perspectives/edition8-modern-digital-business
EDITION #8 I RELEASED January 2020
Becoming a modern digital business in 2020
Standing on the cusp of a new decade, many enterprises are still struggling to process the technology-driven disruption of the last 10 years. 2020 should begin with the resolution to develop a modern digital business.
Modern digital businesses are defined by the capacity to anticipate and embrace change, rather than adapt to it after the fact. They remove areas of internal friction to support more seamless ways of working, and harness technology to identify and seize on new business opportunities. In this issue of Perspectives we break down the blocks from which modern digital businesses are built.
Source: KPMG 2019 US CEO outlook
The Mission
The perception that digital transformation is by definition a massive - and expensive - undertaking is a key reason why many such transformations fail to achieve any lasting success. For the modern digital business transformation isn’t defined by ‘big bangs,’ but ‘thin slices’ - carefully targeted change programs designed for specific outcomes. These embed transformation organically throughout all levels of the organization - one meaningful shift at a time.
“(A thin slice) has to be something significant because it has to be impactful, and needs to touch all parts of the business. Use it to identify the antibodies that exist in your own organization that will stop change, and do something about them. Then do another thin slice to solve something else. Keep going, and by the fourth or fifth slice, the entire company will be part of the program. You build a great culture and let people fold into it, rather than trying to roll it out.”
Gary O'Brien, Digital Fluency Principal, ThoughtWorks
The MDB Building Blocks
i. A frictionless operating model
Becoming a modern digital business has as much to do with how people and teams work together as technological change. Making organizational adjustments that break down functional barriers and allow technology to feed into strategic decision-making enables the entire enterprise to mobilize around a single shared measure of success - the creation of customer value.
"There’s always going to be silos in your organization. The trick is to work out where’s the least damaging place for silos to be created. A big part of what holds enterprises back from becoming a modern digital business is organizing along reporting lines as opposed to lines that create value for customers.”
Ange Ferguson, Group Managing Director for Digital Transformation, ThoughtWorks
ii. Platform strategy
The modern digital business has to be able to evolve quickly and experiment fearlessly to address volatile strategic and customer demands. That requires a solid, yet flexible and versatile, technology platform capable of supporting a ‘plug and play’ approach to the development of new products and services. The best platform strategies ensure enterprises can leverage new digital tools, without losing the advantages of the technologies and processes that came before.
Digital platform strategy blueprint
iii. Experience design and product capability
If customer value is how the performance of the modern digital business is ultimately measured, product design and development has one overarching goal - to enhance customer experience. And learning about that experience entails listening to the customer, not the enterprise’s own views or preconceptions. In a digital business it is data that acts as the enterprise’s ear to the ground, providing a steady stream of insight on customer needs.
Customer experience's business and staff impact
Experience driven businesses have:
Source: Forrester Consulting, Adobe
iv. Intelligence-driven decision making
Machine learning and artificial intelligence enable organizations to turn data into a strategic resource. By capturing the trends and patterns that signal change is coming, these tools give the enterprise time to prepare and act, often one step ahead of the competition. But while technology provides the foundation, it’s the ability to take data and factor it into key decisions and the development of new business hypotheses that defines the higher levels of digital fluency.
Connected intelligence cycle
v. Engineering culture, delivery mindset
To effectively leverage technology to serve business goals, the modern digital business needs a critical mass of technical excellence. A thriving engineering culture is defined by a deep knowledge of software practices and the skilled application of technology. It also exhibits a high degree of integration with the rest of the organization, as no great technology team can innovate in a way that serves the business if it works in isolation.
“This is one area where Chinese companies are actually more flexible than those in the West. Innovation is incubated internally, not externally. And technology isn’t just an enhancement to the business or business model - it’s creating new business models altogether.”
Ran Xiao, Head of Innovation, ThoughtWorks China
