned characteristics of agility.
Increase process flexibility
Increasing process flexibility is the first value lever in the agility dimension. Flexibility can be defined as the ability to respond to a change in the environment without disappearing or being replaced. If we transfer that to business processes, we now talk about the ability of that process to adapt to changes. A simple example is a line of business that sees the need to change a fixed process in order to make it easier to use. In the past such changes were possible only through high-effort IT investments and adoptions.
Now, with a digitized core and increased ease of use, users can define their own processes or alerts with no deep IT knowledge, on the fly and on any device.
Increase organizational agility
Increasing organizational agility describes the new ability to easily change the organizational structure without having to deploy an IT project. Usually the representation of the structure of an organization within an IT system is lagging behind actual structure, since organizational changes have actually immediate effect. Especially when dealing with company mergers, affected processes and structures will be adjusted in less time.
With today’s capabilities and the innovation available in a digitized core, a flexible collaboration both on business and IT level is available. With new business insights and with blurring borders between LOB applications, it is now easy to introduce organizations and employees to new processes and see quick adoption.
Assimilate process innovation
The digital economy constantly pushes organizations to change and rethink their processes. Inflexible organizational constellations make this a complicated matter: Process changes must be made and tested by IT, creating a long road from idea to actual adoption and use. With a digitized core, changes can either be made directly by users or deployed as a whole.
An intuitive and flexible user design speeds up end-user adoption, allowing collaborative work patterns. The ability to engage talent across the organization is a huge benefit for this value lever. New talents from the merged organization can be transferred and developed where they are needed without any distractions.
Successful adaption so far
The real value in a digitized core lies not in the obvious cost reduction and TCO (which is praised everywhere nowadays), but in unleashing the power inside of your enterprise, including intellectual and IT power. With solutions that support and enable enterprises in every process, employees finally have the ability and the time to develop and push their ideas forward and transform the organization from both inside and out.
I hope you enjoyed the journey into the modern requirements towards a digitized core as much as I did. To summarize, the new environment – the digital economy with all the disruptive technologies and trends like the segment of one – pushes forward and forces organizations to transform. Otherwise they will be history.
But complexity prevents quick transformation. The solution is to tackle that complexity, unburden employees and processes, and drive digital transformation in your enterprise. With software and IT designed for the last century, it is no surprise that you cannot handle the technologies of the new millennium.
The core therefore needs to be redesigned and brought up to date. This new digital core will be able to handle the complexity. It helps to leverage disruptive technologies and deliver what your customers expect and need. To cite some examples, you need to leverage the Internet of Things and make full use of connected manufacturing in order to deal with customization and lot size one, which in turn will give your customers a personalized experience.
The real value of a digitized core is not in the obvious reduction of a data footprint or a general TCO conversation. It is about unleashing the power and the brain inside your enterprise: your employees.
The world has changed significantly, and the technical building blocks of the digital economy define new ways to look at your company’s market opportunities.
Providing an IT infrastructure that does not stand in the way, but rather supports employees in every process, enables your employees to focus on their most important tasks.
Software and services these days need to move away from documentation and toward supporting decisions. This will enable the great minds in your organization to push forward their ideas and transform the organization from the inside.
Read the previous posts in this series: