The Seven Core Principles of Digital Transformation

Digital Transformation

Digital Transformation has become a hot buzzword recently, being adopted by Microsoft as the overarching theme for their cloud based business apps and the subject of many studies from McKinsey and company, Gartner and other research firms.

I wanted to share some of our approach and lessons learned working with companies in different industries such as Insurance and Manufacturing on their digital transformation initiatives.

A transformation does not happen overnight. It is a long and sometimes painful process that to be honest, never really ends. The rate of innovation and change is increasing and new business and customer needs will constantly emerge.

Therefore, our approach is very much grounded in the concepts of agility. The right foundation built with change in mind. In such an approach, it is not always beneficial to try and document every future requirement to see how to accommodate it but to have a very strong foundation and an agile, open framework that can be easily adapted.

A good way to judge your current agility level is to perform a Digital Agility Gap test. For small, medium size and large changes business has requested in the last year, what is the gap between when the business would like to see the change made to when your organization was able to deploy? The larger the gap, the more acute the need is for a comprehensive digital transformation.

agility-gap

The following 7 core principles should drive every digital transformation initiative, large or small:

  • Business Driven. This may sound obvious but all digital initiatives need to have a business reasoning and business sponsor. Technology can be a game changer but very often, the digital channel needs to be part of an omni-channel approach. eCommerce can augment retails stores or distribution channels but will not replace them for a long while. Digital must be part of the overall business and market strategy. The new role of Chief Digital Officer is a great example for how organizations integrate the digital as a business channel with broad responsibilities and a chair at the executive table. The Digital aspect needs to be part of every major organizational strategy, not a separate one. For example: you are launching a new product, how will you design it, support the manufacturing/supply chain, market, sale and support the product using Digital means?
  • Data is King. Having enterprise information available in digital format with a single source for the truth is the absolute foundation of a digital transformation. Without “Good data” the effect of garbage in, garbage out will produce inconsistent results and systems people can’t trust. This is usually the hardest part for many companies as organizational data may be residing in many legacy systems and too intimately tied to old business applications. It also is hard work. Hard to understand and hard to put a direct ROI on. It is not glamorous and will not be visible to most people. In lieu of complete data re-architecture, most organizations start with master data management and data warehouse / operational datamarts to get around the limitations of the various systems where data is actually stored. The imperative is to know what the single source of the truth is and abstract the details through data access layer and services. The emerging area of Big Data allows capturing and processing ever larger amounts of data, especially related to customer interactions. Data flows, validation and storage needs to be looked at again with new vision into what and how data is captured, stored, processed and managed.
  • Actionable Analytics. Many organizations invested heavily in Business Intelligence and use decision support systems to run analysis and produce reports. The expanding scope of data capture and processing now allows analytics to serve as actionable triggers for real time decisions and other systems. For example, your website’s ability to make customer specific product recommendation can be a result of real time process that conducts a customer analysis and what similar customers have bought and can execute an RFM analysis to assign a tier to the customer and derive relevant offers. Marketing campaigns can target prospects based on predictive analytics etc. Closed loop analysis is critical for understanding the impact of decisions or campaigns. The ability to see the connection between an offer or search campaign and the revenue it generated is the foundation of future investment decisions.
  • Customer Centricity. One of the main drivers and benefits of the digital transformation is the ability to meet the new world of customer expectations and needs. Customers want access to information and ability to take action and interact anytime, anyplace, from any device. The new Digital Experience maps to the customer lifecycle, journey or buying flow and data is collected at every point of interaction to feed personalization, targeting and marketing. When done correctly, an intelligent user experience will improve engagement, loyalty and conversion. In designing new digital user experience, we usually recommend mapping the user interactions across all touch points and focusing on finding common needs rather than a “Persona” driven approach. Those in our experience are too generic and lead to oversimplification of the model.
  • Agility in Technology and Process. Agility is at the heart of our approach and without it you would go through a transformation every few years. It is broader than just IT and impacts many business and operational processes. Few key concepts of planning for agility:
    • De-coupling. A large part of what makes changes hard, is the intertwined nature of most IT environments. Proprietary databases, older applications without outside interfaces, hard coded database calls in code, heavily customized but dated applications, etc. The solution is to de-couple the elements and create a modular, service oriented architecture. Data should be separated from logic, services, and user interaction allowing each tier to grow and evolve without requiring complete system re-write. For example, the biggest driver of transformation in the last few years has been the user experience and the need to support users in various mobile devices. A de-coupled architecture would allow UX overhaul using the same services and backend.
    • Agile / Rapid application development. Application development needs to be able to create prototypes and test ideas on a regular basis. For that to happen, the process of definition, design, implementation and testing software has to be more responsive to business needs. Whether following Agile Methodology principles or just a more iterative version of traditional models, application development has to be able to quickly show business users what they would get, and adopt a minimal viable product approach to releasing software. An emerging model of continuous delivery allows faster, automated deployment of software when it is ready.
    • Cloud and Infrastructure agility. The emergence of cloud services is making agile environments so much easier to implement. From an infrastructure perspective, you no longer need to invest in hardware resources for your worst-case load scenario. The ability to get just as much computing resources as needed on demand and scale as needed in matter of minutes makes platforms like AWS and Azure very appealing. Many applications now offer only cloud based versions and even the large players like Microsoft and Oracle are now pressuring all customers to get on the cloud versions of their applications. The ability easily to plug a cloud application into the environment is the ideal of agility. With a common security and authentication layer, the modern corporate application landscape is comprised of many different cloud applications being available to each user based on their role and integrated to a degree that makes the user experience as seamless as possible.
    • In addition to the environment, software and infrastructure, organizational processes have to be more flexible too. Change management needs to become a process that enables change, not one the stops it.
  • Process Automation: with the new landscape comprised of so many different and independent application, process automation and leverages the open interfaces of application is becoming critical. Traditional Business Process Management application are now morphing into cloud orchestration and an ability to allow processes to be created across multiple applications and managed / updated by business users without IT involvement.
  • Security. Last but not least, the open, flexible nature of the future landscape we were describing here, requires new levels of security that should be an integral part of all facets of the environment. Data security and encryption. Services security, security in application design, all layers and components have to consider the rising threat of hacking, stealing data and denial of service that are more prevalent than ever. We see this as the primary concern for companies looking to adopt a more digital and agile environment and a large emphasis on risk management, security standards and audits should be a primary component of any digital transformation initiative.
bittercube-products

