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Footnotes
1In this article, the terms “creative destruction” and “disruptive innovation” will be used – somewhat in an undisciplined way – almost interchangeably.
Part VI
Digital Business Outcomes
© Springer-Verlag GmbH Germany 2018
Claudia Linnhoff-Popien, Ralf Schneider and Michael Zaddach (eds.)Digital Marketplaces Unleashedhttps://doi.org/10.1007/978-3-662-49275-8_23
23. Preface: Digital Business Outcomes
Jan Zadak1
(1)Hewlett-Packard Enterprise, Vresova, Czech Republic
Jan Zadak
Email: [email protected]
The Global world is transforming at an unprecedented speed offering unique opportunities to new market players yet representing sometimes unique challenges to established companies. Whilst many aspects of a typical company operations have been digitized over the past decades, we are currently experiencing true Digital disruption in every industry.
Fundamentally New Business Models on the one hand and Digital Transformation of the established business architectures on the other are offering both newcomers as well as established firms a unique possibility to challenge the status quo and impose disruptive market movements.
Over the past decades, the IT industry has often played an enablement role: ranging from ERP systems, transactional CRM system, supply‐chain systems, manufacturing execution systems, data archiving and records management systems, etc. IT has mostly been positioned as the “to have” cost item on the company strategy charts and investment priorities.
Yet the Global Digital World has changed the competitive landscape once and forever. Achieving business agility and market reach, creating brand awareness and product preference, driving ongoing compliance and market leadership through differentiated capabilities and unique customer experience is mostly impossible without IT taking on a central role within the company strategy, unleashing hidden internal company resources and assets while opening potential new external market opportunities.
Yet the central questions for most of the established players are “How do I approach my company Digital Transformation?”, “Where do I start?”, and “How do I fund it?”.
Many leaders have found inspiration in the value disciplines strategy framework originally developed by Michael Treacy and Fred Wiersema well outlined in their book “The Discipline of Market Leaders”1 [1] and centered around three value disciplines: operational excellence, product leadership, and customer intimacy.
In his very inspirational book “Digital Disciplines”2. Joe Weinman introduces four Digital Disciplines: information excellence, solution leadership, collective intimacy, and accelerated innovation [2].
&n
bsp; “Playing To Win”3, [3] is one of the best business books ever published on this subject providing pragmatic and practical playbook on how to makes strategic choices and implement winning strategy in practice.
The author firmly believes that Business strategy and Business architecture should and must be the starting points when building Digital strategy. Answering questions about “How will the company differentiate and compete in the marketplace? How will it win? How will it create value?” are at the core of the matter. Those answers help articulate essential points of view of “What is core” and “What is non‐core” in terms of company portfolio, go‐to‐market strategy, company value proposition and innovation as well as company core assets and investment focus areas.
Underlying company Business processes then reflect the above strategy and the way company intends to execute and define its Management system.
Digital architectures offer a myriad of opportunities to leveraging external marketplace for sourcing, delivery and executing those business processes, tasks and activities that are non‐core to company value creation, value proposition and business architecture. As an example Software as a Service (SaaS) offerings, Business Process as a Service (BPaaS) capabilities, etc. offer consumption based models to deploy target business architecture, at highly competitive cost. Their effective and efficient integration with the retain organization and the delivery operating model are one of the major cornerstones to drive true Business Outcomes from Digital transformation.
Over the past 20 years, Global corporations have been deploying global shared services architectures mostly aimed at reducing costs. Different maturity models have been applied to achieve synergies and drive evolution of the global shared services models. The underlying benefit comes from the fact that those models in general forced corporations to think hard about their organization efficiency, effectiveness and value creation. The time is ripe to take full benefit from Digital Transformation in the broadest sense. Whilst global shared services organizations have been mostly focused on the efficiency to be gained in the back‐end part of the company, digital transformation can be deployed across the entire value‐creation chain. Creating Digital transformation maturity model helps drive the right discussion yet it is important that Business Outcomes “lenses” are extensively used to prioritize and sequence the digital transformation programs.
Strategy – technology – people – processes underpinned by a major management of change. This is a typical framework for digital transformation.
Starting with the business model and strategy angle, the business model innovation anchored on digital technologies has firmly established itself as a major market disruptor. More than $77 trillion global economy offers vast playing field – essentially unlimited opportunities exit to replace and disrupt existing market players by serving existing customer needs through new digitally‐enabled means. This includes many well‐known examples from the travel & transportation industry (Uber) and hospitality industries (Airbnb). Retail digital disruption is firing on all cylinders as well. Several major established industry conglomerates are either entering the digital arena through their own “4.0” products and capabilities (e. g. GE, Bosch IoT Cloud) or are transforming their internal digital capabilities.
