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Do you think that digital transformation is such a fundamental shift in the way of doing business that many companies will simply not be able to make the shift?
Max Young Accepted Answer Pending Moderation
Blog Writer
The number of companies will be the same. But opportunities will be missed. Companies that could have become Netflix will instead become blockbusters.
References
  1. http://Www.capbpm.com
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Dr Alexander Samarin Accepted Answer Pending Moderation
I think, we are moving to core-business-only companies. In other words, any company will contain only its core business and it will have all supporting functions via B2B partnership with companies for which that a supporting function is the core business.

Thus, it will be not necessary to transform digitally all none-core-business functions.

Please note, the focus is on functions not departments because some functions may be considered very important at the digital age and they may be moved from non-core-business departments to core-business departments.

Thanks,
AS
Comment

OK, core-business-only is really just conscious out-sourcing, agree? Clearly, the more you outsource, the less you have to submit to any massive digital transformation within your organization.

Except that the folks doing the work you outsourced may themselves have to transform so they can liaise seamlessly with your core apps.

Example, I can, in medicine, outsource e-prescription filling but given that in sharing, I cannot escape being the sourcing organization for the the data as per GDPR 2016/279, I need to insist that the e-prescribing outsourced app is also compliant with GDPR.
  1. Karl Walter Keirstead
  2. 4 months ago
"conscious out-sourcing" - Yes. It may be considered as extreme collaboration in which the most qualified do the job via in-coursing or out-sourcing or servicing.
  1. Dr Alexander Samarin
  2. 4 months ago
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Jose Camacho Accepted Answer Pending Moderation
Unfortunately, the answer is yes. Many companies are "investing"/ spending money in a strictly IT perspective, without the required business transformation, I mean, they are automating the processes they have without any improvements, convinced that this is one required phase as basis for the business improvements in the future. Again the provisional will become definitive. So, depending on competition, that it will feel more in some sectors than in other, those companies can or not escape from the bankruptcy. The point is that analyzing the history of big transformations at the society, this one will be for sure the one with the biggest impact, with consequences that nobody can preview at this moment. Probably, the world will change more in the next 20, 30 years, that changed in the last one or two centuries. A minority is going to take advantages for sure, the remain question is how the overwhelming majority of people will adapt, and with what social consequences.
Anyway, as I am an optimist, I think that in the end all will be beneficiaries, some much more then others, but that's the history of humanity.
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Ian Gotts Accepted Answer Pending Moderation
A significant number of companies cannot perform non-digitally. Digitally is even harder; thinner margins, distributed workforce, pace
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Bogdan Nafornita Accepted Answer Pending Moderation
The degree of helpful digitalisation for each industry is different. And the pace is different, too.

And in any industry, with any transformation wave, there will always be laggards and left-outs. Nothing unfortunate about it - they may even carve out their own profitable / stable analogue niche (see resurgence of vinyl, the trend towards local, small batch, food sourcing etc).
CEO, Co-founder, profluo.com
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Scott Francis Accepted Answer Pending Moderation
Blog Writer
Many companies will cease to exist for many reasons - including the "not transforming" reason. Take the digital out of the equation for a moment and just consider it yet another way that "the business environment changes" - and whenever a tidal wave of change happens there are winners and losers and companies that are survivors, but didn't really win.

scott
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The Scotts are in agreement on this one.
  1. E Scott Menter
  2. 4 months ago
I prefer the Irish. Oh wait...
  1. Emiel Kelly
  2. 4 months ago
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Neil Ward-Dutton Accepted Answer Pending Moderation
Given the still huge amount of diversity we appear to have in what people understand by "digital transformation", the beauty of this question is that it allows us all to answer in different ways and all be right :-)
References
  1. https://twitter.com/neilwd/status/990985687905300480
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Karl Walter Keirstead Accepted Answer Pending Moderation
Agree that many will not be able to transform digitally.


  • IT can handle "how" but the business itself needs to define operational protocols for digital. Mapping of existing manual protocols/rolling these out as templates will not work.

  • Management cannot go to IT and say "tell us how we should run our ops".

    And, the business leaders don't know how they should / could change their protocols within the constraints of tools available in the marketplace.

    The situation is complicated by vendor statements like extreme representations such as "easy" which are either uninformed "beliefs" or misstatements.



The curious thing is some industries "went digital" a long time ago and had, and continue to have, success.

e.g. Construction industry and Critical Path Method (CPM)

Flowgraphs are core to CPM, tasks need different skill performance designations, they take time, they cost money, quality checks are needed.

There is no gap between management and operations - everyone is on-board with the singular end objective of completing the project within time, within budget and meeting specifications.