Lean Manufacturing in Practice – Bittercube

bittercube-productsIn this blog series, I’m showcasing products manufactured in my home state of Wisconsin. In addition to sharing some fun facts about the various companies and their products, I’ll be highlighting the Lean Manufacturing Principles that are best exhibited at each respective organization. These principles are derived from the Japanese manufacturing industry and center on making obvious what adds value while reducing waste muda. The six Lean Manufacturing Principles are: 1) Workplace safety, order, and cleanliness 2) Just in Time (JIT) production 3) Six Sigma quality 4) Empowered Teams 5) Visual Management 6) Pursuit of Perfection.

A cocktail renaissance has swept across the country, inspiring a new fascination with the ingredients, techniques, and traditions that make the American cocktail so special. The use of bitters, liquor that is flavored with the pungent taste of plant extracts, has been gaining popularity over the past decade. Originally developed for medicinal and digestive purposes, bitters now serve mainly as cocktail flavorings. The alcohol functions as a solvent for botanical extracts as well as a preservative.

Milwaukee has contributed to this cocktail renaissance with the help of Bittercube. Founded by Nicholas Kosevich and Ira Koplowitz in 2009, Bittercube handcrafts eight varieties of artisanal bitters, using only naturally sourced ingredients. By happenstance, the operations are run from the location that Foamation once occupied. Milwaukee was perceived as an untapped market with room to grow. Also, the low cost of operating expenses allow for maximum revenue generation.

