The Irony of Business Transformation the Role of a Chaos Manager
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Explanation of some new business concepts and roles. On the one hand, in the digital economy, information is the world's new currency. On the other, something called “management chaos" reigns supreme. If you are an IT executive, a business manager or a legal counselor, you need to help your organization build a strategy to deal with information chaos. Presented on Gartner Business Process Management Summit 2016. More info: http://www.auraportal.com/
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The Irony of Business Transformation the Role of a Chaos Manager
- 1. The Irony of Business Transformation: The Role of a Chaos Manager. Presented by ILIAN RADOYTSOV
- 2. You are a Chaos Manager
- 4. User driven
- 9. “There is nothing so stable as change” - Bob Dylan
- 10. The big bang of enterprise systems
- 14. Exploding the volume, variety, and velocity of information
- 15. Exploding the building blocks of digital transformation
- 18. The Office
- 19. The Challenge
- 20. Thank you Presented by ILIAN RADOYTSOV
Editor's Notes
- Hello, my name is Ilian Radoytsov, Sales Director for AuraPortal. I'd like to welcome you to Meet the Challenge of Digital Transformation. In the last 15 years I've been helping organizations use technology to improve their business, I've never seen a more disruptive time. On the one hand, in the digital economy, information is the world's new currency. On the other, something I call “management chaos" reigns supreme. If you are an IT executive, a business manager or a legal counselor, you need to help your organization build a strategy to deal with information chaos.
- This keynote will help you do just that. First, how can you be more valuable to your organization? How will you help your organization prepare so that it's not left flattened by the information chaos steamroller? Second, how can you, as an individual, prepare for the era of digital transformation? What skills do you need to operate in this new world? What skills will you need not only to survive, but to thrive in the era of digital transformation? This keynote is not just for IT people. It's for everyone who acts as a chaos manager.
- The challenge that we're experiencing is that business people can no longer ignore the IT elephant in the room. It is not something they can simply pass over to the IT dept. and wait for the IT guys to work their magic. On the contrary, there is now a need to view IT with as much emphasis on the "I", "Information", as we've historically placed on the "T", "Technology".
- Organizations have spent three decades building out enterprise systems of record, that is, the first generation of systems used to digitize basic elements of business, but we're moving into an era of systems of engagement, by which I mean systems that are pervasive, that are user-driven, and that touch every element of our business.
- You can sense this pervasive impact of technology by listening to the perspective of users. For example, process workers are asking us to stop making them copy and paste the same information in five different spreadsheets. Knowledge workers are telling us they are drowning in information but thirsty for knowledge. Security officers are telling us that information is leaking out of the organization at every turn. Record managers and lawyers are concerned that the volume of information is threatening the business due to increased risk and increased exposure. IT executives are concerned that they are being marginalized and that the business is increasingly working around them rather than with them.
- And the C suite is concerned that they will be the next Blockbuster who misses the arrival of a Netflix innovator because they're too focused on legacy systems and business models. ### Former Blockbuster workers all over the world must cringe every time they hear the words "online streaming" and "on-demand." That's because back in 2000, Reed Hastings approached former Blockbuster CEO John Antioco and asked for $50 million to give away the company he founded — Netflix. Antioco, thinking that it was a "very small niche business," ended the negotiations and didn't buy Netflix, which at the time was a DVD mailing service, according to Variety. ###
- Let's have a look at a bit of history. Systems of record are the core systems that were put in place during the 70's, 80's, and 90's to automate the first generation of digital processes. Think of these as the very initial replacements for paper-based processes. During the era of mainframes, our primary focus was on managing batched transactions. This evolved during the mini computer era into a focus on managing departmental processes, and in the PC era, the focus moved to managing documents.
- Information surrounds us. We are trapped in a blizzard of Documents, emails, videos, podcasts, voicemails, texts, Tweets, Facebook posts, and LinkedIn conversations which have formed the informational backbone of our personal and work lives. I use the phrase “chaos management" to describe this ongoing and accelerating state of massive information disruption and our difficulty in effectively utilizing this avalanche of data. Don't let your business get snowed under! and don't just ride the storm- rise above it , meet the challenge by using the information to understand and exceed customer expectations: that is the competitive challenge today. In the face of all this massive change, certain employees, such as Chief Information Officers are increasingly under siege. There is probably no more vulnerable role than that of the CIO in a modern organization.
- One newly appointed CIO told me, "CIO ought to stand for Career Is Over," and as Bob Dylan would say, “There is nothing so stable as change." On the one hand, in our digital industrial economy, information has become the central currency by which organizations create value. On the other, information chaos is making it increasingly challenging to harness that information effectively. It's a whole new world of information requiring a new set of business principles. The collision between systems of record and systems of engagement has set off what I like to call an informational big bang.