We know why it is different/more difficult in the area of BPM i.e. not all tasks need to be performed, sequences of tasks are not always performed in sequence, ad hoc tasks need to be inserted.

Seems to me a platform that is able to address the dynamics of business process management AND is able to communicate with external/ other internal apps is key to digitilization. The interoperabilty capability is all important -- it lets the organization put in place an operational command and control capability that gives orchestration in the context of resource allocation/leveling/balancing with task data recording and export to legacy systems. Some of the data needed at tasks needs to flow from legacy systems into the platform.
Comment
Right now, there seems to be an urgent need for corporations who have gone digital to re-engineer IFpart of their business activity includes hosting data relating to natural persons residing in or citizens of the EU.

I maintain that many of these do not have infrastructure that is compliant with EU 2017/279/280/281

See my LinkedIn article

https://www.linkedin.com/pulse/how-eus-gdpr-general-data-protection-regulation-your-karl-walter/

The article highlights the difficulty of becoming compliant with the EU Regulation/Directives and the initiative is that they checklist their infrastructure against the three recommendations and take appropriate action.

  1. Karl Walter Keirstead
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Jim Sinur Accepted Answer Pending Moderation
Blog Writer
This is a bit of a trick question. Should the goal really be transforming a complete organization to digital? I think in rare cases, this complete transformation goal should be the real goal. Most organizations I talk to want to leverage digital incrementally, gathering benefits along the way, to be better for customers, employees, communities and stockholders. I think turn key transformation is reengineering in sheep's clothing. We all know what happened to that movement.
References
  1. https://jimsinur.blogspot.com/2015/04/can-you-order-transformations-over-easy.html
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Boris Zinchenko Accepted Answer Pending Moderation
The progress of digital technologies is so rapid, so many new promising products appear every day that it creates a false illusion of infinite opportunities to transform an organization. No matter what bright options were missed yesterday, tomorrow will bring even more and better alternatives. This might be a classical argument of a manager who postpones digital transformation.

However, this impression of abundance and availability is dangerously elusive. As a rule, the number of technologies, which ideally satisfy requirements of a company, is very limited, if not void at all. The search for the right technology is tedious, requires significant effort and expertise, implementation is complex and error prone.

Small quantitative changes tend to gradually accumulate into principal qualitative shifts. If a company fails responding to small day-to-day challenges in digital transformation carefully watched and followed by competitors, it will definitely face one day an abyss, which is impossible to cross with one time action or investment. In many situations such untimely discovery may mean a catastrophic breakdown of the whole business.

To avoid a destructive digital revolution organization must constantly follow modern technology trends to turn them into digital evolution, which will gradually and persistently align business practice with reality of digitization and automation, bring unique digital identity and competitive edge.
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Emiel Kelly Accepted Answer Pending Moderation
Companies don't transform digitally, they transform to digital. To digital gadgets, to digital products or services, to digital processes, to digital employees.

Isn't that the same as adapting to keep on satisfying needs that keep your company relevant? Digital whatever is just a means for that. I still buy my meat at a butcher with no website and no app. He doesn't sell digital meat. What a shame!

(Yeah I know he will be disrupted soon by a startup that allows you to print your own steak, made from pulverized flies you scratched of your car windshield)
Sharing my adventures in Process World via Procesje.nl
Comment
"Digital whatever is just a means " Agree.
Digital is one of system-forming factor for an organisation as a system
- digital laws are the same for everyone
- digital transactions are not corruptible
- digital processes are executed exact and timely
  1. Dr Alexander Samarin
  2. 4 months ago
@Alexander, concerning digital transactions not corruptible etc., there will still be uncertainty, yes? Based on many possible sources, including quality of data etc.?
  1. John Morris
  2. 4 months ago
@John, sure, all inputs, governance, resources, outputs must be perfect.
  1. Dr Alexander Samarin
  2. 4 months ago
@Alexander

Do you have any guidelines for "digital transactions are not corruptible"? Suppose I am sending a prescription to a pharmacy where the dose is 10 mcg and someone intercepts the transaction en route and replaces "mcg" with "mg". Clearly the character count has changed in this example but we could invent another dangerous edit where the character count does not change.

It follows that simple mechanisms do not work.

For the case in point, rules at the pharmacy might detect that 10 mg is out of the normal range for the drug requisition but with lithium, different patients have narrow therapeutic thresholds so, here, we need finer controls.

If the prescription is a repeat, it's a lot easier but what if this is a prescription for a new patient?