Henry Ford created the first all-inclusive manufacturing strategy. However, it was Eiji Toyoda, a Japanese engineer, who after analyzing Ford’s methods, improved upon them by keeping an eye out for waste. Waste (or muda in Japanese) refers to any kind of wasted motion, effort or materials in the manufacturing process. Toyoda popularized the concept of Reducing Waste, which has become a basic tenet of Lean Manufacturing and falls under the principle of Pursuit of Perfection.

The objective of Lean is that every step must add value and be waste-free. A non-value added, or wasteful activity is one that neither adds value to the customer nor provides a competitive advantage to the organization.  Some non-value added activities include waiting and inappropriate processing. Waste can also take a tangible form, such as idle raw material or defects. Although transportation is an important aspect of the manufacturing process, it is a non-value added activity, as it adds to cost but not to value. It should be noted that some non-value adding activities like accounting and regulations are important and cannot be avoided.

Lean-manufacturing-bwThe continuous Pursuit of Perfection encompasses the idea that one must always strive to eliminate waste in the organization, while constantly making improvements, even if those improvements are small and incremental.  Improving processes results in reducing or eliminating variation, and improving the process flow or speed. Learning and consistent measures for improvement should be part of all processes if an organization intends on growing.

Bittercube has reduced waste by improving on their processes. In the past, they used a generic, high-density plastic container to process the bitters. There was no way to remove the botanical material after the batch was processed, other than to climb into the container and physically remove it by hand. Although this left the person who cleaned the container smelling of cinnamon, cloves, and vanilla, it wasted time and did not add value to the process. They have since updated to a custom-built processing/cooking tank with a bottom compartment where botanical material can easily be removed and cleaned.

Bittercube previously used generic boxes that weren’t cost efficient to ship. They have since opted for custom-made boxes with dimensions that maximize the number of bottles in each box, thus reducing wasted space and shipping costs.

Lean supports the notion that nothing should be wasted and a use must be found for everything. Bittercube has also reduced tangible/physical waste by reusing and recycling the processed materials. Instead of discarding the used botanicals, Bittercute has begun composting these materials. The finer botanical sediment will be reused in other products, such as an ingredient for Purple Door Ice Cream.

Autumn is upon us! Try this seasonal Maple Old Fashioned recipe!

2 oz. Johnny Drum Private Stock Bourbon, Fat .25oz. Maple Syrup, a dash of Jamaican #2 Bitters, a dash of Bittercube Bolivar Bitters, Garnish: Fat orange peel

To view other recipes and product offerings, visit Bittercube.

To read more about bitters, visit The History of Bitters

For more information on Lean Manufacturing see: Lean Waste Stream by Marc Jensen, Lean Enterprise: A Synergistic Approach to Minimizing Waste by William A. Levinson and Raymond A. Rerick, and Learning to See: Value Stream Mapping to Create Value and Eliminate MUDA by Mike Rother and John Shook

Diagnose Your Inefficiency Potholes

potholesMany employees tend to complain about work-related inefficiencies as much as Wisconsinites bemoan the craters (aka potholes) left in the roads each winter. In response, companies usually acknowledge that making improvements is critical, and do their part in researching Enterprise Resource Planning (ERP) options. But, are all work-related inefficiencies exclusively due to a legacy system? Are people jumping the gun in assuming so, or are they misidentifying a process problem? Could some of these issues disappear by making a few simple process adjustments? Without empowerment and support, all the technology in the world won’t move your business forward.

There is no exact formula to determine if a problem stems from a bad system or a bad process; but asking yourself some basic questions could help you figure out where the problem lies. For example:

  • Would implementing new process improvements really resolve the problem?
  • Could implementing new system functionality resolve the problem and also provide a competitive edge?
  • Do the system benefits outweigh process benefits?

The following steps should aid you in your diagnosis and decision-making:

Create a problem Inventory 

Interview Subject Matter Experts (SME’s) from the various departments affected to develop a problem inventory list.

Identify process-related problems

Identify all process-related issues from your inventory list. Ask yourself: What is the root cause of the problem? Is there a lack of communication, lack of enforcement, or lack of an actual process? If you answered yes to any of these questions, the problem likely stems from a process issue.

