Justin Hume Published Oct 25, 2020 Digital transformation is a long-standing buzzword that means different things to different people and organisations. The reason it can be ambiguous is different strategies drive different transformation types. My goal in writing this blog is to introduce three common types of transformation and their goals and challenges. I’ll also share some insights on how to prioritise transformations around customer value and experience. Who am I? I'm a digital architect, product manager, and startup founder who has seen over 2.5 billion spent on transformation of enterprise and government. These days, I'm quite passionate about building and improving the 'digital factory' that creates, manages and operates 'digital offerings': the subject of another blog . I've seen transformations of the back office, customer experience, and big data and cloud enabled transformations. Hands on, I focus on three things: 1) improving customer and citizen digital experiences across all digital channels, 2) improving and digitising business processes and 3) integration of business processes across many applications and web/mobile channels. Why do we transform? Organisations are value creating machines which take inputs, use resources and processes to add value, and then provide that value added 'offering' to customers or citizens. This machinery becomes outdated or expensive to operate. This causes the customer/citizen experience to erode and competitive strength to diminish. Worse, regulated organisations can face sudden compliance events which trigger immediate payment of transformation debt (E.g. The Financial Services Royal Commission). Whether it's to lead the market or to catch up, transformation is what executes the strategy to change. What do we transform? The common types of transformations are.
What about process resources? Process resources fuel and drive business processes – they include people, machinery and technology. Changing or restructuring existing resources, without adding new resources to automate old tasks, or not re-organising tasks isn't really transforming anything. Increasing or decreasing the resources won’t change the process, it only affects the output volume, quality, or quantity; the process is unchanged. A change in the sequence of tasks, or different resources performing or automating the task is the basis of transformation. Is data a resource? Yes. A couple of years back I helped productise/industrialise a data lake for a global mining company. One of the goals of the organisation was to become a “data driven” organisation. The data lake was central to this as it allowed all data to be made available to anyone, on demand, excluding sensitive data. This allowed employees, processes, and connected devices to “dip into the lake” to be better informed – to gain insights during and after processes execute. The lake did not change existing processes, rather it fueled them with data, making them more informed. Because processes don't change, I am not including 'data driven' as a transformation type. Is going to the cloud a transformation? Only if the process changes. The early reason to go to the cloud was the hope of reduced infrastructure costs. It was about shifting resource costs, not process improvement. Today cloud computing offers new possibilities to transform value in new ways – but the process being innovated comes first, not the technology. Earlier I mentioned three types of operational processes that can be transformed (described below). Which ones to target for transformation depends on strategy. If the strategy is to be more customer centric, then the processes that create and deliver the highest customer value should be prioritised. This requires the customer journey to be modelled to expose customer tasks, pains, gains, and prioritises them. These are then mapped to the value creating processes that enable the journey in a visible, transparent, manageable way (This requires new methods and tools, which will be the topic of another blog).
Shown below are all transformation areas I have addressed. It shows the customer experience consuming core value delivered via enabling processes, supported by back office processes. It also shows business model elements. When choosing what transform, consider the strategy. Is it cost, productivity, new value, quality, or direct customer value? If it is customer value, is ‘above the line’ innovation being created which makes the customer think “wow, I didn’t know that was possible”, or, is the value being delivered going to result in “finally, you did what everyone else offers”. I recommend balancing above the line and below the line, even if your organisation is a follower. What does each transformation type get you? I have described three main transformation types, with business processes split into three sub-types. The table below outlines these, restates the focus of each, and what they should give you. Finally, here's a a few things to consider for transformation.
Others also viewedExplore topicsWhat are the types of transformation processes give an example of each?One useful way of categorising different types of transformation is into: manufacture – the physical creation of products (for example cars) transport – the movement of materials or customers (for example a taxi service) supply – change in ownership of goods (for example in retailing)
What are the four categories of transformation process?As Figure 1.2 demonstrates, transformation processes can be categorized into four groups: manufacture (the physical creation of products, e.g. automobiles), service (the treatment of customers or storage of products, e.g. hospitals or warehouses), supply (a change in ownership of goods, e.g. retail), and transport (the ...
What are the three components of the transformation process?3 The transformation model
This is shown in Figure 1, which represents the three components of operations: inputs, transformation processes and outputs.
What are transformation processes in business?Business process transformation is a long-term change management process that is driven by the external pressure to adapt to new conditions and requirements and meet business goals. It involves radical changes to business processes and must be aligned with company strategy.
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