Chuck's Blog

Information: The Third Pillar Of Business

You study a situation, you make assertions about what will likely happen -- and then you see real-world examples of those predictions becoming reality.

The big notion?  Traditional enterprises will be forced to recognize their aggregated information as a strategic asset, much in the way they think about money and people.

Enterprises with digital business models already view the world this way.  Traditional enterprises are evolving into digital ones.  Ergo, as they evolve, one of the visible markers should be a pronounced shift in how they view their information resources: from ancillary to strategic.

I now have enough observed examples at hand to claim at least partial validation of this effect.  And, as a benefit, I think I can now start to make more confident assertions about what more organizations will be likely seeing in the next few years.

Building A Executive Digital Literacy Program

Being perceived as a visionary is a relatively easy task.  All you have to do is identify a handful of clearly visible trends, extrapolate a bit, and then loop back with practical advice on what to do about it now.

Example: I have a friend who's currently looking at oceanfront property.  He showed me a place that was right on the water.  I suggested he might consider a house with a bit more elevation?  Sure, it might not be a visible problem now, but if you think out a few years ...

Here's the point: there's rapid and unprecedented climate change in the business world.  Our society is forcefully transforming to a digital world.

Our current business models -- designed for the physical world -- now have to be dramatically re-engineered to adapt and thrive in this new economy.  A palpable sense of urgency is at hand.

IT can supply the platforms and tools, but do our leaders and management teams have the necessary skills and context required to lead the way forward? 

If you can answer "yes", you're quite fortunate -- the rest of us have some heavy lifting to do.

Just like we had to learn to thrive in a global economy, and a sustainable economy -- we now have to learn how to thrive in a digital economy. 

And that's something they didn't teach us in business school.

I wish I could point to a proven body of knowledge and delivery mechanisms to achieve this important goal, but no such luck

I've been looking, and there isn't much out there at the executive level -- sure, there are pieces here and there, but they certainly don't fit together as I'd like to see.

At some point, this will surely change, but in the meantime, it's a roll-your-own proposition.

I've now been asked several times -- if I were constructing an agenda for mid-to-senior level leaders -- what would I put in it?

So, in an effort to kick-start the discussion, here it is:

When Big Data Changed Radiology

This week is the annual gathering of the RSNA -- the Radiological Society of North America.  And for many of us, it's not just another industry trade show: it's a microcosm of the powerful forces that will inevitably play out in industry after industry as we move to pure digital business models.

The underlying premise of a digital business model is simple: it's a complete re-invention of the value proposition along digital principles vs. simply automating familiar physical activities.  And, in health care, the business at hand is delivering better patient outcomes far more effectively and efficiently.

Within the broad spectrum of healthcare, radiology in particular is at ground zero for this transformation.  Modern radiology has become an entirely digital proposition for the most part, and -- in the process -- radiology itself has been transformed.

And, like so many things, there are lessons to be learned from what's happening in radiology -- not only within healthcare itself, but more broadly when looking at a wide range of professions that haven't been sucked into the digital vortex – yet.

Growing Your Digital Business Model? Fertile Ground Helps!

The next major wave of disruption appears to be starting its tear through organizations everywhere.  It's not a technology wave, it's a new way of doing business in our digital world.

Learning to compete using a digital business model appears to be comparatively easy if your company or organization was fortunate enough to be "born digital".  For the 99%+ of organizations that aren't so lucky, the far greater challenge lies in transforming a function that was born in the physical world into a modern digital one.

In these digital business models, technology is used very differently.  In a traditional business model, technology is primarily used to automate and improve the efficiency of existing business processes.  In a digital business model, technology is used to re-invent and re-imagine the fundamental proposition of the business.

I've written a fair amount on this topic before.  If you'd like to catch up, I've created a blog resource page that lays out the thinking at different levels: strategy, platform, leadership, new skills, etc.

By now I've seen plenty of strong differences between the organizations who are doing well at this strategic transition; and those that aren't.  And, just like having the right conditions is a boon to growing crops, it appears that the same thing is true for growing digital business models.

The Challenge of Creating Executive Digital Literacy

The premise is simple yet powerful: our world is quickly becoming a digital one. 

Business models established in the physical world now need to be re-imagined and re-invented in the new digital one. 

And, depending on your particular situation, there's anything from a persistent unease that the world might be changing, all the way up to a set of high-priority strategic initiatives being purposefully driven by the board of directors.

Regardless of where your group might be in this continuum, there are some basics at hand. 

You'll need to understand what's going on, and why.  You'll need to figure out your digital business strategy.  You'll need strong leadership who can move an organization forward.  You'll need a platform to support the transformation, and some new roles.

But is all that enough?  Sadly, no.  It's not enough to do all of this in isolation; the broader leadership ranks have their parts to play, otherwise progress will be limited. 

But, if you think about it, we've seen this movie before.

The world is changing, again.  Every time there's a significant contextual change, we're always faced with the challenge of arming our business leaders with the new skills they'll need.  It's not just about bringing in the experts, it's about creating a new category of skills into the leadership ranks.

The world goes global; how do you teach globalization?  The world goes sustainable, how do you teach sustainability?   The world goes digital, how do you teach digital literacy?

The topic of establishing wide and deep digital literacy within the leadership ranks is now shaping up to be a major challenge -- not only for the customers I work with, but internally here at EMC.