Examples of process-related problems include:

  • A customer is upset that they’re getting bounced around
  • Sales Agents aren’t required to track or manage lead information
  • No official process for returns exists. (If an actual documented process cannot be provided, there probably isn’t one.)

These items may also range in severity. While going through this process, consider assigning priority levels or at least identify quick fixes.

Make process improvements where possible

This step is important because it improves overall business processes and productivity by making identified improvements. It also validates problems that can be resolved realistically. This step may take a few weeks to a few months to transpire, but it provides important insight and brings the process to the next step.

Focus on system-related problems

Once process-related problems are identified and resolved, one is able to ascertain that the remaining problems are system-related and decide if a new ERP system would be advantageous.

Examples of system-related problems include:

  • No visibility to inventory availability
  • Multiple customer masters, item masters, and vendor masters
  • Manipulation applied to reports (current system lacks reporting functionality)

This step will not completely resolve a company’s problems and inefficiencies, nor will it guarantee employee satisfaction. It will, however, allow for a more focused approach when considering solutions. It also provides the added benefit of some inexpensive process improvements along the way.

Wise up! Grow up!

OK. I am more than a little weird. I find valuable change management lessons from varied sources like the animal kingdom, daredevil cyclists, the great American roadtrip, and I hang out with people who think in similar bizarre ways.

Because my household now includes a boomerang young adult in residence while in grad school after years of independence, the lesson du jour is this:

Sometimes it’s not just tasks or individual behaviors that need to change (because you can’t even list them all).

You need to change the fundamental relationship, and everything else flows from there.

It’s the same for IT, the enterprise apps, and the end user community:

Behaviorwise, it’s:

Out with the OLD!

old IT

  • Ask IT to run a query
  • Wait for an overnight report to print
  • Ask sales to ask their key customers for feedback
  • Monthly buyers’ meeting to review supplier performance
  • I’ll review it Monday when I am back in the office

 

In with the NEW!

new IT

  • Do it yourself drilldown
  • View it graphically onscreen NOW
  • Analyze social media sentiment directly
  • Real time supplier scorecards
  • I can check the stats while I wait for lunch

 

 

The IT/End User Relationship needs to GROW UP from this:

spoon feeder

 

 

 

 

 

To this:

adults

 

 

 

 

 

IT should only provide the essential services (keep  the servers up and running, maintain  the database, keep  the application patched, and administer  security). The End User should engage directly with the application to interact with business information without begging IT for every query or report or view.

These basic skills around information self-service are an important part of getting through the change management curve , and you should begin stressing them even before training users on core transaction processing.

Be a good IT parent: give your end users the life skills they need to grow up.

Does your training plan devote enough time, the right exercises, and tips to help users master  basic skills?

Are you letting people know how the new software will empower them to get the answers they need without begging time from IT?

Are you testing end users for mastery?

If you don’t….don’t say I didn’t warn you….

he will be in your basement FOREVER

basement boy

Don’t say I didn’t warn you!

The Invincible Adolescent Corporation

In my last post, I talked about the importance of being prepared for potential product recall disasters. With recalls so much in the news, I can’t stop thinking about it. Today’s question is:

Who is most at risk for failing to prepare a rapid recall response plan?

Young-entrepreneurIt’s the adolescent companies! They are like teenagers who think an auto accident can never happen to them. You can neither sell them prudence and preparation, nor can you convince them that they are at risk–Because their brand has become the brand of the cool kids (social media savvy hipsters) they believe nothing bad can happen to their company, their product or their relationship with their consumer fanbase.

Take a look at two popular brands that have suffered recalls , and how vastly different the responses have been:

  • Lululemon is now reselling refurbished not so sheer yoga pants at a generous 6% off their original price! Seriously?
  • Earthbound Farms never thought their healthy spinach would actually sicken people, yet it was linked to an E. coli outbreak that sickened 200 people and three people died. Unlike Lululemon’s attempt to minimize their losses by re-imaging their refurbished see through pants, Earthbound made a significant effort to reduce risk.

