The Digital Transformation: Turning Lead into Gold
From almost the very beginning, IT was used to support existing business processes and help them be more efficient and reduce expenses. It was used to keep track of stuff—people, things, and money. This is what I call the lead paradigm. IT was seen as a support to organizations’ primary internal functions.
Now, many organizations are discovering the gold paradigm. Rather than seeing IT only as support for existing functions, they see IT as the technology that can enable revolutionary processes—processes that generate revenue, rather than just consume it, and create innovation, helping organizations remain relevant and competitive.
If you would like your organization to move from viewing IT in the context of the lead paradigm to embracing the gold paradigm, you don’t need alchemy. You need to encourage your organization to support four ideas: agile innovation, big data analytics, new business models, and technology.
Agile innovation focuses on innovation based on the ideas found in the Agile Manifesto. Collaborating with customers and responding to change are foundational concepts.
For many organizations, innovation was so foreign that they created special groups to do it, and to keep it away from the masses. Today, we know that innovation can and should come from everyone in the organization. Innovation can manifest as continuous incremental improvement; it can also have its basis in a revolutionary view of paradigms.
Big data analytics has its foundation in the huge amounts of data that organizations create and collect. It consists of examining these large and varied data sets to look for patterns and relationships that were previously unknown.
Understanding these patterns and relationships help organizations make better-informed business decisions through predictive models coupled with what-if analysis. These decisions can be in the areas of more effective marketing, improved service, creation of new products and services, variable pricing and inventory levels, and more.
New business models include approaches to connect consumers with suppliers in ways never before imagined. Today, a thriving model is an “xxx-ing company with no xxx”—lodging companies without properties, transportation companies without vehicles, education companies without teachers, home maintenance services without staff, and booksellers without books. This model is very different from the “brick, mortar, staff, inventory” model of the past.
Technology includes mobile, cloud, artificial intelligence, APIs, microservices, the internet of things, and all the other new stuff we are (or should be) familiar with. Technology by itself does not create innovation or new business models. However, technology is the basis, the building blocks, on which the digital transformation is constructed.
It is vital that new technology be understood and welcomed into your organization. The old technology was good enough for the old way, but not for the revolution.
If your company seems content to keep doing things the same old way because that’s the way they’ve always been done, your IT will remain stuck in the Lead Age. With a willingness to explore new ideas and ways of doing business and to learn the technical processes to support a new direction, you can help bring your organization into a golden era.
