One way to fix 10 common headaches of digital transformation
How Business Design and Architecture can play key roles in closing the change value gap
Companies are now under intense pressure to review what they do and how they operate, which for many includes big technology shifts, including, better use of digital channels, automation and cloud technologies.
But, there’s a problem. It seems as though many digital change and transformations have been more than underwhelming when it comes to value realisation. Probably not a surprising point for many of us who work with organisations, helping them adapt to shifting customer expectations and market conditions. Look at the stats…
- 73% of enterprises failed to provide any business value whatsoever from their digital change and transformation efforts, according to an Everest Group report;
- Accenture have found that, out of 1,350 global players, 78% struggled to see results;
- KPMG have reported that one in three CEOs (34%) say their organizations have failed to achieve the value they anticipated from previous transformation initiatives.
Why are so many transformations failing to deliver real return?
Change is a complex thing, particularly for organisations that are in themselves complex, with inflexible legacy systems, manual processes and ways of working, all getting in the way. There are lots of issues to contend with — but three big hairy problems, probably worth highlighting:
1. A desire to ‘get on with it’and make change happen can be great to encourage momentum, but it also can result in programmatic leaps, particularly between initial strategic intent and end solution development, resulting in key design and planning work, to define the exact problem and business needs, being missed out or squeezed. The result? Solutions being built, that don’t work and don’t answer the right problem.
2. A monolithic ‘all or nothing’ approach is adopted, with delivery plans failing to release business value incrementally, resulting in inefficient resourcing, cumbersome work packages and poor ROI;
3. The underlying culture and ‘ways of working’ are poorly aligned to the job in hand, such as lack of engagement from leadership; a delivery team that wants to be ‘agile’, but isn’t; limited capability to adapt to evolving business needs; misalignments in objectives and priorities across business line; all ultimately creating a drag on engagement and value release across the organisation.
Of course, these are pretty knotty problems, and there’s no single fix, but having seen many of these challenges myself and discussed key issues with clients and other consultants in the field, there is one common link that gets a common mention. That link is the gap in how business strategy is defined and applied through the deployment of the programme and new technology solutions.
This doesn’t actually sound that straightforward a problem to resolve, but it is a problem where a combination of good Business Design and Business Architecture can be a big help.
A key missing link — Business Design and Architecture
How do I come to that conclusion? Well, let’s first of all understand what Business Design and Business Architecture actually are.
The role of Business Designer (BD) was originally established by the design agency, IDEO, who describe the role as the job of applying “a human-centred approach to innovation and applying the principles and practices of design to help organizations create new value and new forms of competitive advantage”.
Business Architecture (BA) is an integral part of Enterprise Architecture and according to TOGAF (Open Group Architecture Framework) “defines the business strategy, governance, organization, and key business processes”.
Whilst BD tends to focus on innovation, business and product modelling within a service design agency setting, and BA tends to be integrated into a CIO strategy or Enterprise Architecture function, both disciplines, at their core, work to similar goals. They both aim to understand and describe strategy, capability, stakeholder motivations (which includes customers), plus aid the design of new approaches and innovations.
With a primary focus back into the business, but capable of being a key strategic link into technology, combined disciplines are perfectly placed to ensure that digital change and transformation activities don’t simply become technology led activities, but remain strategically focused on delivering against a business outcome-based set of requirements.
In doing so, they can help close the gap in value realisation which clearly exists in many programmes today.
10 ways in which Business Design and Architecture can help
1. By defining clear and compelling vision and strategy for change. Although a vision and set of strategies exist within most programmes, they are not always clearly translated into value for customers and stakeholders. The process of vision definition is something that Business Designers can help deliver through stakeholder co-creation and strategic assessment of the business, its value proposition, operating model and market.
2. Double-checking that your change is feasible. This means establishing a solid understanding of what needs to change, how it will be done, and associated value return ahead of any detailed design. If gaps between vision, objectives and solutions are only exposed later on, it can be much harder to change course. Because both BD and BA are focused on defining the key building blocks to change upfront, this risk can be mitigated.
3. Making sure everyone’s role is understood, BAs, in particular, are able to develop a focused view on what changes are needed in organisational capabilities, services and functions, so that there is a clear view of how each part of the organisation will contribute to overall realisation of change.
4. Aligning financial forecasting and change planning. I’ve seen many instances where businesses and change programmes become derailed either through underestimation of effort, overestimation of benefit or misalignment between traditional budgeting processes versus agile (incremental) delivery. Both BD and BA approaches help businesses establish value driven plans which are more likely to realise value in line with business expectations.
5. Following the thread from strategy to solution. Continuous alignment of strategy with solution roadmap is key to ensuring longer programmes of work remain true to meeting business goals. It’s also crucial that the course of action can be re-set, in response to changing conditions. In their ‘bridging’ role, BDs and BAs can be key to maintaining alignment across various stakeholder groups (e.g. technology, PMO, operation and business).
6. Delivering business transformation not digital transformation. Because the BD and BA view is customer and business centric rather than technology centric, the design processes and governance approach used, ensures solution design focuses on realising business value drivers not what the latest shiny tech promises.
7. Doing systems thinking not siloed thinking. Simply taking an ‘analogue’ process or function and making it ‘digital’ may not be a sound approach. Organisations are systems and change in one place of an enterprise can impact adversely elsewhere. Equally it may be better to simply maintain ‘analogue’ processes if value return from converting to automation is poor. Applying a ‘systems thinking’ approach is something BDs and BAs do, helping ensure joined up business functions, experiences for customers and clear value return.
8. Bringing innovation into change. Introducing a new automated process to reduce operating cost may be a great idea — but if that automation doesn’t deliver a better experience for customers it may not deliver the full value desired. Taking a user centred design approach, that comes with BD, will help test the quality of solution, drive innovation and ensure change delivers maximum value return to all key stakeholders.
9. Making roadmaps, value led. It’s vital that all key value drivers are well defined and aligned to delivery increments. Understanding, maintaining and adapting a view across the programme of the key motivations, value streams, tactics and associated deliverables (whether defined through epics, features and stories) are key competencies within BA — and will go some way to ensure that business expectations and technology delivery remain on track.
10. Staying true to core goals — getting rid of ‘pet projects’ and distractions.It is vital that everyone understands and remains engaged in the reasons for change and how it is to be implemented. If priorities are not well set and continually maintained, there can be a proliferation of demands, priorities become confused, and ‘pet projects’ get spun up that might meet an assumed need, but don’t contribute to the primary goals of change activity. Good BA and BD planning can help minimise this risk.
OK, lots of significant opportunities, but let’s be honest, just by dropping a dose of Business Design and Business Architecture capability into your change and transformation work, is no guarantee of a fix. However, with so many change and transformations failing to deliver real value, often because of disconnects between business and tech domains, it seems sensible to me to have strong Business Design and Architecture support, as part of your change armoury. That’s if you want to avoid more big value gaps in your CX and digital transformation work.