On the technology side Hybrid cloud, IaaS, PaaS, BPaaS, master‐data management, security and risk management, business outcome service SLA’s, big data and information management, DevOps, automation, robotics, IoT are some equally typical cornerstones of Digital Transformations. These can define whether a corporation will prosper in the new Digital world or whether it is going to disappear from the list of meaningful industry players.
The People aspect of the digital transformation is in the authors’ experience vastly underestimated, vastly underleveraged and in many transformations grossly neglected. It is essential to map out the talent, skills, experience and capabilities needed to succeed in the transformation as well as to land the new business model.
Let’s go back to one of the central questions for any company Digital Transformation “How do I fund it?”. Most of the established corporations rely on highly customized operations. This highly customized business architecture is often underpinned by expensive, monolithic applications enabling the company to execute on the exiting business model yet imposing high costs, low flexibility and a lack of agility. Any change in company direction aiming at increasing market relevance and competiveness is cumbersome, expensive with poor time‐to‐results.
Most companies can unlock short‐term and mid‐term value by improving the IT delivery model on their global infrastructure through appropriate deployment of the hybrid cloud in direct combination with IT operations automation. This approach can free‐up capital and execution bandwidth to start deploying agile development method or directly DevOps methodology to exponentially increase company IT agility, responsiveness and ability to build digital assets. When well executed both steps also typically yield better operational stability and IT services availability.
Mid‐ and long‐term funding opportunities exist in unlocking value from non‐core yet highly customized parts of the operations. This is the more complex Digital Transformation part yet the one offering typically sustainable roadmap to creating meaningful business outcomes. Whilst IT can help connect the dots, creating customer and shareholder value, market leadership and sustainable competitive differentiation won’t happen without the top company leaders leading along the way.
This part of the Digital transformation is highly complex and offers multiple different approaches. Segmenting such transformation into smaller transformational programs offers a way to de‐risk the transformation and also to prioritize the execution of the individual transformation modules based on business outcomes (= value) vs. risk assessment.
It is important to note that any such transformation is making the traditional perimeter‐based security approach obsolete. New cyber‐defense strategy and deployment is needed to assure appropriate security and safeguarding of the company assets.
Innovation is the more intriguing and often highly unpredictable aspect of the Digital Transformation. Creating meaningful business outcomes through digital (business model) innovation often requires a whole new set of topics to be addressed: where do you focus your innovation, how do you enable it, how do you encourage it, how do you take benefit of it? Establishing Innovation labs and Digital Innovation centers of excellence is key to enabling the employees to focus on innovation, stimulating fast prototyping and fast learning accelerating the idea‐to‐concept‐to‐solution cycles and ultimately maximizing the company business outcomes in the shortest timeframe.
In summary, the global world is going through one of its largest transformations ever fueled by Digital technologies. Global economy is being fundamentally reshaped. New and established players are taking advantage of the new digital business models, digital innovations and underpinning technologies. Established players do not need to be necessarily on the losers’ side. They can benefit from their established brands, scale and market credibility yet need to embark on an end‐to‐end digital transformation of their business models, management systems, IT and operations to remain relevant. Meaningful business outcomes can be derived from such transformation if well planned and executed with total endorsement of the company leadership.
References
1.
Treacy, M., & Wiersema, F. (1995). The Discipline of Market Leaders. Addison-Wesley.
2.
Weinman, J. (2015). Digital Disciplines. Hoboken, New Jersey: John Wiley & Sons.
3.
Lafley, A., & Martin, R. L. (2013). Playing To Win. Boston: Havard Business Review Press.
© Springer-Verlag GmbH Germany 2018
Claudia Linnhoff-Popien, Ralf Schneider and Michael Zaddach (eds.)Digital Marketplaces Unleashedhttps://doi.org/10.1007/978-3-662-49275-
8_24
24. Software Industrialisation – How to Industrialise Knowledge Work?
Josef Adersberger1 and Johannes Siedersleben1
(1)QAware GmbH, Munich, Germany
Josef Adersberger (Corresponding author)
Email: [email protected]
Johannes Siedersleben
Email: [email protected]
24.1 What is Software Industrialisation?
This paper is based on our experience with small to large scale industrial applications in areas such as automotive and telecommunication. We believe our observations valid for knowledge work in general, and by no means confined to any particular type of software such as cloud applications or embedded systems. In every area there are specific tricks of the trade, but any type software production is knowledge work performed by humans and quite different from industrial production on assembly lines, with analogies being rare and often misleading.
The world needs more software than it is able to produce. But programs can be written all over the world, well‐trained programmers in many countries are globally available. We therefore should be able to Increase the software production capacity,
Digital Marketplaces Unleashed Page 33