This type of risk reduction is of course the first and best line of defense.  But  recalls still abound. Of course, there are now recall watching apps available, such as:

but the producers should be responsible from preventing dangerous products from reaching the marketplace.

I don’t know about you, but I am hesitant to resume purchasing after a recall, because so many companies seem to handle them so badly.  It doesn’t have to be this way.

So kids, listen up.  Yes, I mean you, the well loved brands of the cool crowd.

Planning is mandatory. A comprehensive approach needs to include well planned recall incident response, and this plan must be exercised with mock drills periodically.

Are you ready? Take the first step and find out. Take a short self-assessment, and see how you score across the key readiness categories.

The Lake of Unclear Benefits

lake of unclear benefits

Source: harrypotter.wikia.com

So the decision comes down, your company is moving forward with new ERP. Congratulations on your decision; just remember, a year or so from now, that ERP implementations are potentially the next great, bloody spectator sport. They are not for the weak or those lacking determination. Decision made, presumably based upon a business case that documented the expected benefits and how you are going to get there. If so, continue. If not, then you’d probably better back up a bit and get all of your bunnies in a row because, in either case, now you have to communicate why you are doing this project.

So whom do you have to communicate with? How about: anyone who will be impacted by this project. Certainly that includes directly impacted end-users and their supervision and management. It also includes people in other organizations that may not be included in the initial project, this might be HR or some other organizaton. Why communicate with them? Because they will hear about the project and will naturally have questions about it, including why they are being included in the scope of the change, especially if they are unhappy with current systems and processes.

What needs to be communicated at this early stage? Frankly, it does not have to be complicated. It almost always begins with “We are moving to new ERP because…” and then you simply fill in the blank. This is also a good time to develop a good 15-20 second answer. Why? To get the key points across quickly. That said, you absolutely MUST be ready to provide details regarding what specific goals exist, by area/location, and how you expect to get there. Elevator speeches can only go so far – it takes details to calm people who are fearful of change.

We actually get asked frequently, “why do we have to communicate so early about the reasons for our new ERP project?” Our answer is pretty simple: because if you don’t, people will fill in the blank themselves. And you won’t believe what they will come up with, most of it from the depths of fear, distrust, or native suspicion. Here’s what we’ve heard people come up with:

So, why are they doing this to us (again)?

To get the company ready to sell (and all of us are going to lose our jobs)

To increase automation and efficiency (and all of us are going to lose our jobs)

Here we go again, more churn, churn, churn and someone else gets the butter (and we are all going to lose our jobs)

Get the point? If you don’t provide a good answer in advance, people will answer their own questions in the most negative possible way.

Your communication of the reasons or rationale for moving to new ERP is merely the start of a good communication strategy and plan – not the end of it. Oh, yeah, if you don’t have a comprehensive communication strategy and plan, it is most definitely time to get one. And for pity’s sake, if you don’t know how to do this, call someone who does. Everyone who depends on the future ERP system will eventually be grateful.

Lack of concerted communication to end-users about the reasons behind the implementation, the anticipated benefits stemming from successful adoption and the ways in which each individual end-user and executive are impacted will affect project success or failure.

Mitigation Step: Create and follow a comprehensive organizational change management plan – at the very least, get an expert involved to do an assessment of readiness and challenges.

Top 5 Warning Signs you are on the ERP Desert Highway

desert carThere are many wrong turns on the road to the Desert of ERP Disillusionment.  Some teams go wrong right out of the gate. Here are the top five warning signs that your real destination is not the pinnacle of ERP success, but the dry parched sands of the desert.

1. Your steering committee is texting while driving. If your key decision makers are multi-tasking through every steering committee session, its easy for them to miss critical information they need to actually steer.

2. The distraction of backseat squabbling causes the PM to miss a turn.  Political infighting and lack of alignment among key stakeholders can be as difficult to manage as any carful of kids on a family roadtrip AFTER you have taken away their favorite electronic toys.