And, while it might not be easy to close this gap, it's going to have to be done. 

The alternatives are far harder to contemplate.

Doing Business In A Digital World

I've spent the last few posts exploring digital business models, and everything that comes along with them.  It's easy to spot a digital business model: a company has fundamentally re-created their value proposition for a new world.

Now that my radar is on, I'm finding these everywhere.  And there are many, many stories to be told and learned from.

Today's story comes from Jaguar Land Rover (JLR), and how they successfully re-invented one of their core business processes (designing and manufacturing vehicles) using a digital business model. 

They were able to bring a very successful SUV to market (the Evoque) faster/better/cheaper by creating powerful simulations around 100% of their processes.

By making the leap to a digital, they were able to suddenly compete with the big boys.

The common pattern?  Don't simply automate physical processes using technology; re-invent them. 

And that's what JLR did.

The Digital Business Architect

We're mid-way through a series describing the next wrenching transformation facing many of our organizations.

It's a shift to a digital business model ; a re-envisioning of our value proposition for the new world.

I'm doing my very best to methodically unpack all the components:

• In "The Next Transformation", I attempted to describe the inevitable shift, its motivations and consequences.

• In "The Digital Business Platform" I took a brief tour through the components of the new digital factory.

• In "The Digital Business Strategy" I did what I could to describe cross-industry examples of emerging digital business models, and a methodology I've seen that can get the discussion moving in the right direction.

And now, I'd like to spend some time looking at a key role that seems to exist in most digital business models I've seen so far: the behind-the-scenes process architect.

The Digital Business Strategy

The next transformation upon us isn't about technology, it's about business.

Many established organizations are now frantically scurrying to re-invent their value proposition in the new digital world.  I've now seen enough of this happen -- up close -- that I can start to share the patterns I've observed.  And, as with all useful patterns, there are obvious implications at hand.

In "The Next Transformation", I did my best to describe this surprising shift, and make a case for its inevitability.  In "The Digital Business Platform" I took a quick jaunt through the common elements I've observed in the supporting functionality.

And, in this post, I'm going to try to feebly attempt to synthesize common elements I've observed in these newer digital business strategies. 

But, like clothes or food or music, everyone is going to end up wanting something a bit different -- and that's what it's all about, isn't it?

The Digital Business Platform

In a previous post, I did my best to make a case that yet another wrenching transformation was collectively upon us.  This time, it's a business transformation where IT can play a key role.  One by one, familiar physical business models are being re-invented for the digital world.  

A small group of progressive business leaders appear to be busily at work, thinking about how they'll thrive in a new digital economy.  They're thinking strategy, model -- and platform.  Although perhaps modest today; it will inevitably grow over time.

In this digital business model, IT is thought of very differently. 

IT becomes the "digital factory" where new products and services are produced.  The funding model changes, the skill profiles are different, the thinking is different, the architecture is different -- the very rationale for IT even existing is now very different. 

In a digital business model, IT exists to solely generate revenue; and not necessarily to help the company save money through automation and efficiency.

I have now seen enough of these new beasts -- as well as the organizations investing in creating them -- that I can start to point to frequent similarities.  The words they might use to describe their concepts and efforts might vary; their patterns do not.

An important starting point: the transformation from a physical to a digital business model is always a matter of business strategy and led by senior executives; IT can play a key enabling role, but they alone cannot lead the charge. 

But IT can prepare ... and probably should.

The Next Transformation

Over three years ago, I went out on a limb and started to write at length about a key transformation that was coming.

I believed cloud concepts would likely transform every familiar aspect of IT: not only the technology, but how IT was organized and delivered.

It was rather bleeding-edge stuff at the time, but as we sit today, the industry concepts -- and their impact -- are now widely acknowledged.

You don't get quizzical looks anymore when you launch into a cloud or ITaaS discussion.  People get it.

At the time, I didn't think my observations involved any great insight, for me they were just simple extensions of patterns  I was starting to see every day.  A new transformation pattern was emerging; all it needed was to be described, along with a handful of implications that would result.

Well, it's happening again. 

There's another big transformation starting to occur.  Just like the cloud discussion, it's comprised of familiar elements, just organized and thought of in a different way.  I've been poking around the edges for quite a while; I think now is the time to dive in, state my case -- and hopefully drive the discussion forward.

Cloud is transforming IT, creating the capability for IT to transform the business.  I see this happening in my customers' businesses.  I see this happening in EMC's own business.

This next transformation is what I'll call a digital business model. 

It is a not a new concept -- examples are everywhere.  Having a great digital business model is somewhat easier if you were "born digital", e.g. Amazon, Facebook, eBay, LinkedIn, et. al.  

These models are easy to spot: they are designed so that an absolute minimum of the business exists in the physical world.

Unfortunately, this digital business nirvana is much, much harder to achieve if -- like so many of us -- your business was born in the physical world -- and is now being challenged (or disrupted) by digital business models.

Sooner or later, we will all have to transform our organizations into digital models.  You can see many examples of people who are already hard at work at one aspect or another.

It is simply inevitable from my perspective.  And I'm not alone.

And if you tend to think deeply about either technology strategy or business strategy (or hopefully the intersection of both!), this is a highly relevant discussion.