Is the enterprise ready to transform?
Enterprise transformation is a broad term, covering every aspect of the business and value proposition. The businesses that succeed are those that can keep up with accelerating change of processes enabled by new technologies and quick to empower a new culture in the organization. Usually, companies are in a sprint to “out digital” their competitors with their transformations. As a result, they are launching project after project focused on everything including mobile, virtual, big data and almost everything else that either includes or implies the word “digital”. That kind of thinking isn’t bad, but it misses the real motivation behind why transformation should occur.
Few enterprises consider the more important step that needs to be taken first: recognizing the challenges that should motivate those changes. A white paper by Professor William B. Rouse from the Georgia Institute of Technology discusses the context-sensitive nature of enterprise transformation, noting that each enterprise faces unique issues that must be identified before transformation can be implemented. Rouse argues that these issues stem from value deficiencies that hurt some part of a business, and are remedied by changes to internal and external work processes along with reallocation of resources to facilitate a better response to address those deficiencies.
An example of a transformation addressing a value deficiency is illustrated by IBM and its transformation in the centralized computing marketplace. Their primary competitor in the early half of the 19th century, Remington-Rand, had the edge in acquiring major public contracts. IBM, seeing a loss of value due to competition, transformed their enterprise to be more responsive to consumer trends by capitalizing on targeted marketing. As a result, the centralized computing market of the 1950s and 60s was dominated by IBM. IBM successfully transformed their enterprise by recognizing a loss of value and restructuring their company processes and culture to adapt and exploit new value in the market.
Was IBM making a big change? Not necessarily; the core of their intraprise – the internal work and production processes of the company – remained intact. The transformation of an enterprise is more than transformation of the business model, the process we deliver our value with, or our ability to develop our people. The difference came from a small change in perspective on the marketplace: instead of seeking out contracts, they advertised to customers to generate their contracts and sales. In the modern marketplace, these small changes are facilitated by digital options that are so critical that incorporating a digital strategy into the business model must become a pillar of the enterprise transformation.
The challenge is that successfully transforming your organization and incorporating a digital strategy model is not a project and is not a technology that can be purchased. It is a capability that must be carefully defined, architected and executed. A small change focused around a value deficiency can lead to a digital capability that helps your enterprise keep up with accelerating changes and empowers a new culture within your transformed enterprise.