3. The driver is looking in the rearview mirror instead of the road ahead.  While there are some lessons to be learned from your last ERP implementation (how long ago was that?) , modern state of the art systems require significant behavior changes in the way users interact with information in the system.   If they are used to greenbar reports laid on their desks every morning, the gap may be too big to jump. 

4. You read a guidebook about the wilderness once….  You can’t learn all your survival skills from a book.  In life threatening terrain, there is no substitute for having an experienced guide on the team.  If you haven’t put experienced change leadership into place before you bid your consultants goodbye, you will have neither the insight to recognize the warning signs, nor the skill to lead your people out of the desert.

5. You ran out of gas!  You didn’t fill up at the last station because the ATM was out of cash, your credit card is maxxed out,  and you used your last dollars on Slurpees and Twizzlers for the kids.  If you fritter away your project budget on non-value added-customizations like moving fields on forms and cosmetic report changes, you won’t have money left to address any business critical requirements that come up late in the game.

(Hat tip to Mark Farrell for #5!)

Beware What Lies Beyond the Valley of Despair

If you’ve implemented an ERP system in the last few decades, you have surely seen one of the many representations of the traditional ERP change management curve, with copious advice for avoiding, or reducing the depth of the Valley of Despair. The graph is somewhat misleading, in that it typically ends with a plateau or pinnacle of success, implying that your troubles are over as soon as you go live.

If only that were true.

A more comprehensive graph would look like this:

DESERT OF DIS

Notice the descent into what I will refer to as the Desert of Disillusionment, that awful place where every “productivity improvement” line item in your rosy ROI analysis (the one that you used to justify the project)  is revealed as a mirage.

Why does this happen, and does it have to be this way?  More importantly, what are the warning signs and how should you deal with them?  We will deal with specific topics in future posts, but for now, we invite you to take our short survey on diagnosing enterprise system impact on business productivity.

take the survey

Time to Remodel the Kitchen?

Although determining full and realistic corporate valuation is a task I’ll leave to people of sterner stuff than I (since Facebook went public, not many could begin to speculate on the bigger picture of even small enterprise valuation), I’ve recently been working with a few clients whom have reminded me of why one sometimes needs to remodel.

Nowadays, information technology is often seen as a means to an end. It’s a necessary evil. It’s overhead to your real business. You joined the technological revolution, and your competitors who didn’t, well… sunk. Or… you entered the market with the proper technology in place, and, seatbelt fastened, have taken your place in the market. Good for you. You’ve got this… right?

I’m a software system architect. I envision and build out information technology. I often like to model ideas around analogies to communicate them, because it takes the tech jargon out of it. Now that I’ve painted the picture, let’s think about what’s cooking behind the office doors.

It’s been said that the kitchen is the heart of the home. When it comes to the enterprise (big and small) your company’s production might get done in the shop, but sooner or later, everyone gets fed business processes, which are often cooked in the kitchen of technology. In fact, technology is often so integral to what many companies do nowadays that it’s usually hard to tell where, in your technology stack, business and production processes begin. Indeed, processes all cycle back around, and they almost certainly end with information technology again.

Truly, we’ve come a long way since the ’70s, when implementing any form of “revolutionary” information technology was the basis of a competitive advantage. Nowadays, if you don’t have information technology in the process somewhere, you’re probably only toying with a hobby. It’s not news. Technology graduated from a revolutionary competitive advantage to the realm of commoditized overhead well over a decade ago.

Ok… ok… You have the obligatory kitchen in your home. So what?

If you think of the kitchen in your home as commoditized overhead, you probably are missing out on the even bigger value an update could bring you at appraisal time. Like a home assessment, due diligence as part of corporate valuation will turn up the rusty mouse traps behind the avocado refridgerator and under the porcelain sink:

  • Still rocking 2000 Server with ActiveX?
  • Cold Fusion skills are becoming a specialty, probably not a good talent pool in the area, might be expensive to find resources to maintain those components.
  • Did you say you can spell iSeries? Great, can you administer it?
  • No one’s even touched the SharePoint Team Services server since it was installed by folks from overseas.
  • The community that supported your Open Source components… dried up?
  • Cloud SLAs, Serviceability?
  • Compliance?
  • Disaster Management?
  • Scalability?
  • Security?
  • Documentation…?
    • Don’t even go there.