Worrisome . . . .
  1. Karl Walter Keirstead
  2. 4 months ago
@Karl

I am writing now about this. Just one line from that unfinished doc. Obviously, this is a case for a digital archive like blockchain.
• Level 1 – sharing facts (e.g. by a common storage for all the audit trails, data structures, documents, goals, KPIs, etc., i.e. inputs & outputs between organizations)
  1. Dr Alexander Samarin
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John Morris Accepted Answer Pending Moderation
Whether in Bible ( "a broad way to destruction" ), poetry ( "the road less travelled" ) or literature ( "unhappy families are unhappy each in their own way" ) tradition has captured the risk of failure at points of decision. This theme is also developed in management writing, most popularly by Clayton Christensen (esp. "Innovator's Solution" ) and Geoffrey Moore ( "Zone to Win" ). One could say that the common thread is a criticism of the view that it's OK to coast on existing momentum, especially as rules of the game change. New rules cannot be learned over night. And the rules of the game for any given niche are usually very specific. As they say "hope is not a strategy".

But certainly, there is hope for readers of BPM.com. Comments by forum contributors above could every one of them be framed for inspirational executive suite art, and are worth review by any manager.

So what is the business impact of digitalization? And from the original question, is there a significant proportion of the population of enterprises that, for whatever reason, won't follow a path to transformational success?

Beyond mere improvements in efficiency, digitalization means especially the ongoing "normalization" of business functions. (Readers will be familiar with database normalization whereby all redundancy is removed. Enteprise Architecture guru John Zachman has also applied the idea of normalization to enterprise.) The economic impetus for enterprise normalization was defined originally by economist Ronald Coase, concerning the relative costs between in-house management and outsourcing transaction costs. Why mention transaction costs and normalization in this discussion? Because it this through this evolving trade-off that digitalization drives business change and the need for transformation. The costs of organizational disaggregation are constantly dropping as digital technology develops (the so-called "API economy" is a good example of this.) It's not for nothing that the Ronald Coase is very popular among BPO outsourcing provider leadership.

Digitalization means that business structural change is inevitable, probably along the lines of disaggregation for every more granular services. (The opposite, massive consolidation is another possibility; normalization of enterprise can also support aggregation and monopoly, if economies of scale and barriers to entry are present.) Big consulting has made quite a good living for the past few years predicting the direction of these changes. But for any individual enterprise, guiding that enterprise successfully though constant change is hard, because the organization's path is underdetermined. That is to say there are many degrees of freedom -- freedom to fail, if you will. The "way is broad" to failure. Management must give constant attention every day to feedback on what's working and what's not. And even then that's not enough, because without a direction, mere "adaptation" can become a random walk (to oblivion). Management must also envision and model successful end-states. Strong, smart, even lucky leadership is the only way to find the narrow path.

Can anyone quantify the percentage of enterprises that won't transition successfully to digital (a proxy would be to estimate the percentage of organizations not led by strong, smart, lucky leaders)? Business change will evolve differently by sector, due to economies of scale and barriers to entry. And there are certainly many more ways to fail than there are to succeed. Whether one is inspired by literature, tradition, systems theory, personal vision or hard-won experience, your leadership is required.
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We are transforming our organisations to better systems and digital is one of enabler for this (see my comment to Emiel); another enabler is architecture.
  1. Dr Alexander Samarin
  2. 4 months ago
Can we imagine then a chain: digitalization -> architecture -> new organizational state? where "->" means" enables, i.e. make possible, but no guarantees. Thus leadership . . .
  1. John Morris
  2. 4 months ago
Actually, it should be the following chain: architecture -> digitisation of artefacts and relationships between them -> more systemic organisation. To achieve some level of "guarantee" it is necessary to apply "Software-Defined Organisation" techniques (this is the third enabler).
  1. Dr Alexander Samarin
  2. 4 months ago
I agree with Alexander - it has to start with architecture and when we get to "more systemic organization", perhaps with a meaning "state of improved competitive advantage", it is important to try to avoid loopbacks as it may be too expensive to not get things right the first time around within any "technological lifecycle". i.e. automakers can continue to fine tune cars that rely on internal combustion but only up to where most cars are electric.
  1. Karl Walter Keirstead
  2. 4 months ago
First of all, I agree with @Alexander that "it" (meaning "business transformation") should start with architecture! But the "should start" is also POV specific.

Consider the possibility of three different starts for business transformation:

1) Start with architecture -- appropriate for executives with responsibility for organization design, typically in a dynamic industry. Could be the COO plus CIO.

2) Start with business need -- architecture is an expense for infrastructure. There is never a budget, in the traditional operational sense, for infrastructure. Architectural infrastructural investment has to be driven by the Board and the CEO -- so from this perspective, business need is prior to architecture.

3) Start with digitalization -- this is where I suggested we start, and it's the POV of the external omniscient observer (i.e. Gartner or the stock market). Digitalization is the advent of new technology out of the labs and into the streets. Digitalization technology enables or makes possible new architectural forms. And economics and markets force participants to evolve, whether they like it or not.