- Think about what enterprise technology systems currently look like. It's a world where IT acts like a railway system, moving huge volumes of data from A to B on fixed tracks. It's a world where IT reduces costs by substituting people with technology. Processes are standardized, automating simple or repetitive processes. Executives are generally oblivious to technology, and they bolt technology onto existing business strategies instead of developing new ones. Complexity equals job security. IT staff pride themselves on the complexity of their projects. Mobile and social are differentiators, and even having a mobile and social strategy can at least bring temporary competitive advantage. And pure technical skills are valued. The focus is on development, not on integration. Now think about what the world is likely to look like in just a few years.
- IT will act like a taxi company, allowing information journeys that are flexible and constantly changing. IT will be focused on raising value. IT is part of growing revenue, not just cutting costs. Processes will become agile. The emphasis will shift to how knowledge workers react and interpret rapidly changing customer information. Executives will become technology-aware. Personal experiences with technology will be carried over into the workplace. Executives will develop new business strategies based on new technologies.
- One, an organization is a system of information networks. It only operates effectively when there is a clear and predictable information flow within and between these networks. Two, 50% annual growth in the volume of digital information means that these networks, and especially the points of connection between them, will become increasingly unstable. And three, without intervention, the resulting information chaos will threaten the viability of the entire organization.
- Simplicity will be valued. Perfect and complex solutions will be replaced by those that are simple and quick to implement. Projects will need to be justified in one quarter, not across multiple years. Mobile and social will be expected from all companies, they will be a must. And technical skills, in context, will be valued. Skills in how systems link together will be increasingly important. When you compare these differences, you can sense the massive disruption to enterprise IT that is about to occur. The future will not just be a linear extrapolation of the past. Organizations need to think logarithmically about the volume of information they'll need to manage in the next five years. There are three elements to it, and they go like this:
- Gartner analyst Douglas Laney has assembled an impressive list of examples of the volume, variety, and velocity of information. Here are a few. Walmart deployed semantic search on their website, which increased their conversion rate from 10 percent to 15 percent, generating significant new revenue. The supermarket chain Tesco collected 70 million refrigerator-related data points coming off its units and fed them into a dedicated data warehouse. Those data points were analyzed to keep better tabs on performance, gauge when the machines might need servicing, and cut down on energy costs via proactive maintenance. Macy's adjusts the pricing of its products in near real-time for 73 million items based on demand and based on inventory. That's a huge amount of data to track and update. You get the idea. All of this translates into a period of radical growth in information. We are at an unusual moment in time when all of the major analyst firms like Gartner agree that a revolution is underway, that there will be unexpected victors and victims in this revolution, and that information is in the middle of it.
- As we shift our frame of reference to the world ahead, there are four major questions that every organization must ask about its digital transformation strategy. How do you manage the risk of growing volumes of information? How do you transform and automate your information intensive business processes? How do you use information to better engage customers and employees? And how do you get any business insight out of all the information you are gathering? These four issues, risk, automation, engagement, and insight, are the key questions that businesses should be asking.
- Building a strategy for digital transformation is process automation. How should your organization transform and automate its information-intensive business processes? The walls that used to exist between your customers and all those messy, back-office business operations are being torn down by social technologies. Organizations can no longer hide the flaws in their processes. The next five years will witness a massive reinvention of business processes. If the first wave of automation was all about digitizing existing processes, the next wave will be much more radical and involve the actual reinvention of processes from the ground up. Organizations understand that they have to automate, and they need to expose their back-end processes to the light. 68% of organizations agree that business at the speed of paper will be unacceptable in just a few years. Getting there, though, is quite another thing. The amount of paper still used in your business processes is a good indicator of how far behind you are. So reinventing your core processes is clearly critical to building your digital transformation strategy. In the next video, I will discuss the changes needed to better engage your customers and employees.
- How can your organization use information to better engage customers and employees? In this new world of rapidly changing information technologies, our ability to engage is the key to success. If you're not fully engaging your customers, your partners and your employees, your business is probably falling behind the competition. You can no longer assume that engagement will happen serendipitously in your organization. You need to think strategically about the information systems that are necessary to make it happen. Unfortunately, most organizations still look like the fictional company Wernham Hogg Paper Company in the show "The Office."
- Most of the systems that are used to engage employees are an afterthought. In far too many organizations, collaboration is just another name for sending around big attachments on email to a long list of recipients asking everyone to comment and then sending those comments via a reply to all message. Social technologies give us a way to rethink and reinvent this, and directly tie collaboration to your business processes. There's also a critical need to rethink how we engage with customers. Most organizations have a thin veneer of social engagement. They have a Twitter account or a Facebook site or a mobile app.
- The challenge moving forward is that most of these systems are basically just a veneer, unconnected with the core back-end business processes. Everyone has experienced the call center from hell, where you wait in a long queue for a real person only to have to constantly restate information to all of the various people with whom you speak. Organizations have long had a challenge with building a 360-degree view of the customer. In an era of radical transformation, this problem is getting more pronounced, except now the customer has social power to immediately tell the world when they've had a bad experience with your business.
- Feel free to contact me with any questions. I'm Ilian Radoytsov, and thank you for joining me for this keynote on Meeting the Challenge of Digital Transformation.