As you can see… “Everything but the kitchen sink” no longer applies. The kitchen sink is transparently accounted for as well. A well designed information technology infrastructure needs to go beyond hardware and software. It considers redundancy/disaster management, security, operating conditions, such as room to operate and grow, and of course, if there are any undue risks or burdens placed on particular technologies, vendors, or even employees. Full valuation goes further, looking outside the walls to cloud providers and social media outlets. Finally, no inspection would be complete without a look at compliance, of course.

If your information technology does not serve your investors’ needs, your CEO’s needs, your VP of Marketing and Sales’ needs, as well as production’s… but most importantly your customers’, your information technology is detracting from the valuation of your company.

If the work has been done, due diligence will show off the working utility, maintainability, security, scalability, and superior added value of the well-designed enterprise IT infrastructure refresh.

To elaborate on that, a good information technology infrastructure provides a superior customer experience no matter how a customer chooses to interact with your company. Whether it’s at the concierge’s counter, in the drive-through, at a kiosk, on the phone, at your reseller’s office, in a browser or mobile app, your customers should be satisfied with their experience.

Don’t stop with simply tossing dated appliances and replacing them. Really think about how the technologies work together, and how people work with them. This is key… if you take replacement appliances off the shelf and simply plug them in, you are (at best) merely keeping up with your competitors. If you want the full value add, you need to specialize. You need to bend the components to your processes. It’s not just what you’ve got.  It’s how you use it.  It’s the critical difference between overhead and advantage.

Maybe the Augmented Reality Kitchen won’t provide a good return on investment (yet), but… there’s probably a lot that will.

Big Data + Small Process Thinking = Disappointing Results

Big data is in the news this week.  In a recent Forbes article describing the hidden opportunities of big data, Albert Pimentel Chief Sales and Marketing officer at Seagate quoted Mark Dean, an IBM fellow and director of the Almaden Research Center as saying, “Computation is not the hard part anymore.”  As with most big technology transformations, one of the hardest parts is always getting the process and people part right.

Big data has the potential to position businesses to outperform their competitors, as described in a recent McKinsey article that dubs big data the next frontier for innovation, competition, and productivity.  As businesses race to implement big data technology, there are some serious business process transformations that need to take place to fully leverage the investment in any big data initiative.

In the Big Data-driven approach to business transformation, the most important business processes are those that relate to Customer Experience Management across all fronts:

  • Manage customer loyalty
  • Manage customer value
  • Manage customer relationships
  • Manage customer feedback

These processes cross the more  traditional high level process siloes of “Manage Sales, Manage Marketing, Manage Customer Service, ” which were usually organized along departmental lines.

What actions will be taken based on the actionable intelligence that big data provides? Initiatives across departmental siloes must be closely orchestrated or the customer experience will become chaotic and confusing. Marketing campaigns have to be coordinated with activities across all customer facing roles in the organization. Effective enterprise program management is critical to this successful coordination. Marketing has to be thought of less as a department and more as a shared business responsibility.

When trying to leverage big data, it’s important to step back and answer critical questions before moving forward on multiple fronts:

  • What strategies and processes do you use to influence customer behavior on your website, in your retail outlets, at virtual and real time events? Are they working synergistically, or are they are crossed purposes?
  • What change management principles do you apply to shift customer attitudes towards your company, your employees, your products? Are you fully leveraging the power of third party change agents, or only applying  traditional, direct influence measures?
  • Are our processes too rigid to allow us to be a world-class, big data-driven organization? Should we concentrate on defining broad strokes strategies instead?

At the end of the day, the most successful businesses will be those that harness the power of big data and big process thinking to outrun the competition. More food for thought on the intersection of big data and big process can be found at: