Posted  April 12 2022

Dynamic enterprises; What comes after digital transformation?

Digital Transformation
Written by Jerônimo do Valle
Over the past decade, companies have invested considerable time and resources in pursuing major transformational initiatives. While many can claim success, most would find it difficult to say which is the last stop on this journey. This is likely because digital transformation has never lived up to the hype and changing market demands.
After Covid-19, digital transformation remains the “siren song” for legacy companies looking to catch up. The secret that no one tells is that digital transformation, unfortunately, will not do this job yet. This is because digital transformation just "evolves" how an organization already works - from its current state to a new target state. For example, moving from ordering food over the phone to an app, or moving from call center customer support to chatbot-enabled online self-service. Digital transformation solves a specific one-off problem.

If the past year has taught us anything, it's that we live in an unpredictable world with rapidly changing problems. Organizations that focus on “individual” transformations will find themselves continually falling behind. Making a single pivot does not guarantee future relevance when what is being transformed is in danger of becoming obsolete when it reaches the destination. Instead, every business must become a dynamic enterprise - an organization that can respond quickly to changes in technology and consumer expectations, through a series of daily micro-pivots.

Changing an organization's ways of working to be dynamic reduces disruption, enables resilience, and leverages process and culture to enable rapid adaptation. Being dynamic means that an organization is always ready for the next challenge.

To start becoming a more agile and flexible business, it is important to understand the main layers of an organization and how they contribute, or not, to dynamism:

First, we have the “enterprise systems of record" level, which includes the fundamental systems and processes that represent a company's stable behaviors. The organizational elements that exist at this level change slowly. Organizations are working to modernize and evolve these systems, but this is usually not where the dynamism is applied; Long-term strategic decisions are most often employed with these systems of record.

Second, there are “channels of engagement”. These are all the different methods of delivering products, services, and interacting with customers, partners, employees, and other key stakeholder groups that span each of the digital touchpoints, including IoT, telematics, PoS, API, and digital customer experiences. This is where the biggest changes happen most quickly.

Last but not least are the “middle platforms” that bridge the gap between the stable systems and processes of enterprise systems of record and the ever-evolving channels of engagement. Organizations must be intentional about technologies, modern delivery patterns, processes and practices in the mid-platform space to create the features and behaviors that enable dynamism.

Each of these layers has a key role to play in optimizing the innovation lifecycle that companies must embrace to become truly “dynamic”. The lifecycle framework focuses on technological and cultural transformations in four different stages: Innovation means intentionally testing new methods to successfully engage target audiences. Emersion is when innovations are proven to be successful. Standardization is how innovations are intentionally incorporated and leveraged across the enterprise. And depreciation is the deliberate termination of technologies and processes when they become irrelevant so companies can focus energy and resources on what is delivering the most value.

By incorporating the technology, resources and strategic approach needed to be dynamic, organizations are able to rapidly evolve to meet the challenges of turbulent market conditions and better position themselves for success.

Successful companies are focused on enabling great experiences. Great experiences are achieved through exploration and evolution. Becoming great at feeling and responding requires cultural, organizational, perspective, technical, and process considerations. The art is in how to change the operating model without disrupting the organization.

Source: Forbes