Capabilities for the Digital age
Move toward Digital business models, services and processes has existed since the beginning of computing, yet the speed of change is only accelerating. This has resulted that on the one hand, organizations that have adapted digital as means to stay ahead enjoy significant advantages from increased productivity to higher IT spending ROI. On the other hand organizations that fail to adapt will struggle to keep pace. ”Wait and see” is no longer be a viable option, nor is a siloed organization and operating model delivering results.
There are two underlying reasons that contribute to the divide between digital winners and laggards:
1. Digital transformation is driven by business and customer strategy, not by technology.
2. In the past, digital efforts focused more on operations than on customer and product; now changes to all three are often in parallel.
Leveraging Digital technologies today requires that CIOs and Business Leaders understand where their strengths are, and where their capability gaps are. Using this information the organization may develop remedial plans to uplift the organisation and better look for technology trends that tie into the business objectives.
Capability perspective to succeeding with Digital
Barriers to digital adaption and transformation are widely discussed particularly from a strategic perspective. Yet structured ways to align the organizational current and target Digital maturity to its structure, behaviors, practises and respective KPIs are few. Here is where the Capability perspective comes in, essentially approaching Digital value creation from the perspectives of critical Digital management behaviors and supporting capabilities:
1. Planning: Digital Strategy and direction of actions regarding how digital can assist the organization to compete and thrive, and the rationale for investments. Internal and external coherence of how Digital is promoted through ecosystem and the value chain.
2. Making: Digital Services and Products design and development. Digital enablement and streamlining of the delivery with digital – for example with data analytics, ML/AI, cloud, mobile etc.
3. Selling: Digital Customer Engagement and sales strategy. This includes the necessary customer service model.
4. Operating: A coherent view on Digital technologies impact to operations efficiency & effectiveness, architecture, processes, automation, and security. Operations also cover the cross-unit collaboration, organization, roles, responsibilities, and talent management going forward.
The capability perspective posits little value to digital strategy or planning itself, yet it finds it a requirement together with the the development, delivery, and operations. Sustainable, scalable improvements to Business and IT performance are driven by improvements across all four critical Digital management behaviors, hereby making capability maturity improvements a critical component of any Digital transformation.
Melkki has extensive experience in helping clients move toward optimized Digital Operating models. Our approach to capability building is to identify and build a roadmap for improvements utilizing Innovation Value Institute´s leading body of knowledge: IT-Capability Maturity Framework (IT-CMF), Digital Readiness, and Capability Improvement Programming.
More on Innovation Value Institute Digital Readiness: https://ivi.ie/digital-readiness/
Melkki Operating Model Advisory is focused on helping IT and Business executives to re-organize and optimize the operating model in order to create more value from IT and to deliver IT enabled innovation. For further information, please contact Johanna Suortti via LinkedIn or email johanna.suortti(at)melkki.fi.