Management Approaches Focused on Digital Transformation

Facts and Figures

As a consequence of Digital Transformation, the best-known management approaches (both IT and non-IT) are renewing their publicized versions. Already in 2019, only 7% of companies admitted that they hadn’t heard about or that they were not implementing these standard management practices.

  • PMI: Project Management Institute (Pennsylvania USA), just adopted Agile practices in the 6th version of the Project Management Body of Knowledge publication. They have Agile publications too (e.g.: ACP, Agile Certified Practitioner).
    • PMI® membership: 528,053, with an overall increase of 8.8% over the prior 12 month period.
  • Total Project Management Professional(PMP)®.  
    • Credential holders: 871,893.
    • Worldwide: 292 PMI® chapters, with a total chapter membership of 279,881.
  • CMMI Institute (Carnegie Mellon University): Capability and Maturity Model Integration.
    • Currently version 2.0.: 3000 companies worldwide get some maturity level certification every year. (Isaca)
  • ITIL (Cabinet Office, UK): Information Technology Infrastructure Library.
    • Currently version 4: more than a million people certified worldwide (it is a “must” knowledge area for every IT service professional).
  • SAFe (Scaled Agile Inc., USA): Scaled Agile Framework for the Enterprise.
  • DevOps: Development + Operations (open and shared approach worldwide).
  • Over 50% of C-level execs cannot measure their corporate values, due to a lack of standardized processes, process assets and jobs aid, according to McKinsey & Company.
  • More than 30% of companies have problems monitoring plans and making adjustments.
  • Hong Ou (head of EPG Group’s IT department for China Merchant Bank), thinks that in 90% of the company’s projects utilizing CMMI V2.0, appraised preparation time was reduced by 50%, making it easier for the company to adopt Agile.
  • Data literacy is “the ability to read, write and communicate data in context”, as defined by Gartner.
  • 80% of companies will start to develop data literacy competencies by 2020.
  • By 2020, 50% of businesses will not be able to achieve their value due to deficient Artificial Intelligence and data literacy skills.
  • The three biggest obstacles for Digital Transformation are:
    • Cultural issues
    • Poor data literacy
    • Lack of talent and skills.
  • Employing tools, training and encouragement as a part of its digital workplace strategy, a company contributes to its employees’ mobile, analytical, creative, collaborative and innovative skills.
  • Data language dialects are specific to the business, industry or setting –e.g.: hospitals, governments and the insurance industry talk data their own way… so it must be tailored to the context–.

 

  • 75% of companies say it is hard to recruit main IT roles with this knowledge:
    • 59% find it hard to fill some roles.
    • 16% to fill all of them.
  • Only 9% of companies think AI will reduce IT staff from now to 2021:
    • For the moment, the optimal candidate is a person with the right management approach and data literacy

Sources: The above text is a creative synthesis elaborated from the following sources: Sarah Schlothauer,(Jaxenter);  Project Management Institut ; ISACA (Information Systems Audit and Control Association)

These sources have been selected from a total of 11 articles on the subject matter. Which in turn are the result of sifting through 56 articles.

THESES / MAIN IDEAS

An important effect of the Digital Transformation is that companies not only sell "products" but offer "services", where the products are a part of the service provided:

Example: telecommunications companies offer mobile phones to use their services.

  • They are companies focused on delivering services (and they charge for it), but they need to provide the user with the enabler to access and use their service.
  • These are the fundamentals of Information Technology services:
    • Value is relative: to measure it, you should understand how your clients perceive your services.
    • Outcomes are enabled by service outputs: a photography service’s output is a photo, but memories evoked by this photo are the outcome.
    • Co-creation of value for both parties: the clients and the service.
      • A service may benefit from new capabilities or relationships with its client, apart from money…
      • And adding or removing some costs and risks –e.g.: employing and managing expensive technical staff, instead of the client having to do so–.
    • Companies benefit from new versions of PMI standards, ITIL, CMMI, or SAFe:
      • Products and solutions of a better quality: these approaches emphasize value creation, not just delivering services or selling products.
      • Better customer experience: the continual feedback from product owners (who know the expected product) when developing makes it more likely to deliver products or services fit for purpose and fit for use.
      • Efficient and effective delivery service:
        • If something adds up value, then do it more
        • If some other practice or activity doesn’t add value, do it less.
        • This is a never-ending way of improving.
      • Better supply chain and lesser enterprise risk: as the processes are being monitored by metrics, they can be tailored or adjusted in order to gain efficiency, eliminate waste…
    • Currently there are no services not based on technology:
      • So one primary focus for any company is managing the capacity of its IT services:
    • The services must have utility and warranty.
    • Utility:
      • Is the service useful for the user?
      • Does it eliminate any barriers or impediments?
      • Is it fit for purpose?
        • Example: an automatic translation service that removes the language barrier in business transactions.
      • Warranty:
        • Under what conditions is that service provided to customers and users?
        • Is it fit for use?
          • Is the service secure?
            • Who is allowed to use it?
            • Who is not?
          • Is the service available?
            • Can the service be used when the user needs it?
              • Example: the user finds it in an online shopping web, when he/she wants to buy something (any time, any day of the year).
            • Does the service have continuity?
              • It doesn’t interrupt its operation
                • Example: the system is interrupted when the user is making a transaction, losing the whole
              • Does the service have enough capacity?
                • It works at the needed speed and with the adequate performance.
                • A user who has to wait for a website to offer an answer, will use a service from the competition…
                • Digital transformation means not asking users for patience: we must offer them instant answers.
              • To offer its value, the service must satisfy the four conditions at the same time: security, availability, continuity and capacity.
            • Example: the Life Insurance (LI) sector faces the following challenges in its digital transformation management and practices:
              • Traditional face-to-face engagement culture makes it difficult to realize the importance of virtual user experience.
              • 5-10 year-horizon planning needs to be adapted to the concept of Agile to respond to changes in shorter periods.

sources: The above text is a creative synthesis elaborated from the following sources: Valerie Logan (cio.com.au); Aleks Yenin (medium.com).

These sources have been selected from a total of 12 articles on the subject matter. Which in turn are the result of sifting through 49 articles.

SCENARIOS

The new recognized management frameworks (PMBOK, ITIL, and CMMI Institute framework) are adapting their new versions to the consequences of Digital Transformation applied to corporate management, projects, data and technology:

  • PMI: the Project Management Institute is promoting Agile practices related to open communication, continuous improvement and the empowerment of workers.
  • Those Agile practices should be applied even in environments where planning can be predictive.
  • The question is not only “is it a good practice?” but is it a good idea now, for this investment or project, for this service, in this company, in this market?”.
  • CMMI: It is the framework of maturity in terms of software development practices. Considering that technology is currently used in every industry, and this includes software to some extent, the maturity level is relevant, and we must ask ourselves at what level are we positioned:
    • Level 1: Management, Agile approach and data-driven decisions are not part of the company’s know-how. It implies a loss of immediate competitiveness.
    • Level 2: Each investment or project is managed, including planning, monitoring and control, decision making, risk management… but there is no common and coherent management culture throughout the company. It depends on the manager, the type of project, or the level of risk of each investment.
    • Level 3: The company institutionalizes” the management approach, the Agile practices and the decision making based on data. There is a recognizable company culture common to all investments and projects.
    • Level 4: There are dashboards available at the corporate level, so the steering boards can extract and analyze the metrics, since they are defined at the corporate level.
    • Level 5: Real implementation of Agile Data. Since the whole company generates metrics in the same way, the employees (not only the steering committees) can use them to optimize productivity, processes and practices.
      • This last level is about making decisions based on metrics (high quality data) in any area of ​​the company. It means the democratization of the use of data.
    • The new version of this framework –published in November 2018– assumes that all developments are carried out from an Agile perspective: based on iterations, frequent feedback, ability to adapt to change, etc.
  • ITIL: This internationally recognized IT service management framework already includes among its work practices:
    • Management of cloud environments.
    • Agile data and agile management metrics for both the development and delivery of results.
  • With CMMI V2.0, ITIL 4 and PMBOK 6th a company would improve its business performance by leveraging its critical capabilities:
    • Product quality
    • Engineering
    • Delivering and managing services
    • Selecting and managing suppliers,
    • Planning and managing work
    • Business resilience
    • The workforce, and many more…
  • Example: the Life Insurance sector:
    • This sector will start to develop quicker when companies start to:
      • Learn more about clients: their lives, preferences and behavioral patterns.
      • Use Artificial Intelligence (AI) to provide relevant solutions.
    • A life insurer has immense opportunities to:
      • Become custodians of life data from customers
      • Engage with them in meaningful conversations throughout their lives.
    • Cognitive workflow with real time analytics would enable:
      • Feedbacks to participants.
      • Recommendations based on human behavior predictions.

Sources:The above text is a creative synthesis elaborated from the following sources: Ian Smith (IT Pro Portal); Project Management InstituteISACA (Information Systems Audit and Control Association) .

These sources have been selected from a total of 9 articles on the subject matter. Which in turn are the result of sifting through 41 articles.

RECOMMENDATIONS

Partners and suppliers: our strategy to select and work with partners in order to boost the Digital Transformation value must be based on…

  • Strategic focus:
  • Do we need a commodity” supplier?
  • An operational-level one?
  • A tactical collaborator?
  • A strategic partner?
  • Corporate culture:
    • Do we feel more comfortable trying to do more things ourselves?
    • Or are we used to outsource certain activities?
  • Lack of sources or lack of ‘expertise’: it would be better to outsource knowledge, rather than the lack of important knowledge.
  • Other reasons: cost, external constraints or demand patterns.
    • Information and technology (servers, storage, networks, databases, knowledge bases):
      • Say “no” to the culture of ‘silos’: maintaining different architectures increases the costs, profiles and time needed…
        • The cloud is the way to break silos.
      • The cloud is a model to allow on-demand access to a pool of computing resources, easily accessible with hardly any management effort with the provider of these resources.
      • The cloud requires less installation activities (may be none) and fewer technical professional profiles in the firm, but it also adds value, as it is:
        • Scalable: if we need more resources, we can have them without delay or “slow configuration tasks”. The cost follows the “aaS” modality (as a Service): payment for use.
        • Flexible: we can choose how many resources we need at any moment, so it supports greater volume of communications or processing tasks.
        • Elastic: we can choose how to use the resources.
        • Secure: cloud providers are high-skilled implementing security measures on its resources.
      • On the other hand, it implies more operating costs (but no purchasing costs) and is only accessible via Internet.
      • If used, Blockchain, IoT and RPA (Robotic Process Automation) are examples of technical solutions institutionalized across the company (implemented in the same way).
      • Other possible cross-technologies will be Artificial Intelligence, Machine Learning, Deep Learning or Cognitive Computing.
        • Organizations and people (culture, authority, roles, skills and competencies). What are the recommended communication values?
          • Transparency: we cannot ask people to manage hidden information or data.
          • Focus on people: Artificial Intelligence, Machine Learning, etc., are tools designed to help people and to be used by people, not the other way around.
          • “Low-tech” communication tools and more face-to-face communication, paradoxically:
            • These practices reinforce transparency and a people-centered management approach.
          • When the tools have to be digital, they should be collaborative work tools to facilitate online workshops, brainstorming sessions, mind maps…
          • Facilitative leadership style: micro-management doesn’t add value when working with high-skilled people…
            • They need the tools and time to work and innovate, not being constrained.
              • Let’s focus on the primary dimensions of our management scope:How can we improve or modify our management approach in order to take the most value from Digital Transformation?
    • Value streams and processes (activities, workflows, controls, and procedures). In order to provide value:
      • How are the different parts of the organization integrated to carry out activities?
      • Are we able to minimize waste?
      • Are we measuring the value streams
        • And are, therefore, aware of the waste?
        • If we can’t measure something, we won’t be able to improve it.

sources: The above text is a creative synthesis elaborated from the following Stuart Rance (sysaid.com); ITIL 4 Official Site.

These sources have been selected from a total of 10 articles on the subject matter. Which in turn are the result of sifting through 45 articles.