Developing Your Digital Dexterity

Developing Your Digital Dexterity

We live in an era where highly connected global markets and technology are transforming our economy. In response, many companies are attempting to digitally transform. IDC Forecasts that worldwide spending on Digital Transformation will reach $1.3 trillion this year. But, the harsh reality is that about half these efforts fail while 20% of CIOs secretly believe that their company’s Digital Transformation (DX) is a waste of time. (Wipro Digital 2017) Sadly, most of these efforts fall short of their intended result and fail to compel their companies to change. More often than not, they just increase technical debt, which is already drowning many companies.

Instead of a DX, they end up in Digital Quicksand, weighed down in legacy muck and rigid ecosystems. This occurs because they are too focused on the tree—the shiny new technology (i.e., social, mobile, analytics, cloud, AI, IOT, VR/AR, etc.)—and not the forest. The forest is made up of the elements that allow companies to own the lifecycle, harness their data, connect their ecosystems (product, organizational, customer experience [CX], and other technologies), and transform their culture. They are the basis from which to build a flexible and data-driven organization that will utilize the right people and resources in the most optimal manner to disrupt competitors.

The future necessitates that companies increase their digital dexterity. Organizations can no longer exist in a vacuum focused on execution, only trying to eke out incremental efficiencies. The greatest weapon a business can possess is flexibility—the speed to adapt and disrupt. Without it, you will not transform fast enough to compete, leaving your organization vulnerable to disruption.

To be more flexible, organizations need to transform holistically so they can adapt to changing market conditions. To achieve this, there needs to be a laser focus on your business goals and data-driven results with a mindset toward creating digital value wherever possible. For instance, increasing productivity and reducing your expenses is always a good thing, but what you are really striving for is improving your overall operating efficiency across the entire organization. Just reducing your expenses by a couple percent in IT does not transform your business.

DX is about a connected lifecycle—a continuous digital product lifecycle and connections to the other key ecosystems: the CX, the organization, and other technologies. The key to all of this is flexibility.

Most CX efforts should guide the customer right back to an upgrade or improved product or service. The question organizations should ask themselves is this: does our use of the data drive customers either directly or indirectly back to us? If not, why are we not providing more value?

The increasing digital culture demands more personalization. Along with the ubiquitous nature of technology, this will continue to escalate product complexity. Organizations need to improve their time-to-market, but allow for ever-increasing confluence of hardware, electronics, and embedded software, with an increasing number of options rising at a combinatorial (in other words—really, really big) rate. But, even more importantly, they need to drive collaboration and ideas into innovation at a faster rate.

In a recent blog entitled, Own the Lifecycle, I make the point that the shortest path to meeting your future customer’s needs is to “Own the Lifecycle.” This is at the heart of any organization’s DX journey—it is your “crystal ball.” In short, you use the data from the product lifecycle and other ecosystems to continually transform your organization to be in sync with customers, markets, and your people.

Ecosystem alignment and how these ecosystems relate to the product’s lifecycle—ideally, a fluid Digital Thread—is key to being a world-class company. Unfortunately, most organization’s product lifecycle is not digitally connected and lacks strong data governance. More still do not have virtual configurations of their physical assets in the field. I could go on and on, but the point is that if the operational (product lifecycle) ecosystem is disconnected, there is no chance you are using data to drive a better CX, a reduced time to market, and any meaningful gain in operational efficiency. You are not using your data to understand and adapt to tomorrow’s challenges.

Many organizations pursuing DXs often unknowingly lock themselves into a particular vendor’s technology stack and pricing. When the competitive landscape shifts and their vendor no longer supports their needs, they find themselves stuck. These closed dependencies are like hidden landmines, waiting to go off when you most need to flex. All enterprise technology should be open (published open APIs and schemas) so you can truly give your organization the ability to pivot, respond, and scale up and down as the market demands.

One of the root causes for failed DX efforts is the existing siloed organizational structures that protect the status quo and stifle cultural change. If the transformational effort is inside an operational silo, it is merely tactical, not a true DX effort. This topic deserves a whole book, but in simple terms, if the company’s organizational model is etched in stone, focused primarily on the execution of static yearly plans with budgets to match, you will not fare well against more adaptive organizations modeled to embrace and take advantage of uncertainty. Ask yourself: are you modeled to take on new threats and opportunities or do you have to wait for next year’s budgeting cycle? Do you empower teams to tackle problems across your company? Can you easily shift your resources to focus the right talent on the right problem to beat your competitor?

Every organizational model is made up of ecosystems that affect each other and the customer. Businesses that can adapt quickly to market conditions, disruptive technologies, and economic volatility are well positioned for success in a rapidly evolving digital landscape. The ability of an organization to flex not only allows you to achieve real transformations, but also enables you to move laterally—to sidestep threats and pounce with agility on opportunities to disrupt competitors. These are the companies that strive to spin up sustainable products and services as close to the speed of the idea as possible. My belief is that organizational models and cultures that are designed for mobilization, cross-functional collaboration, empowerment, and democratization of data are more agile, will react faster, and are less susceptible to disruption.

While the speed of ideas and promise of technology may seem alluring, if the organizational inertia drags the pace of organizational and cultural change to a crawl, and leadership can’t change it, then you are wasting your money because the organization itself will smother any DX effort.

At the heart of a nimble competitive company is one that has a digital product platform that offers open access, connectedness, and system flexibility. The seamless internal and external Digital Thread provides the basis for a connected end-to-end value chain from product creation to the customer and back again.

By owning the lifecycle, you provide your organization with flexibility. This includes an end-to-end view of the operation ecosystem that yields a deeper understanding of how your products and services are used and can be improved. You democratize your data so all value chain members can access it, leading to faster and better decisions. You increase your ability to collaborate, creating real synergy across your organization and supply chain. You create a real-time ability to respond to customer demands at every level of the company and support new products in conjunction with customers, partners, and suppliers.

Businesses can no longer afford to be blindsided. There is no question that an organization’s flexibility—the ability to recognize and adapt to new paradigms, to turn threat into opportunity—is the weapon of choice in today’s business world. The greatest strength of a digital PLM system is flexibility. I believe you find that in a real digital platform.