This digitalization as "external trigger" approach could be compared to a similar process around product design. There's a lot of hype around better product design. But new product design is substantially enabled because of advances in materials sciences (and manufacturing techniques, which are themselves at least partially dependent on materials science). For example, the arrival of plastics made it possible for an amazing array of new products to be designed and manufactured. New materials coming out of labs enable new design possibilities.

Let's make an argument that architecture and digitalization are orthogonal to each other. It's completely possible to pursue better organizational architecture without digitalization. Indeed, Alfred Sloan of General Motors is famous for doing exactly that, setting up the GM business architecture in the 20's and 30's, prior to digitalization (even if Sloan didn't call it architecture).

I suggest however, that most (or even all) organizational architecture work today is triggered by and enabled by digitalization. Digitalization makes possible new business architectures. And economics and market discipline push executive leadership to fund new architectural programmes. (At this point we run into the long-running question of the "selling of the idea of enterprise architecture".)
  1. John Morris
  2. 4 months ago
@John, "But the "should start" is also POV specific. " - yes, after making the right order for architecture, digitalisaiton and new "state of improved competitive advantage" , we may go upstream. Please have a look at the chapter 3 in http://improving-bpm-systems.blogspot.com/2017/07/better-architecting-with-systems.html The first viewpoint to be created is called "VALUE".

"this digitalization as "external trigger" " - at the same time, digitalisation is still only one of the means to improve business.

"organizational architecture work today is triggered by and enabled by digitalization" - yes, we have to stop architecture as a paperwork only.
  1. Dr Alexander Samarin
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Kay Winkler Accepted Answer Pending Moderation
Many companies won't have to transform digitally. At least not in a short term, but rather as a result of many, iterative improvements over a longer period of time. In that sense, there for sure is a universal need for all companies to adapt and modernize, but I believe that it's a misconception that all or even most of the companies HAVE to forgo a drastic and short term overhaul of their very essence and with it, of every thing they do.
By the very nature of most (relatively) free-market economies, there likely will be always a common distribution of a few innovators and game changers, a broad proportion of businesses, aligning to the new standards to varying degrees and an also small number of companies that will fall behind the "curve". In order for the game changers (in this case, the digital transformers :)) to actually gain the required traction and forward propelling force from an outside perspective, they do require a sound base of followers that wont necessarily "transform" but gradually adapt to new standards.
In addition to that, if a company suddenly identifies the need to completely transform itself (digitally or otherwise) in order to compete and survive, it may have missed several critical yet gradual improvements over the years and may find itself in a rather peculiar situation - excluding here, the few visionary outliers mentioned before. While there maybe a couple of "Netflix" situations (also, to varying degrees) for all of us over the decades, it's simply not true that we ALL are or even have to be a "Netflix", ALL the time. Hence, digital transformations, as synonym for drastically and technologically altering the company's DNA, should be reserved to these very well weighted, evaluated and thoroughly planned moments during a business' life cycle, in my opinion.
NSI Soluciones - ABPMP PTY
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David Chassels Accepted Answer Pending Moderation
After 50 years of IT driven command and control systems which really do not reflect the real world of work and fail in flexibility yes there is an opportunity to see transformation BUT most business executives are very cautious even cynical of "IT" projects with historical very high failure rates. This is not helped by the industry analysts who fail to both encourage different approaches and do deep research on capabilities. In addition "Digital" has been so over hyped with differing focuses on what it is that caution has been understandable.The good news is there are signs change is coming; this forum being a leader in articulation of what is happening.


Digital Transformation in business by inference requires that "outside-in" and BPM approach where data is created and presented in UIs. To be effective it must have that vital real time "back office" support to handle all eventualities and of course the inevitable change. The real "transformation" opportunity comes with the empowerment of users both internal and external which will make significant contribution to both efficiency for the organisation and better user experiences. The rewards will be significant for many BUT some may not welcome such as old IT and middle managers? However such transformation really does need to happen BUT quite "how" is the mystery holding up progress. So many organisation do the "talk" which makes for good PR BUT in reality the focus is very restricted to the UI and "user needs" which in itself will not be transformational without the effective use and distribution of data with real time data feed and reports as required. This latter point actually very important to safely embark upon empowerment and move away from command and control.


I am optimistic for the future as I see many new challengers emerging who are certainly articulating the right message. BUT deep research on exactly "how" really does need to be undertaken not just believing the marketing BS and hype...…It is all a question of "time" and all the signs are change is coming......BUT my "BUTs" need to be addressed!
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Without taking responsibility for the "how" of digital, it's just magical thinking.
  1. John Morris
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